Aon Benfield, a reinsurance intermediary, said the weather would have a big influence on the types of food and beverages sold at two of the UK’s largest bank holiday events. It compiled 15-year records for rainfall and temperature at the Notting Hill Carnival, and the Reading Festival.
Aon Benfield said companies planning to sell products this long-weekend should first check weather forecasts before putting all of their eggs in one basket.
‘Switch the drinks they consume’
Aon Benfield’s global head of weather risk Kurt Cripps said: “Drinks brands have become synonymous with the festival scene, and it’s well known that when the average temperature changes, or if rainfall is beyond a certain level, people will switch the drinks they consume or the food they eat.”
The chart below shows that Reading Festival experienced warm and dry weather in 2001 and 2003. Cripps said: “Ice cream, soft drinks, rosé wine, cider and bottled water brands on sale at the Reading Festival this year will be hoping for a repeat of 2001 and 2003.”
Meanwhile, the Notting Hill Carnival had very little rainfall in 2013, but the following year had the largest rainfall on record. Cider would be more favourable to consumers in 2013’s warm and dry conditions, while beer would make more sales in 2014’s milder and wetter climate, Cripps said.
‘Wrong weather can significantly reduce income’
“Events like Reading Festival are hugely important for food and beverage brands today,” said Cripps. “Too much of the wrong weather can significantly reduce income at a time when their marketing exposure is at its greatest.
“By overlaying historic weather experience against an individual company’s active results, you can begin to understand its impact and take steps to reduce the risk with a solution that meets any shortfall in sales or covers additional margin calls when demand goes up.”