Heatwave drives surge in cold drink sales, AC and fridge demand stays weak

New Delhi | Kolkata: Intensifying heatwaves across India have prompted makers of soft drinks, ice-creams and dairy beverages such as cold coffees to revise their sales targets upwards, while those selling semi-discretionary products such as air-conditioners and refrigerators say the 8-10% price increases this year have resulted in demand falling short of initial projections.

Ice-cream and cold beverages maker Mother Dairy expects sales to surpass earlier estimates, based on current consumption trends, according to its MD Jayatheertha Chary. "On quick commerce platforms alone, ice-cream volumes have more than doubled over the last 10 days compared to the preceding 10-day period, while fresh dairy products have registered growth of over 30%," he said.

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This summer is crucial for soft drinks makers, who rely on the April-June quarter for nearly half of their annual sales, particularly after last year's rain-washed season, which had led to the sales of Coca-Cola and PepsiCo plunging by more than half. Both companies have stepped up distribution in the past fortnight, exceeding their previous daily targets, said an executive at a large Delhi-NCR-based distributor, who did not wish to be identified.

"The last two weeks have seen blistering temperatures. We have made all preparations to manufacture and distribute our entire range of aerated and non-aerated products, including juices and water," said Sanjeev Agrawal, group chairman of MMG Group, which owns Moon Beverages and holds franchise rights for Coca-Cola across the majority of Delhi, north and north-east markets.

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Wait-&-watch Mode

For the first time, dairy beverages are competing with carbonated drinks, said executives, with dairy-based beverages showing a strong surge in demand during the 6-9 pm refreshment window.

In contrast, sales of cooling appliances such as air-conditioners and refrigerators have remained below industry expectations despite recurrent heatwaves in many parts of the country.

“There is some sales movement in the north and west, but demand is not uniform. The increase in petrol prices has impacted consumer sentiments,” said B Thiagarajan, managing director at AC manufacturer Blue Star. “People are in wait-and-watch mode. Dealers are stocked up adequately and primary sales (from companies to trade) are weak.”

He added that owing to a subdued consumer sentiment, several brands have not been able to pass on full price increases. Prices of copper, a key competent for AC manufacturing, a weaker rupee and new energy norms have pushed costs up across the category.

According to industry estimates, AC unit sales have increased a moderate 15% year-on-year this month while refrigerator sales have seen about 10% uptick. It comes on a low base of 2025, when cooling products had seen a year-on-year decline in peak summer sales due to a milder season.

In contrast, sales of cooling appliances such as air-conditioners and refrigerators have remained below industry expectations despite recurrent heatwaves in many parts of the country.

“There is some sales movement in the north and west, but demand is not uniform. The increase in petrol prices has impacted consumer sentiments,” said B Thiagarajan, managing director at AC manufacturer Blue Star. “People are in wait-and-watch mode. Dealers are stocked up adequately and primary sales (from companies to trade) are weak.”

He added that owing to a subdued consumer sentiment, several brands have not been able to pass on full price increases. Prices of copper, a key competent for AC manufacturing, a weaker rupee and new energy norms have pushed costs up across the category.

According to industry estimates, AC unit sales have increased a moderate 15% year-on-year this month while refrigerator sales have seen about 10% uptick. It comes on a low base of 2025, when cooling products had seen a year-on-year decline in peak summer sales due to a milder season.

Kamal Nandi, head of the appliances business at Godrej Enterprises, said although temperatures have soared in the north, the demand is not robust, with stores reporting low footfall. “People are reacting to the increase in fuel prices. Discretionary spending is getting impacted,” he said.

The past week has seen heatwaves across parts of India, with the weather forecasting agencies warning that temperatures could soar to 49 degrees Celsius across north, east and central India. The India Meteorological Department said in its seasonal guidance that “severe heatwave conditions across various parts of India are very likely till June 4.”

Crisil Ratings said in a report that a hotter-than-normal summer could improve revenues of soft drink bottlers this financial year, though higher input costs and intensifying competition might squeeze margins.

“After subdued sales growth last fiscal, soft drink bottlers are poised to see revenue rebound to their long-term average growth of about 15% this fiscal, driven by hotter summers and deeper penetration into untapped domestic territories. But with rising sales, competition is also on the rise with newer entrants,” Crisil said.

It further said that incumbents are expected to ramp up marketing and distribution spends while also expanding capacity and distribution infrastructure, in a bid to protect market share. “A sharp rise in crude prices due to the West Asia conflict has driven up packaging costs, too. These will negatively impact the industry’s profitability by up to 250 basis points,” the report said.

A basis point is a hundredth of a percentage point.