How Coca Cola, Hershey, Mother Dairy, others are coping as cold drinks, ice creams fly off the shelves

After an almost complete washout for two years during the pandemic, consumer companies are witnessing high demand for cold beverages and ice creams. An early onset of summer, coupled with heat waves sweeping almost the entire country, is adding to this growth in consumption. The segment was hit badly during the last two years amid local curfews, shut-downs of marketplaces and malls, and the misconceptions about cold foods and beverages possibly increasing chances of Covid-19 infection.

“This summer season, so far, has been phenomenal for us at Mother Dairy. Both our milk-based ice creams and dairy-based beverages have clocked a growth of over 50 per cent, vs the pre-Covid period, on account of early summers and subsequent rise in temperatures, enhanced number of distribution assets coupled with the opening up of restaurants, offices, educational institutions, etc.,” said Sanjay Sharma, Business Head – Dairy Products, Mother Dairy Fruit & Vegetable Pvt Ltd.

In the category, the surge in demand is skewed towards the impulse portfolio as out-of-home consumption is gearing speed. “Allana Consumer Products is expecting an upsurge in ice-cream consumption as HORECA (Hotels, Restaurants and Caterers) channel has opened. With the decline in Covid cases and restrictions on travel and social gatherings being lifted, out-of-home consumption is gaining momentum and hence we are looking to push our Institutional Packs to HoReCa channel. With the prediction of high mercury levels this summer, we are preparing for a sharp, double-digit growth this year,” said Milind Pingle, CEO, Allana Consumer Products Private Limited, that sells London Dairy ice-cream.

Preparations for demand surge

The FMCG companies are gearing up their manufacturing units, distribution channel, etc. in order for them to meet the growing demand. “The recovery for beverages post lockdowns has been steadfast. Our endeavour is to continue scaling the distribution of our offerings through all traditional channels, as well as the newer emerging channels. We have been leading expansion of retail capabilities and have placed more than 1 million active coolers in the markets and shall continue to expand our reach,” said Sundeep Bajoria, Vice President, India Franchise at The Coca-Cola Company.

“Our factories are running at full capacity to support further growth and the sales team is working towards widening our distribution footprints across metros and urban markets for our products. We continue to drive demand through ATL support led by TV and engaging digital campaigns,” said Geetika Mehta, Managing Director, Hershey India.

Besides scaling their distribution channels and manufacturing units, companies are also taking advantage of the growth in demand by launching new range in the category. “This season, we are introducing 10 new variants of ice-creams and the highlight for this season is our shahi kulfi range wherein we are introducing 4 new royal Indian flavors namely Phirni, Paan, Malai and Pista. The offtake of dairy-based beverages is also being witnessed across all channels with thirst-quenching products such as chaach and lassi leading the pack,” said Sanjay Sharma.

Other players including Coca Cola, Allana, Keventers, etc., are also launching or have already launched new product ranges. One interesting take from the kind of new launches by these FMCG companies is the growing demand for healthy or low-calorie variants in ice-creams. “We are excited to launch our “no added sugar” range very soon at all our stores. We are expecting it to contribute to 10 per cent of our sales, initially,” said Srinivas Kamath, Director, Naturals Ice Cream.

Digitally up and ready

The FMCG companies in the category are also launching varied digital campaigns to accelerate an already growing sales. One thing that brands have realised from the pandemic is the importance of being present where the consumer is and an online presence and maintaining a connection through digital means, is helping these brands add to their revenue sheet ultimately. “We have accelerated our investment plans with respect to disruptive digital innovations to drive future growth. We aim to delight our consumers with the best-tasting quality products available at an arm’s reach of desire,” said Sundeep Bajoria from The Coca-Cola Company.

India is witnessing its “hottest summer ever” with large parts of the country reporting temperatures around 45 degrees Celsius and the India Meteorological Department (IMD) has already issued an “orange” alert for many states. And this augurs well for makers of drinks and ice-creams. Going forward too, brands are expecting good sales and performance in the segment. “The expectation from summer season is very high and in the past two months we have done extremely well compared to 2019 and before Covid also. Our bullish sentiments are back to the market. We of course expect a minor blip at some point due to the next wave of covid but we do hope it to be more muted,” said Aman Arora.