As summer begins to heat up, there’s a noticeable surge in the demand for beverages, ice creams, and other products sensitive to temperature. However, businesses are approaching this lively season with a cautious mindset, grappling with potential challenges from erratic weather and fuel-related disruptions that may affect supply chains and profit margins.
“With an early onset and a steady rise in temperatures, this year’s summer season looks promising for the industry as a whole,” said Jayatheertha Chary, deputy managing director, Mother Dairy.
From refreshing drinks to delectable frozen treats, recent weeks have seen a sharp increase in consumption trends. Nevertheless, industry executives highlight that the true challenge this year will be managing the rise in demand alongside escalating logistics costs and the threat of disruption on the supply side.
Early summer boosts demand across categories
Beverage companies and ice cream manufacturers are experiencing a robust kick-off to the season, with higher temperatures arriving earlier than usual.
“The arrival of summer this year is accelerating demand and creating a larger opportunity for beverages,” said Sundeep Bajoria, vice president at Coca-Cola India & Southwest Asia. He noted that the company, along with its bottling partners, is focusing on enhancing visi-cooler networks to widen the availability of chilled beverages across retail and on-the-go channels.
Paritosh Ladhani, managing director at SLMG Beverages, a Coca-Cola bottling partner, supported this observation. “The early arrival of summer has provided a significant tailwind to the beverage industry, and we are observing a healthy acceleration in consumer demand across our portfolio,” he mentioned, citing recent investments in enhancing manufacturing capacity, including a new bottling facility in Buxar, Bihar.
In the realms of ice creams and indulgent categories, increased sales are already evident.
Mother Dairy is anticipating over 30% growth across key segments such as ice creams, yogurt, and dairy beverages, with Chary stating they are “fully geared to meet this surge with enhanced capacities, a robust cold chain, and early asset mobilization.”
Additionally, he highlighted that innovation and product localization will play crucial roles in their summer strategies across both ice cream and fresh dairy portfolios.
Ashish Tendulkar, chief operating officer at Call Me Chunky, reported an 11% increase in overall demand in early March, with certain products soaring by over 21%, particularly on quick commerce platforms such as Instamart, Zepto, and Blinkit.
A notable trend has also emerged with late-night consumption. Approximately 17% of daily orders take place between 12 AM and 1:30 AM, driven primarily by Gen Z consumers and impulsive purchasing behavior. During peak summer, the company expects a 14% rise in order volumes, with bulk purchases for social gatherings seeing an additional 19% growth.
At Dairy Day Ice Creams, shifts in consumption patterns are influencing demand. “We are observing a strong and early uptick in demand for ice cream this summer, reflecting a broader transition of ice cream from a seasonal indulgence to an everyday treat,” said Arvind Ramachandran, vice president of Marketing. The company has expanded its freezer inventory by around 30% and scaled up its quick commerce options, which now account for 6–7% of its business as it concludes FY26.
Weather volatility, fuel risks cloud outlook
Despite strengthening demand, businesses are cautious of external risks, particularly concerning fuel availability and unpredictable weather conditions.
Swarup Bose, founder and CEO of Celcius Logistics, stated, “The primary concern regarding the West Asia conflict is the potential for fuel shortages. Most transportation in India, whether cold chain or dry logistics, relies on road transport.” Celcius Logistics is a tech-driven, asset-light cold chain logistics company.
He mentioned that early signs of disruption are noticeable. “We are starting to see fuel shortages in certain states. As of now, the situation remains manageable, but should it escalate, we could see impacts on business performance.”
Inflationary factors linked to rising fuel and input costs are also squeezing margins. Saurabh Kasat, CFO and director at Dairy Day Ice Creams, observed that price hikes related to polymers and natural gas have raised operational costs. “To counter these rising expenses, we will implement measured price increases on certain SKUs while ensuring continued value for our consumers,” he remarked.
Businesses face limited flexibility under these conditions. “Companies manage perishable goods which cannot be stored indefinitely while waiting for costs to decrease,” Bose explained. “Hence, firms will adopt a balanced approach; absorbing some increased costs while passing a portion on to consumers.”
Moreover, unpredictable weather adds another layer of complexity. Last year’s severe monsoon hindered supply chains for approximately two to two-and-a-half months, disrupting transport routes across a third of the country. “Many plans were derailed,” noted Bose, observing that businesses had to reduce production and prioritize inventory liquidation.
This year, companies are already laying the groundwork for contingencies. Some are contemplating a production cut of 10–20% in flood-prone regions while preparing alternative logistics paths.
Simultaneously, businesses are adjusting to evolving consumption trends. While an early monsoon may dampen peak summer demand by 10–15% in the short term, executives believe the influence is increasingly temporary. “While overall demand might not diminish, it is simply redistributed,” remarked Tendulkar.
For ice cream producers, the category continues to exhibit structural growth, maintaining a long-term Compound Annual Growth Rate (CAGR) of 14–15%. Dairy Day has, for example, reported a three-year CAGR of around 30%, significantly outperforming the broader market.
Key Takeaways
- Early summer has led to increased demand for beverages and ice creams.
- Companies face challenges related to logistics costs and supply disruptions.
- Consumer patterns show growth in late-night purchases and quick commerce channels.
- Business strategies include price adjustments in response to rising costs.
- Firms are proactively preparing for potential weather-related supply chain issues.
FAQ
What factors are driving early summer demand?
Higher temperatures arriving sooner than usual are significantly boosting the demand across various beverage and ice cream categories.
How are companies coping with rising logistics costs?
Companies are implementing price adjustments on select products and absorbing part of the increased logistics costs to maintain consumer value.
What trends are shaping consumer behavior this summer?
There is a noticeable trend of increased late-night consumption, particularly among younger consumers, contributing to higher overall sales volumes.
What preparations are companies making for potential weather disruptions?
Some companies are considering reducing production in flood-prone areas and developing alternative logistics routes to mitigate risks associated with unpredictable weather.
As summer progresses, the dynamics of demand and supply will play a critical role in shaping the industry landscape. Companies are adapting to these changes by strategizing to maximize opportunities while navigating uncertainties.
