Rains steal summer thunder in cities; FMCG majors chase countryside growth

A contrasting trend is emerging in the fast-moving consumer goods (FMCG) sector. While the early arrival of the monsoon is expected to boost consumption in rural areas, sales in the summer category—particularly cold beverages, soft drinks, and ice creams—are likely to suffer, especially in urban centres.

Rural demand has already been outpacing urban markets for the past five quarters, and the onset of monsoons is likely to further support this trend. However, companies that rely heavily on their summer product portfolio may be impacted, as the season’s key items tend to sell more in cities where they are often consumed on impulse.

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Sales of soft drinks and ice creams usually depend on quick and frequent purchases in cities. The rise of quick commerce platforms has made it easier for companies to cater to urban consumers by delivering products within minutes. But the unseasonal rains earlier this month, followed by early monsoon showers, have already reduced summer sales in cities.

Mayank Shah, vice-president at Parle Products, told TOI summer sales in urban regions had already dipped due to unexpected rainfall in some areas, and the early showers would only worsen the situation.

The drop in sales has been particularly visible at kirana stores across parts of India. Dhairyashil Patil, president of the All India Consumer Products Distributors' Federation, said, “Few days' sales have been lost,” adding that although there has been an immediate impact, the onset of early summer should support total sales across the full season.

Manish Anandani, managing director at Kenvue India, said, “While the outlook for rural consumption is optimistic, buoyed by strong monsoons and improved agricultural output, urban recovery, which has seen marginal improvement, will see an impact, especially on summer categories, owing to early rains. Amid these consumption trends, companies with a rural focus are expected to benefit from the early and good monsoon. However, companies focused on urban markets will see limited offtake immediately.” He expects urban demand to recover only after the September quarter.

Some ice cream companies are already adjusting their sales forecasts. Mohit Khattar, CEO of Graviss Foods, which runs the Baskin Robbins brand in India, said, “Early rains, storms, and cooler days have made it (month of May) more like the monsoon season rather than peak summer. Consequently, ice creams seem to have dropped from the wish list of consumers a couple of notches for now. This is likely to impact our as well as the industry's robust growth projections to more modest numbers.”

The monsoon reached Kerala on 24 May, eight days earlier than the usual onset date of 1 June, making it the earliest monsoon arrival since 2009. Rainfall has already spread to other regions, which could aid agricultural production.

Mohit Malhotra, CEO at Dabur India, said better crop yields would boost farmer incomes and lead to higher consumption. “We will continue to drive growth in rural through increased penetration in the hinterland while urban demand growth would ride on our premiumisation initiatives in e-commerce and modern trade channels,” he said.

Shuvadip Banerjee, chief digital marketing officer at ITC, said early monsoons, combined with government policy reforms and a good harvest, could increase rural consumption. The company is using mobile vans to reach even the most remote villages.

(With TOI inputs)