Summer sales of cold drinks were “challenging” this year as unseasonal rains crimped demand for beverages in India, said a top executive at Coca-Cola India.
“It was a challenging summer. How big was the challenge, and how well we did? Wait for a few days, you will get an update,” Sundeep Bajoria, vice president at Coca-Cola India said in an interview on Thursday.
Summer season typically translates into strong demand for cold drinks and ice creams. However, this year’s erratic rainfall in parts of north India as well as the early onset of monsoon has impacted demand for such products.
On Thursday, packaged consumer goods maker Dabur India, too, said its food and beverage business, and in particular, the summer-focused beverages portfolio, had a muted June quarter due to unseasonal rains and mild summer.
Bajoria said unpredictable weather trends are here to stay, prompting companies to adapt and navigate demand trends. “We can’t change the weather, and India has seen summer rains every few years. I don’t see that changing. From a beverage sector point of view, what we do is how we operate, how we connect (with consumers)—that is where we have to make sure that we are better connected with our consumers, that we get into more homes here, into more outlets, and that we are executing better,” he said.
Coca-Cola has also been making progress in rural India, expanding its distribution to reach more households, Bajoria said. “I think our penetration (in rural) is still low. This pressure is more of an opportunity than a challenge that we are not yet in enough stores,” he said.
Retail intelligence platform Bizom said in June that unseasonal rains dampened demand for several packaged goods categories in north India, especially beverages, in May. Bizom monitors FMCG sales across urban and rural retail outlets. Beverages saw the steepest drop in this period, falling 29.4% from a year earlier as intermittent rains in north India hit demand, it said.
However, Bajoria said summers will continue to be a “big driver” of consumption in markets like India. This is especially true as on-the-go consumers buy small packs of cold drinks to quench their thirst in hot and humid weather. “The point is how we start to be more relevant with building occasions, getting into more homes outside of summers, and that is the work we still have to do,” he said.
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