India’s packaged beverage market is one of the worst-performing segments during lock-down. Closure of restaurants, open food eatery spots, and reduced in-house consumption affected the beverage industry drastically during pandemic times.
Gross sales of the beverage segment shot up to 26% due to elevated stocking at kiranas to meet anticipated demand. Though the anticipated demand didn’t flare, there was a decent gross sales development of 7% in October regarding the data of Bizom, a gross sales automation agency that transacts with 7.5 million retail shops.
Bottled mushy drinks rising 7% in August and September bouncing after a decline of 44% within peak lockdown months of April and May and a 22% fall was witnessed in the following two months i.e., June and July.
Reverse migration and minimal lockdown disruptions have led to the spike of demand for soft-drinks in semi-urban and rural markets in the second half of the September quarter as stated by Varun Beverages Limited (VBL) owned by RJ Corp’s chairman Ravi Jaipuria, PepsiCo’s largest franchisee associate.
By timely replenishing of the outlets, the demand can be improved. The demand improvement changes from month-to-month and week to week cycles. It is pushed by the provision of merchandise and credit score availability in the market. Greater frequency ordering with smaller volumes post-mid-July is another replenishment pattern.
Slow redeem of travel services especially mass carriers like trains plays a contributory role towards this segment. Festival gifting customer behavior shows the solid growth with a revival notion, stated by Mobisy technologies, which owns Bizom.
VBL, which manufactures and distributes Pepsi and Mountain Dew mushy drinks and Tropicana juices is said to have seen a sturdy growth of 60.4 % within the September quarter. By July, the company reached 90% volumes while August comparatively went flat concerning last year. In September normalcy returned with the growth of 12.9% and the momentum carried throughout till this quarter as well, as reported by B&Ok Securities famous.
Rival Coca-Cola too pronounced “meaningful improvement in the face of ongoing restrictions” within the September quarter.
The peak lockdown months coinciding with the largest quarter of April-June, which contributes greater than half of the annual gross sales of over 20,000 crores. The segment has misplaced 40% of annual gross sales regardless of the current bounce back.
