Synopsis: FMCG and beverage companies are preparing for summer with cautious inventory, timely product launches, and volume-focused strategies, aiming to capture seasonal demand and achieve double-digit growth if weather and execution align.
As summer approaches, consumer-focused companies in the FMCG and beverage sectors are gearing up for peak season demand. Firms with strong distribution networks, popular brands, and seasonal offerings are expected to benefit from rising consumption, creating potential for robust revenue growth and margin expansion. Investors are closely watching whether companies like Dabur, Emami, and Varun Beverages can translate this seasonal demand into double-digit sales growth.
What Went Wrong Last Year?
Last year, FMCG companies faced a major setback during the summer season. Unseasonal rains and extended winters in several parts of India led to lower-than-expected demand for summer-focused products such as cold drinks, talcum powder, cooling oils, and ice creams. Companies like Dabur, Emami, and Varun Beverages had pre-loaded inventory in anticipation of a normal hot summer.
However, the cooler weather caused slower sales, leaving dealers and warehouses with excess stock. Key summer categories reported weaker growth or even negative volume change, impacting overall revenue. Additionally, urban markets experienced a broader slowdown in FMCG demand, compounding the challenge.
Strategy This Year
Learning from last year’s experience, FMCG firms are now adopting a cautious approach. Instead of pushing large quantities of stock into the market early, they are keeping inventory levels low at dealers and warehouses. Products will be released gradually as temperatures rise, reducing the risk of unsold stock. This strategy allows companies to start the new season fresh, avoiding the mismatch between supply and demand that hurt them last year.
Dabur India Limited
Dabur India Limited is a global FMCG company offering a wide range of health, personal care, foods, and home care products. Its portfolio includes health supplements (Dabur Chyawanprash, Honey), digestive aids (Hajmola), cough remedies (Honitus), baby care, hair care (Dabur Amla, Vatika), oral care (Dabur Red, Meswak), skin care (Gulabari, Fem & OxyLife), home care (Odonil, Odomos, Sanifresh), beverages (Réal), foods (Dabur, Hommade), spices (Badshah), and edible oils & ghee. It also operates beauty retail stores under the NewU brand. Founded in 1884, it is headquartered in Ghaziabad, India.
With a market capitalization of Rs. 90,892 crore, the shares of Dabur India Limited were trading at Rs. 512, down 0.8 percent from its previous day’s closing price of Rs. 516.75 per equity share.
Dabur, known for cooling hair oils under Dabur Cool King and fruit juices under Real, is focused on liquidating leftover stock from last year. The company expects a surge in sales if summer weather is favourable. Dabur’s management is optimistic that the category tailwind will help drive double-digit growth in summer-focused segments, provided the seasonal conditions support demand.
Emami Limited
Emami Limited is an India-based personal and healthcare products company with a diverse portfolio across skincare, haircare, health, and grooming segments. Key brands include BoroPlus (antiseptic and skincare), Navratna (oils and talcs), Zandu (ayurvedic health products), Kesh King (haircare), Smart And Handsome (men’s grooming), Dermicool, Creme 21, HE, The Man Company, Brillare, and Emami Diamond Shine. Founded in 1974, the company is headquartered in Kolkata and operates both domestically and internationally.
With a market capitalization of Rs. 21,388.50 crore, the shares of Emami Limited were trading at Rs. 488, down 0.38 percent from its previous day’s closing price of Rs. 490.30 per equity share.
Varun Beverages Limited
Varun Beverages Limited, founded in 1995 and headquartered in Gurugram, is a beverage manufacturer, bottler, and distributor operating in India and multiple international markets. It offers a wide portfolio under PepsiCo brands, including carbonated drinks (Pepsi, Mountain Dew, 7UP), juices and fruit drinks (Tropicana, Nimbooz), energy drinks (Sting, Rockstar, Reboost), sports drinks (Gatorade), ice-tea (Lipton), packaged water (Aquafina, Aquavess), snacks (FritoLay, Cheetos, Doritos, Kurkure), and dairy-based beverages (Cream Bell).
With a market capitalization of Rs. 1,54,730.82 crore, the shares of Varun Beverages Limited were trading at Rs. 460, up by 0.42 percent from its previous day’s closing price of Rs. 458.05 per equity share.
Varun Beverages is leveraging new product launches to drive growth. The company plans to expand its energy drink range, including the mid-priced Adrenaline Rush, and introduce new flavours in the Nimbooz Jeera line. Stronger customer engagement plans and distribution strategies are expected to maximize sales during the peak summer season.
Focus on Volume Over Pricing
Across all three companies, the strategy this summer is volume-driven growth rather than price hikes. By strengthening distribution, improving execution, and launching products at the right time, firms aim to capture market demand efficiently. The success of this approach largely depends on weather conditions and sustained consumer demand.
Outlook for the Summer Season
If summer temperatures remain strong and consistent, Dabur, Emami, and Varun Beverages are well-positioned to achieve double-digit growth in their summer categories. However, weather unpredictability continues to pose a risk, and execution will play a critical role in turning strategy into actual sales.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
