Beverages, AC makers to face challenges with second Covid-19 wave
With the second wave of the pandemic hitting the country, summer-centric product makers like beverage and air-conditioner makers may be in for another challenging season. Industry observers are concerned about the subdued out-of-home sales for the beverage industry. AC makers are also likely to witness impact on demand due to restrictions in some states.
For impulse product categories such as beverages, March to June contributes over 50 per cent of the annual volumes and a significant chunk of this comes from the out-of-home channel which includes restaurants and hotels. However, beverage players said that the scorching temperatures and strong in-home consumption are expected to continue to be the growth drivers for the industry.
Mohit Malhotra, CEO, Dabur India Ltd said: “Consumption of packaged juices and beverages has bounced back in the recent quarters in line with the growing consumer need for health. While the HORECA (Hotels, Restaurants, events and catering) channel continues to be impacted, the early onset of summers is helping drive growth for the beverage industry.”
Nadia Chauhan, Joint Managing Director & CMO, Parle Agro said, “We are aware that out-of-home consumption is likely to take a hit once again during this period, however, we hope that, like last year, we will witness a surge in various SKUs more for in-home consumption. Across the country, owing to favorable weather conditions, we are currently witnessing a consumption boom.”
“On a positive note, the implemented restrictions are only in Maharashtra at the moment. With time, we will be able to better analyse the situation. Fortunately, unlike last year, things are more in control and everyone is able to work around business requirements. Our distribution too is being effectively managed,” she added.
Players said that in states such as Maharashtra where restrictions have been imposed, essential stores are functioning normally.
“Demand across PepsiCo’s beverages portfolio has been robust in the last few months as we ensured continuous availability of our products, relevant consumer engagement programs and affordable price points to suit different occasions and consumer needs.. With the onset of early summer, we are confident that this momentum will continue. While the environment continues to be challenging due to increasing Covid cases recently, we feel affordability and convenience will continue to drive consumption both, in-home and out of home,” a spokesperson for PepsiCo India said.
For the AC makers, the national lockdown in the first half of 2020, had led to a complete washout of a summer season. Now, Maharashtra has imposed restrictions on non-essential stores till April 30, and other states such as Delhi, Madhya Pradesh and Chhattisgarh have imposed localised weekend lockdowns or night curfews.
Eric Braganza, President, Haier India said, “There will be some impact on demand if in Maharashtra non-essential stores continue to remain shut for the entire month as it is a fairly big market for the AC industry. We will have to wait and watch how things progress in other states but remain hopeful of strong sales during this summer season.”