Nestle plans to bring more global products to India

In its annual report for 2016, CMD Suresh Narayanan says exploring ways to bring in 2,000 brands

Nestlé India, best-known for its Maggi instant noodles, is considering options to introduce more international products in the country.

In its just-released annual report for 2016, Suresh Narayanan, chairman and managing director, Nestlé India, said, “We have 2,000 brands globally and we will explore ways to bring them to India.”

The statement acquires significance since Nestlé, following the Maggi crisis in 2015, has been looking to reduce its dependence on the instant noodle brand, which gave it nearly 30 per cent of its revenue earlier. For 2016, the company reported a 12.8 per cent increase in net sales to Rs 9,159 crore, compared to Rs 8,123 crore a year before. 

Maggi’s contribution, however, to Nestlé’s top line becomes clear if the firm’s turnover for 2014 is taken into account. 

For that year, Nestlé India’s net sales was Rs 9,854 crore, 30 per cent of which or nearly Rs 3,000 crore was contributed by Maggi. Other brands such as instant coffee Nescafe and wafer chocolate KitKat are comparatively smaller in size, according to analysts.

Since the crisis, Maggi, which had a share of 75 per cent earlier in instant noodles, has clawed its way back to achieve a share of 60 per cent, the firm said in its 2016 annual report. Nestlé follows a January to December accounting period.

The firm has also stepped up its launches, rolling out over 30 new product renovations and innovations largely in existing categories in 2016. Nestlé’s product categories include milk products and nutrition, beverages, prepared dishes and cooking aids (this is the category where Maggi sits) and chocolates and confectionary.

While it did enter new segments such as breakfast cereals in 2016 with Nestlé Ceregrow, there are more in the pipeline including pet care, health care, skin care and hair care this year, Narayanan said in an interaction earlier. Stepping into skincare and hair care will mark a strategic shift for the company into non-food businesses in line with its global strategy of strengthening its non-food portfolio, Narayanan said.

 “Nestlé is not just a food company and a new complexion of Nestlé will be clearly visible in 5-10 years,” Narayanan said. 

The 2016 annual report indicates that the company’s research & development centre, set up in 2012 at an investment of Rs 287 crore, will be leveraged in this effort to enter into new areas. 

“Along with the network of R&D centres across the globe, the research & development centre in India worked towards developing winning concepts, suited to local consumers,” the annual report said. 

The firm also prioritised digital engagement, introducing 24x7 consumer engagement services thereby enabling direct consumer connect, it added.