Soft drinks sales boom as summer heats up

A vendor sells soft drinks by the wayside in Dhaka yesterday as the outlook for beverage business brightens during summer. Photo: STARSohel Parvez

Summertime brightens the outlook for beverage business.

Add to the list of positive factors the resumption of political activities and market expansion in suburbs and rural areas. Sales are rising with processors expecting the market to grow between 15 percent and 20 percent this year, if the economy does not suffer a big blow from the global recession in the second half of 2009.

“People drink more to have a respite from the heat wave. Our supplies were much ahead of the March target. The April scenario was the same,” said Mohammad Ilias who delivers Pepsi products on behalf of his employer Sunflower Distribution.

Besides Pepsi products, including clear drink 7up, beverages such as Coca Cola, RC and Mojo mark rises in demand as the heat wave sweeps the country.

Early last week, temperature in Dhaka hit a 14-year high, while other parts of the country also passed through the blistering heat prompting people to drink in quest of a respite.

“We are struggling to cope with the rising demand every day. Whatever we make goes directly to truck from production. There is no scope for storage,” said an official of Abdul Monem Ltd (AML), Coca Cola's bottler and franchisee in Bangladesh.

He said sales of Coca Cola products in AML's territory, excluding Dhaka and Rajshahi, increased more than 60 percent in April. For March, sales growth was more than 50 percent, the official added.

“It's a good year for the Coca Cola and beverage market as well. The industry should grow at least 20 percent this year amid no rain and high temperature,” he said.

Soft drinks marketers this time hope for a boost in sales after a recovery from losses.

Data on the actual market size of the industry varies. But the majority of operators figured it between Tk 800 crore and Tk 900 crore in 2008.

“Last year was good compared with other industrial sectors. Signs are still good and the industry is growing about 15 percent this year,” said Khurshid Irfan Chowdhury, general manager of Transcom Beverages, the franchisee of PepsiCo in Bangladesh.

But he feared: “If the domestic economy suffers from a recession fallout, soft drinks may witness a consumption-drop, so are other industrial sectors.”

“It's a luxury product, not a necessity.”

Irfan attributed the growth to market expansion in semi-urban and rural areas.

Processors' entry in making 250ml packs with relatively low prices also may also enable the market to grow, he added.

“Above all, the sweltering heat has led to higher sales,” said the Transcom Beverages official.

Md Aktaruzzaman, marketing manager of Partex Beverage, bottler of RC brand products, is upbeat on the 2009 sales.

Apart from pointing to high temperature and market expansion, he also observed that resumption of political activities in post-polls time would help boost sales.

“The more political gatherings, events and festivals, the more sales,” he said.

“I expect the market to grow by 20 percent to touch around Tk 1000 crore this year.”

sohel@thedailystar.net