Why are Indian firms buying weather data?

Can the weatherman add zing to the marketing and distribution strategy of India Inc this summer? Going by the number of Indian companies footing it to the weather office, perhaps he can.

The number of companies buying temperature and rainfall data for different regions of the country from the India Meteorological Department has gone up sharply -- from 20-25 orders a month till a couple of years ago to 15 orders a day in the last couple of months.

Prakash Rao, director of the IMD's National Data Centre located in Pune, told Business Standard that in recent months, several companies in construction, consumer goods, agriculture and shipping have purchased rainfall and temperature statistics. And taking corporate confidentiality seriously, he did not divulge the names of the companies.

According to Rao, the prices of IMD's products vary depending on the depth and the quality of the data required by clients. It is relatively cheap at Rs 15 for a day's data.

If companies want a soft copy, the IMD charges Rs 1,000 for "computerisation charges". The National Data Centre can provide weather statistics for the last 30 years.

LG Electronics, for instance, is believed to have bought the climate statistics well in advance this time. "Companies typically use the climate figures of the last few years, coupled with the long-range forecast of the monsoon issued on April 16 every year to get an idea of the things to come," said Rao.

With margins under pressure and slow topline growth, Indian fast-moving consumer goods firms now have to expand their distributor network in untapped rural markets.

And this is where the IMD data, comprising daily rainfall, temperature and pressure statistics from 391 centres spread across the country, comes in handy.

In India, the fortunes of companies in sectors like FMCG, consumer durables and construction depend on the weather pattern. For instance, the Rs 8,000-crore (Rs 80 billion) soft drinks industry derives nearly 80 per cent of its sales during the seven-month period from March to September, and nearly 70 per cent of the refrigerator and air-conditioner sales take place during this time.

This year, companies dependent on the summer months for the bulk of their sales are concerned about the prolonged winter in several parts the country.

"The offtake of refrigerators usually starts by the middle of February every year but this time sales are off to a slow start because of the weather," said Anil Arora, head (refrigerators), LG India.