September 22, 2024, 12:00 am


Siyam Hoque

Published:
2020-04-26 17:46:40 BdST

No thirst for soft drinks even amidst hot spell.


NEWS DESK

The soft drinks industry has been pounded by the outbreak of coronavirus in Bangladesh at a time when it typically enjoys mounting sales for the rise in mercury.

In April, which is typically marked as the beginning of summer, beverage sales are poised to drop more than 80 per cent, thanks to the countrywide shutdown in a bid to contain the spread of the highly infectious virus.

The shutdown on March 26 prompted the closure of shops, hotels, restaurants, movie theatres, convention and party centres, which are the topmost point of sales for beverages.

"Our sales have come to a near halt," said Md Nahid Yousuf, an assistant general manager for brand at Partex Beverage, the franchisee of Royal Crown Cola (RC Cola).

Sales of RC Cola, which has five variants, is set to come down to less than 20 per cent in April. The previous month, it managed to sell about 30 per cent of the products.

"We paid the salary for March and would do for April too. After that, if this trend continues, it would be hard to pay every staff," he said, adding that Partex Beverage directly employs about 2,500 people.

PepsiCo's popular brands such as Pepsi, 7UP, Mirinda, Slice, Mountain Dew, Pepsi Diet and 7UP Light have also taken a beating, with its sales crashing to less than 20 per cent.

"Usually, the months of March, April and May see a spike in sales. Now, the whole economy is down and the country's carbonated soft drink (CSD) market plunged," said a senior official of Transcom Beverage, the exclusive PepsiCo franchisee for Bangladesh.

However, its drinking water brand Aquafina's sales have suffered less than the others, he said requesting not to be named as he is not authorised to speak with the media. According to the insiders, the industry has tremendous potential in Bangladesh as it grows along with the economy.

The annual per capita consumption of soft drinks in Germany is 450 bottles, 550 in the US and 600 in Mexico.

But in Bangladesh, it is only 17 as of 2018, said a top official of Transcom Beverage.

Bangladesh also lags behind its peers in Asia: in India, it is 25 bottles, Vietnam 45 and Sri Lanka 40.

Transcom Beverage has not laid off any of its staff and even provided advance salary to some of its employees who work in the field so that they do not face any problem in running their family expenses, the senior official added.

Pran, which has a wide range of beverage lines, also saw dwindling sales from March.

"We have a range of products and many of them are manufactured targeting the village population. But now rural distribution is getting harder due to the shutdown," said Nurul Afsar, head of corporate brand at Pran RFL Group.

The company's beverages sale would nosedive in April.

Sales of beverages surge during Eid festivities.

"But this year will be a different one. I see a bleak future," Afsar said.

The global pandemic is also affecting the company's beverage export to India, the Middle East, Nepal and other countries.

He projects that beverage exports would fall nearly 40 per cent year-on-year in April.

"Due to coronavirus, we are receiving less export order. Now, in some cases, we cannot deliver our product to the buyers for congestion in the port and delays in shipment."

Afser also partly blamed the low sales to the widespread fake news that consumption of cold drinks could make consumers more susceptible to COVID-19.

The World Health Organisation (WHO) has not issued any warning on cold drinks.

The United Nations' public health agency even said there is no scientific evidence that eating hygienically made frozen food and ice cream spread the new coronavirus. 

The WHO, however, said alcohol may put people at increased risk of coronavirus, weakening the body's immune system and leaving drinkers at risk for other risky behaviours that could increase the likelihood of contracting coronavirus.

Global drinking brand Coke's sale also fell drastically.

"We are facing the same problem like other beverage companies," said an official of Coca-Cola Bangladesh requesting anonymity.

He attributed it to weakening purchasing ability of people as many are now out of jobs.

"People are now buying essentials, so sales of other products are falling," said Rafique Masud, sales manager for Meghna Group of Industry's fast-moving consumer goods division.

Meghna Beverage manufactures Super Fresh Drinking Water, Fresh Dhoom Cola, Fresh Mejanda, Fresh Soul Up, Gear Energy Drink etc.

Its CSD sales have plunged to less than 20 per cent due to the virus outbreak.

Akij Food and Beverage, which manufactures Mojo, Frutika, Speed, Clemon and drinking water Spa, echoed the same as other, said an official wishing anonymity.

However, in supermarkets, which open for a few hours every day amid the crisis, sales of soft drinks have remained stable.

"Sales of CSD have not dropped. In some cases, it increased," said Mohammad Aurangzeb, manager for procurement and operation at Khulshi Mart.

Drinking water sales too nearly doubled in the last few weeks.

Unauthorized use or reproduction of The Finance Today content for commercial purposes is strictly prohibited.


Popular Article from Business