Bullish fridge, AC, soft drink firms gear up for hectic summer

The decline in Covid cases will lead to a buoyant demand for summer products this year for the first time since the pandemic and refrigerator, AC, soft drink and ice cream manufacturers have started to expand production capacities back to pre-covid levels, companies said.

Most have increased production levels from 40-50% in January to 80-90% in February and plan to ramp up further from next month by adding more shifts or lines.

Companies had cut summer product production from December last week till last month due to the third wave after having lost two summers in 2020 and 2021 due to lockdown and second wave of the pandemic.


Godrej Appliances business head Kamal Nandi said companies are going back to peak capacity for refrigerators and air-conditioners as dealers have started to pick up stock since the end January and demand is expected to be bullish after two years.

"Most of the plants were operating at 50-60% capacity in January, but since the third wave has already peaked, production is getting back to peak capacity," he said.

RS Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation that makes Amul dairy products, said there is already 30-40% growth in sales of ice cream and beverages in the last few days compared to 2019 due to easing of restrictions.

"The year 2022 will surely be a record year for sales and production of ice cream and beverages, with our production capacity up by 20-25% over 2019," he said.

The summer sales period, which starts from Holi in March and lasts till June, accounts for more than half the annual sales for products like refrigerator, AC, carbonated soft drink and beverage, ice cream and beer. A much shorter third wave this year has made companies optimistic of 2022 summer with state governments easing restrictions in weeks.

Alcobev company Radico Khaitan chairman Lalit Khaitan said the company has a judicious capex plan which will help in expanding in-house capabilities The makers of Contessa rum and Magic Moments vodka has three distilleries in Uttar Pradesh and one in Maharashtra. Expansion plans include increasing capacity at its existing plant at UP, which will require an investment of Rs 185 crore, and a greenfield grain-based distillery in UP at an investment of Rs 555 crore.

India’s largest contract manufacturer for air-conditioners, Amber Enterprises’ chairman Jasbir Singh said the company has started to ramp up production from this month and will touch almost pre-covid peak by March by adding more lines. The industry expects over 6.5 million sales of AC this year, up from 5.2 million in last year and but below 7 million in 2019.

PepsiCo India’s largest bottler, Varun Beverages, too is expanding capacity in Bihar for beverages and in Jammu & Kashmir for packaging in expectation of a healthy demand bounce back.

Chairman Ravi Jaipuria recently said in an investor call that the third wave of covid has not had any significant impact on business and it will continue to further strengthen distribution in under-penetrated territories and enhance volumes. “We are confident of delivering a much stronger performance going forward,” he said.