Harsh summer expected to lift sales of ACs, ice creams in 2024

The souring temperatures across the country may have brought much discomfort to many, but makers of essential summer products like air conditioners (AC), refrigerators or colas are surely not among them. Rising temperature and expectation of an harsh summer this year, have in fact brought cheers to them.

After a subdued summer season, interrupted with rains in many part of the country last year, manufacturers of summer products had suffered. Key categories of consumer goods like AC, refrigerator and cola sales got severely impacted in April-June quarter as temperatures did not sustain at high levels.

This year, however, leading manufacturers of summer products are already witnessing a surge in sales as temperatures have crossed 35 degrees in most parts of the country and occurrence of rains and hailstorms is limited. Take the AC market, for instance. The Rs 3 lakh crore AC market in India suffered heavily due to a milder summer, with sales remaining flat. That, however, is expected to change this time.

According to B Thiagarajan, Managing Director of Indian air conditioning major Blue Star, AC sales have already started to grow over last year. “Last year was a difficult year for the industry due to weather conditions. This time, we expect the sales to grow by 15% year-on-year. Manufacturers have already started to line up attractive offers to lure consumers, which will further boost sales,” he tells Business Today. The AC market that stood a little over 10 million units in 2023, is expected to touch 12.5 million units in 2024. Blue Star is launching nearly 100 new and affordable AC models to join the race. 

The summer season - March to June - is the most crucial period for AC makers as nearly 45-50% of their yearly sales take place during the period. In the refrigerators space, while sales are more distributed between the summer, monsoon and festive seasons, over 35% of the yearly sales continue to take place in the summer months. Industry experts estimate a 10-15% rise in sales of refrigerators this year.

Colas and ice creams, two of the most popular summer items from the stable of fast moving consumer goods makers, suffered in 2023 as well. Industry leaders like Varun Beverages observed that a subdued summer season in 2023, impacted its top-line growth. This time, however, says Varun Jaipuria, Executive Vice Chairman, Varun Beverages Ltd., the company is better prepared with its portfolio and expects sales of colas and other cold beverages to surge handsomely.

"Ice cream sales in India, except in certain urban pockets, is highly dependent on how harsh the summer is. Most of its is out of home consumption and thus, the heat outside is a major determent for over 80% of our consumers to make the purchase decision. With the IMD predicting a harsh and less interrupted summer this time, we expect sales to grow in double digits,” says a senior executive from a leading ice cream maker.