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'Up' For a Drink This Summer? Last year demand was disrupted due to prepone monsoons, this year's forecast is of a blazing summer. FMCG companies such as Dabur, Parle Agro, Cavin Kare, Godrej Jersey, Hamdard Laboratories gear up to meet demands and hope to maintain their pricing amidst a wait-and-watch approach

By Shrabona Ghosh

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One man's loss is another's gain. Case in point: Sizzling summer has set in; as people look for respite from heat waves, beverage makers gear up to meet summer drink demands.

On April 1, the Indian Meteorological Department (IMD) issued an advisory on the rising temperatures and heat waves taking over major parts of the country. Furthermore, with elections underway, people are spending more time outdoors which would spurt in out-of-home consumption. Last year demand was disrupted due to prepone monsoons, this year's forecast is of a blazing summer. "A stronger and longer season would be good for our summer-centric products, particularly the beverages and glucose portfolio. We have started building inventory for the same, both at the retail and stockist end," said Anshul Gupta, head of sales, Dabur India Limited.

Beverages are classified into thirst-quenching and indulgent, thirst-quenching options typically include buttermilk and fruit-based drinks. Historically, there has been a significant increase in demand for buttermilk and lassi, more than two fold during summer. This year, the industry is also witnessing stability in milk supply and procurement prices over the past one year. The dairy industry remains optimistic about a surge in demand especially in product categories like ice cream and other dairy beverages like flavored milk.

Conversely, indulgent beverages have seen a growth rate of 48 to 50 per cent. "Last year, we experienced unprecedented rainfall during the summer months, affecting sales. However, this year, with the expectation of El Niño conditions, we anticipate a much stronger performance. Consequently, we anticipate a considerable spike in demand, surpassing last year's figures," said KG Mallikeswaran, business head- beverages, CavinKare. El Niño is a phase of an abnormal heating up of surface ocean waters in the East and the central equatorial Pacific region. It affects changes in wind patterns that impact weather across many parts of the world.

Younger audiences prefer convenience based formats and there is a rising demand for local preferences/ product offerings to meet the diverse tastes of consumers. "We expect a surging demand for our beverage products, including the quintessential Roohafza, and our ready to drink formats such as Roohafza Milkshake, Roohafza Lassi, Roohafza Fusion and Nariyal Paani," said a spokesperson from Hamdard Laboratories.

Will there be an extra pocket pinch?

The pricing of beverages is intricately linked to commodities such as milk and fruits, especially for fruit-based and milk-based drinks. Purchasing decisions for these commodities are typically made in advance, with bulk procurement taking place in June or July, thereby influencing prices for the subsequent year. "This year's market conditions already show signs of price stabilization, particularly compared to the previous year when milk prices surged. With current trends in quantity pricing, we anticipate a gradual softening of prices. Consequently, significant price hikes are unlikely. Instead, we may observe adjustments such as the introduction of more appealing pricing packages, reductions in MRPs (Maximum Retail Prices), or increased product fill volumes," said business head- beverages, CavinKare.

Sharing a similar opinion, Bhupendra Suri, CEO, Godrej Jersey, said, "Since last April, the fluctuation in milk supply and demand have eased off, albeit still influenced somewhat by seasonal variations. With inflation rates also slowing down, there is a stability in the milk procurement prices."

However, the makers of Frooti, predict differently – Inflation is expected to persist due to the current macroeconomic environment – This will naturally impact certain segments more than the others. "Brands will maintain their pricing and adopt a wait-and-watch approach to see how the situation pans out, considering that most brands have already raised prices over the past eighteen months. Established brands are likely to capture a larger pie of the share," said Ankit Kapoor, head of marketing and international business, Parle Agro.

With an average F&B inflation rate of 7-8 per cent, the price of raw materials tends to increase, "This may impact certain price points, our attempt however, is to keep our products affordable for the masses," said Hamdard Laboratories.

Meeting the demand-supply gap

Companies have proactively anticipated the shifts and have adopted a dual approach to readiness. "Firstly, we focus on maximizing our operational efficiency during the peak season through meticulous pre-season planning. This ensures that our machinery operates at full capacity, ready to meet the heightened demand. Secondly, we work closely with our strategic partners to fortify our supply chain against unforeseen surges in demand. By providing them with early notifications and leveraging third-party units in our service vicinity, we enhance our ability to cope with unexpected market fluctuations," explained Mallikeswaran of CavinKare.

With an eye on the summer season, Dabur has expanded capacity at its beverage plant at Pantnagar. In addition, a new unit has been set up in Indore for beverages and in Jammu for aerated fruit beverages to gear up for the summer demand.

To address potential demand-supply gaps caused by excessive heat waves, Godrej Jersey is focusing on enhancing production capabilities and optimizing supply chain efficiencies. "Improved logistics, strategic partnerships with suppliers and distributors are part of the proactive measures to mitigate any gaps and ensure consistent availability of dairy products during peak demand periods," the CEO said.

Parle Agro too is prepared to take up unexpected spikes, "Our planning has been rigorous for the coming season and we are prepared for unexpected demands," said Kapoor of Parle Agro.

Hamdard Laboratories India's new plant in Aurangabad with a new aseptic carton line is now functional to cater to the rising demand of RoohAfza and RTDs such as Milkshake, Lassi, and juices in aseptic format. This plant in Aurangabad also helps in serving the additional demand coming from west and emerging south markets; besides, the company already has an USFDA approved facility in Manesar.

According to Statista research, revenue in the Indian beverages market is projected to reach US$1,142 million in 2024. Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 13.90 per cent, resulting in a projected market volume of US$2,189 million by 2029. Number of users is expected to amount to 123.5 million users by 2029 and user penetration will be 5.5 per cent up in 2024 and is expected to hit 8.4 per cent by 2029.

Shrabona Ghosh


A journalist with a cosmopolitan mindset. I lead a project called 'Corporate Innovations' wherein I cover corporates across verticals and try to tell stories on innovations. Apart from this, I write industry pieces on FMCGs, auto, aviation, 5G and defense. 

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