Heatwave spurs surge in AC, beverage, ice cream output in India

New Delhi|Kolkata: Makers of soft drinks, air-conditioners, refrigerators and ice cream are moving to raise production on expectations that demand will accelerate in the coming weeks in line with soaring temperatures. This follows the companies reaping a 50% sales surge in the past 10 days as several parts of India reeled under an unusually scorching summer in the second half of April, sharply offsetting sluggish demand in the early part of the month due to unseasonal rains.

The rebound comes despite companies effecting 8-15% product price hikes and battling component supply disruptions tied to the West Asian conflict.

AC and refrigerator sales are up about 40% year-on-year, prompting companies to lift April sales projections by 10-15%, from earlier expectations of flat growth.


AC makers said they are facing product shortages after halting manufacturing previously due to tepid demand, while beverage and ice cream companies are tapping capacity added last year. Sales of cooling appliances such as ACs, air coolers, and refrigerators climbed 40% year-on-year in the past fortnight.

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“We are seeing very brisk sales in April across the country; the momentum has reversed last year’s decline which was because of unexpected and continuous rains,” said Ravi Jaipuria, chairman, Varun Beverages, PepsiCo’s second largest bottling partner outside the US. “Summer sales expectations remain robust, riding on higher capex which we had invested in last year and relentless execution.”

The bottling partners of Coca-Cola and PepsiCo had announced fresh investments last year on capacity expansion, distribution, and cold chain infrastructure. However, capacities remained underutilised by the Rs 60,000 crore packaged beverages industry due to unseasonal rains during the peak months of March to September.

Coca-Cola alone had announced combined investments of Rs 25,760 crore last year by four of its largest bottling partners, including Hindustan Coca-Cola Beverages (HCCB), which it owns, and external partners Moon Beverages, SLMG Beverages and the Kandhari Group of companies.

“As temperatures rise across the country, we are seeing strong summer-linked demand, particularly in immediate consumption and on-the-go occasions,” said Nitin Bhandari, VP and GM, beverages, PepsiCo India and South Asia, adding that the company is approaching the season with affordability, relevance and execution at scale.

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Ice cream makers—from legacy brands Amul and Mother Dairy to newer entrants such as Milky Mist and Havmor—have stepped up scale, particularly on high-visibility channels such as quick commerce.

Mother Dairy, which makes and sells ice cream in addition to dairy and non-dairy beverages, withstood a late start in the crucial June quarter amid early rains, but is now seeing robust demand.

“With rising temperatures across the country, we anticipate more than 30% growth across key categories, and we are particularly introducing variants for quick-commerce which is showing the highest growth across retail,” said Jayateertha Chary, managing director. “The quarter is looking good for us, though initially, there was one-two weeks of rain. Now the season has recovered, and we are seeing brisk growth.”

AC maker Blue Star MD B Thiagarajan said industry volumes have grown 30-50% at several locations since April 15. “All indications suggest the summer will remain intense even in May, and production is running at full swing,” he said.

Several companies had temporarily curtailed production in March and early April due to a weak start to the season, inventory carried over from last year and the LPG crisis, which disrupted manufacturing for a few days. LPG is crucial in AC and refrigerator production as it is used in brazing work.

Godrej Enterprises Group appliances business head Kamal Nandi said refrigerator sales rose nearly 15% in April from the year earlier after declining around 5% in the first half of the month.

“The South was growing from the beginning, but the North and West witnessed a delayed recovery,” he said. “On a pan-India basis, we now expect April sales to close with 10-15% y-o-y growth.”

Retailers said the surge in demand has sparked product shortages, particularly of 5-star-rated 1.5-tonne ACs. Vijay Sales director Nilesh Gupta said sales of all cooling appliances have risen sharply, while supplies are improving gradually for the higher star rated models.