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Heat wave boosts sales of cooling products and beer

Kyodo

The summer heat may be sapping people’s energy, but it is firing up several sectors of the economy as demand increases for products ranging from beer and air conditioners to bedding that claims to keep sleepers cool at night.

Beer- and beverage-makers are moving to boost production, reflecting a surge in demand amid the extremely hot weather nationwide.

In late July, Kirin Brewery Co. lifted the month’s output of its beer products by 20 percent from the previous year after seeing a rise in demand from mid-July. The brewery had originally planned to increase production by 10 percent in the month.

Asahi Soft Drinks Co. has raised its output of Koime no Calpis, the richly flavored version of its popular beverage with added sodium and fermented lactic acid, by 20 percent. It also introduced a summer version of its Jurokucha blended tea drink, again with added sodium. The Asahi Group Holdings subsidiary expects those products to sell well as beverages aimed at helping to prevent dehydration and heatstroke.

Suntory Holdings has increased production of its mainstay product, the Premium Malt’s, by 15 percent to 20 percent for the July to August period, and also decided to raise its output of water, tea and sports drink products by 15 percent more than it had planned in June.

At Sapporo Holdings, production of “ready to drink” alcoholic beverage products, such as canned chūhai white liquor highballs, doubled in July to August from the previous year partly because new products were introduced.

The country logged its highest-ever temperature of 41.1 degrees Celsius in Kumagaya, Saitama Prefecture, on July 23. The Meteorological Agency anticipates the high temperatures to continue for the time being, adding that temperatures of 35 C or higher may be observed for days in some places.

Air conditioner manufacturers have been enjoying a boost in sales thanks to the heat wave.

Fujitsu General said its sales for the April-September period are expected to rise 7 percent from the previous year, to ¥35.5 billion.

Vice President Hiroshi Niwayama said sales volume for its home-use air conditioners grew about 40 percent for the month through late July from the same period last year.

The Japan Electrical Manufacturers’ Association (JEMA) said the shipment value of air conditioners stood at ¥281.7 billion in June, up 2.4 percent from the previous year and the highest for the month in 10 years. Shipments are expected to continue rising for the time being amid the prolonged scorching heat, it said.

Major utilities, meanwhile, are operating thermal power plants at full capacity to cope with surging electricity demand for air conditioner use at households and offices.

Tokyo Electric Power Company Holdings Inc. saw power demand in the areas covered by the company surge to 56.53 million kilowatts on the afternoon of July 23, the highest since April 2016 when the liberalization of Japan’s retail electricity market started.

In a bid to meet the demand, Tepco Fuel & Power Inc., a thermal power generation unit of the Tepco group, allowed some of its plants to surpass their maximum output limit as an emergency measure.

Meanwhile, on July 18 Kansai Electric Power Co. received supplies of electricity from other utilities, including Chubu Electric Power Co. and Shikoku Electric Power Co., to cope with surging power demand. It also resumed operations of thermal power generation units which had been mothballed.

The summer heat is also leading to stronger sales of such goods as sunscreen, antiperspirant and deodorant, and raising consumer interest in bedding that is said to help users sleep more comfortably during hot nights.

Major cosmetics-maker Shiseido Co. ranks its Anessa sunscreen brand and Ag Deo 24 antiperspirant among its most popular products. Another cosmetic-maker, Mandom Corp., said its Gatsby Body Paper sweat-towel series for men is selling well.

Francebed Co., a bed and mattress company, has introduced a new quilt that uses a special material claimed to provide a cooling effect for users. The company also sells rabbit- and otter-shaped body pillows that include cooling materials.

According to Mitsubishi UFJ Morgan Stanley Securities Co., if Tokyo, Nagoya and Osaka continue to reach temperatures two degrees higher than usual — as they did in late June — private consumption in the June to August period could increase by ¥645.8 billion compared to normal.

Private consumption accounts for nearly 60 percent of gross domestic product.

The company made the estimate based on its research about the relationship between consumption and temperatures since 1995. It says scorching summer heat has the effect of pushing up overall private consumption by boosting sales of soft drinks, beer and air conditioners, as well as household electricity bills.

The Dai-ichi Life Research Institute estimates that a 1 C rise in the average temperature in the July-September period boots household consumption expenditures by ¥288.4 billion. At the same time, however, Toshihiro Nagahama, chief economist at the institute, warned that when the summer is extremely hot households tend to tighten purse strings later in the year.

“Attention should be paid to a risk of a decline in private consumption following a surge,” he said