Early monsoon showers cheer FMCG firms but dampen summer goods 

Packed staples major AWL Agri Business Ltd sees enhanced demand for essential food items like edible oil in rural areas amid better income expectations. "We have strategically enhanced our direct distribution reach, which has gone up by 19%, recognising that for essential commodities, availability in retail outlets is the most crucial aspect. As a precautionary measure we have increased our packed oil and staples inventory at critical locations at Bihar, UP, J&K, North East," said Managing Director and Chief Executive Officer Angshu Mallick.

Godrej Consumer Products Ltd, which is strategically positioning itself to capture a larger share of the mosquito repellent incense sticks market, is also expecting a boost in sales.  The sale of anti-mosquito incense sticks experiences heightened demand during the monsoon, especially in rural India.

“As the FMCG industry navigates evolving market conditions, the early arrival of the monsoon and expectation of a good monsoon season brings renewed optimism. A healthy rainfall season is expected to enhance agricultural output and boost rural demand, which plays a crucial role in driving growth for various FMCG categories," said Krishna Khatwani, Head of Sales (India),GCPL.

Meanwhile, FMCG major Dabur has also expressed an optimistic outlook on the arrival of an early monsoon. "Good monsoons have a positive impact on consumer sentiments, particularly in rural India. If the spread is even and helps improve yield, it will certainly boost farmer income and thereby consumption," said a company spokesperson.

" We are confident about the potential of rural India and have been aggressively working towards expanding our rural footprint," the spokesperson added.

However, sales of summer products such as beverages and room air conditioners, have taken a hit.

"Unseasonal rains and cooler weather in April–May temporarily dampened demand for summer categories like beverages and ice creams, leading to short-term inventory buildup," said Mayank Shah, Vice President, Parle Products. He further added, " we expect a quick rebound as offtake improves. In the long run, a stable monsoon supports food inflation control and sustained consumption.”

Distributors also bore the brunt of unsold inventory.

"The sale of beverages stopped as soon as the heavy rains started. We did not anticipate the dip since there were expectations of a longer summer, now most distributors have excess inventory of cold drinks and other juices," said Dhairyashil Patil, president of All India Consumer Products Distributors Federation (AICPDF).

Similarly, Boroplus-maker Emami, flagged pressure in its talcum powder sales as unseasonal rains in the south, east and western regions  led to a drop in demand during what is typically peak season for the category. "From an outlook perspective all I can say is that talc is the one where we are right now keeping our fingers crossed," said Manish Gupta, president (sales).

For the cooling products industry, summer arrived 15 days early in February—but also ended 15 days early—dashing the hopes of air-conditioner (AC) makers who had stocked up expecting a repeat of last year’s strong sales.

“This year the summer season kicked in early, and we witnessed a spike in AC sales volumes in February, March and April. However, this momentum was dampened later due to early showers. For the industry, the South, East and West have together reported a 20-25 percent drop in sales, which could be an impact of the first 15 days of May due to intermittent rains.

There is no substantial variation in impact by any specific channel, as this drop is seen across channels. Our AC installation data is indicating that demand is improving and already we are at 15-20 percent growth in May over last year. We are keeping a close eye on the weather and the demand in the market, to decide the further course of action," said  Kamal Nandi, Business Head & EVP at Appliances Business of Godrej Enterprises Group.

Last year, surging temperatures caught room AC and water cooler makers off guard, leading to a severe supply crunch and an estimated shortfall of 4-5 million AC units. This year, however, manufacturers are warning of an inventory glut across most brands, leaving little room for price hikes or margin expansion.

Manufacturers such as Voltas, Blue Star, and Havells are now recalibrating expectations for the first quarter, dialling down growth expectations amid erratic weather patterns observed in March and April.