The most lucrative quarter didn’t work well for Coca-Cola. Here’s why!

Ill-timed rain hasn’t affected Indian farmers’ life alone, it had hit the country’s biggest industries as well. Unfavorable weather conditions in this quarter, led to sales drop for them.

As per Economic Times, Coca-Cola’s volume sales growth dropped to single digits in April-June quarter, which is usually a peak season for the firm. This sudden slump in sales is perhaps because of two reasons: fizzy drink consumption slowdown in rural markets and unseasonal rains. Apart from that, a price-hike of 10-15% because of 5% hike in excise duty played negatively for the beverage maker company.

As per a statement issued by Coca-Cola’s global headquarters in Atlanta, "In India, unseasonable weather during the quarter drove an overall decline in the industry."

Not just Coca-Cola, but other firms including PepsiCo too have posted single digit volumes growth. PepsiCo, however, did not reveal the numbers pertaining to the Indian market.

For the soft-drink industry, best time for sales is from April to June. During this period, the industry gains about 40% of the annual sales which is estimated to be around 14,000 crores.

Not just sales, but the production unit has also been affected. Coca-Cola and PepsiCo had to cut-back the production with production cycles running only two-three days a week at least for a limited time.

The north Indian beverage market including Delhi-NCR, Punjab, Haryana, Uttar Pradesh and Himachal Pradesh alone contributes close to half of the complete sales in India.

CRISIL report released earlier this month said, "The fragile state of rural consumption is reflected in volume and top line growth of companies heavily dependent on hinterland such as FMCG, tractors, and motorcycles."

Volume growth of Coca-Cola in April-June quarter in 2013 crashed to 1%, down from previous year’s 20%, the slowest volume growth in five years. For the same quarter this year, the company has reported a global volume growth of 2% and has also said that it gained global value and volume share in the non-alcoholic ready-to-drink beverage category.