Summer Rush: Consumer companies’ production in top gear

Kolkata | Mumbai: For the first time in 18 months, consumer goods companies are ramping up production – anticipating a pick-up in demand – particularly for ‘summer products’ due to higher-than-usual temperatures.

White goods makers are increasing production and running their cooling product line of air conditioners, refrigerators, coolers and chest freezers at 90-100% capacity compared with 60-70% in January-February.

Even fast-moving consumer goods (FMCG) and beer companies are running their assembly lines at full steam. “After a long time, we are running plants at full capacity and there is full utilisation of shifts due to the spike in volume sales since last month,” said Godrej Appliances business head Kamal Nandi.

Building Inventory
“Sales have further picked up this month with 20% year-on-year growth till now,” he said.

United Breweries, which sells Kingfisher beer, said it is investing ₹300-400 crore next fiscal (April onwards), as it prepares for the crucial summer season that contributes over 35-40% of the beer segment’s annual sales. “We are looking to expand some of the capacities. We are also working with contract brewers that offer us capacity where we are short because we did run into some constraints during summer last year, where there was more demand than we could actually supply,” United Breweries chief financial officer Radovan Sikorsky said.

The India Meteorological Department has said that the average maximum temperature at an all-India level in February has been the highest since 1901. The weather office has predicted a harsh summer this year, with heatwaves in several parts from March till May.Consumer goods manufacturers said such high temperatures have already boosted demand for summer products which will also aid in the recovery of demand that has been subdued after the Diwali of 2021 due to high inflation. Several companies such as durable makers had cut production then to match demand.

Dabur India chief operating officer Adarsh Sharma said the company is already witnessing robust demand for its beverages and glucose portfolio and has started building inventory.

PepsiCo’s bottler Varun Beverages chairman Ravi Jaipuria told analysts that production was running at full capacity to build stock much earlier than previous years.

Coca-Cola’s global chairman James Quincey had told analysts a fortnight ago that the “number of lines going into India this year is extraordinary, and the number of lines that are ordered for next year are also extraordinary”.