The Hindu Business Line : Nestle steps up efforts to grow market share

THE difficult operating conditions across the fast-moving consumer goods (FMCG) industry have affected sales performance of some products of Nestle India last fiscal. Though the company says that it has maintained its market share in most of the product categories by taking a few measures, including managing input costs and price points, improving distribution network as well as market penetration and making more effective use of its supply chain, sales of some key products remained below expectations in 2004.

Take for example liquid UHT (long shelf-life) milk. The Nestle India Chairman, Mr Martial G. Rolland, said in the latest annual report that the market performance of this product has been below expectations and a full review is being undertaken. And even as Maggi noodles continue to have the highest sales volume in India, among all Nestle companies, Maggi sauces have performed below expectations during 2004 due to aggressive competition, he added.

Milkmaid Sweetened Condensed Milk did not perform as per plan, and Mr Rolland said the company is taking corrective action to improve the performance of Milkmaid Squeezy. Similarly, in confectionery, Nestle Chocostick is being reviewed, even as the company said products such as Nestle Milkybar Eclairs, Nestle Eclairs and Polo lozenges have performed well.

In the recent past, Nestle has been reviewing the performance of Milo Chocolate Energy Food Drink and it launched Milo with `Badam Shakti' in select cities of Tamil Nadu during last fiscal. The Chairman said performance of the new variant is being monitored.

Among the products that continue to perform well from the Nestle stable are Nestle Munch and Nestle Kitkat chocolates, Nescafe instant coffee and Everyday Dairy Whitener.

Mr Rolland said in the annual report that the company is aware of the fact that with changing lifestyles, consumers are seeking food products that provide greater convenience, along with taste and pleasure, and that Nestle is working on several initiatives to provide consumers with products of their choice.

Among new products that Nestle launched last year are Nestle Coffee Eclairs, Nestle Chocolate Eclairs, Nestle Sweet Lassi and Nestum 123.

The company reiterated its commitment to the `value for money' and affordability planks and retained investments in brands, while refraining from passing on the entire increase in commodity prices to consumers.

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