Unstable weather patterns upend cos’ best-laid plans

The unpredictable weather trends are making it hard for cooling appliance makers to plan their inventory, said Anuj Poddar, managing director and chief executive of Bajaj Electricals Ltd.

“For seasonal products, you do not want to be left with an inventory, especially at the end of the season, because it sits with you for a year. So, we plan for it, and then we see unseasonable rains in March. So, we slowed down our April production schedule, but then demand came back strongly in May; then suddenly, in May, we were out of stock," Poddar said.

The solution for this, Poddar said, is to plan more in real-time and use data to help better predict demand. “From a planning cycle point of view, we just have to be more real-time and dynamic. We are trying to bring in more digital transformation systems to help us be quicker in our decision-making and get access to more data that helps us make better decisions. We are one or two years from doing it effectively," he added.

Such erratic weather patterns are also rising globally due to global warming. However, countries such as India are more susceptible to adverse effects of climate change as a large part of the country’s population relies on rainfall to sustain farm production and livelihoods.

Such events also threaten the availability of daily food products such as wheat, fruits and even coffee. As a result, companies are working hard to mitigate the impact of climate change to protect raw materials used to produce processed foods and beverages consumed by billions globally.

To mitigate the impact of heavy rainfall on its business, Zomato hired a weather analyst in 2022. By leveraging improved rain forecasts, the food aggregator aims to equip its riders with vital information to navigate delivery challenges effectively.

In fiscal year 2021-22 (FY22), for instance, mango prices surged due to adverse weather conditions, and the industry faced a supply shortage, a spokesperson at beverage maker Coca-Cola India said.

Coca-Cola is among the largest procurers of mango in the packaged consumer goods industry in India for its mango-based Maaza beverage. High pulp prices and a shortage of supplies threaten the company’s plan to expand its Maaza brand.

However, the company has been working to mitigate the risks associated with failed mango crops. Since 2011, it has been running its Project Unnati with the need to improve the productivity of mangoes.

“We are taking some corrective action, expanding our Unnati programme to other areas; we launched in Odisha and a few more states. Second is that till now, we have been focusing on one particular type of mango; so, can the recipe be matched using other mangoes also? Can we add another mango variety and take indigenous varieties because there are a lot of good mangoes (varieties)? That work is ongoing," Sanket Ray, president of India and Southwest Asia for The Coca‑Cola Co., said in an earlier interview.

In 2022, it also expanded from Maaza to Maaza Aam Panna, using green mangoes and Indian spices to capitalize on its equity in the mango category, the company spokesperson added.

It isn’t just mango, the country’s popular summer fruit, that needs to be saved; the world’s largest coffee-growing regions have been under threat from climate change.

On a recent visit to India, Philipp Navratil, head of the coffee strategic business unit at Nestle SA, the world’s largest procurer of coffee, said climate change poses a “huge risk" to coffee-growing regions around the world. Nestle reckons rising temperatures will reduce the area suitable for growing coffee by up to 50% by 2050.

Last year, Nestle pledged to invest over one billion Swiss francs ($1.1 billion) in its Nescafé Plan 2030—an extensive project to help make coffee farming more sustainable and help farmers transition to regenerative agriculture.

In India, farmers working with the company opt for “a lot" of intercropping. “So apart from coffee, farmers are planting pepper, and other fruits that they can sell that adds to their income. Generally, there is very little chemical fertilizer used. It’s really a model we want to expand more in India and abroad," Navratil said.

Meanwhile, ITC Ltd, whose agribusiness is the country’s second-largest exporter of agri-products, has been working proactively with farmers in its supply chain over the years to mitigate the risks arising from climate change.

“The agronomy teams in ITC’s agri-business have worked out region-specific practices to minimize the impact of heat waves and unseasonal heavy rain," S. Sivakumar, group head, agribusiness and sustainability, ITC Ltd.

Measures include the introduction of heat-tolerant varieties, crop-cycle approach, in-situ and timely planting, broad-bed and furrow system, mulching, critical irrigation and use of heat-ameliorating sprays to reduce heat stress, Sivakumar said in response to queries.