Nestle India is stepping up focus on accelerating volume growth amidst an “inflationary-impacted market”. The company said it will continue to ramp up distribution, which is an important growth vector, to about six million touchpoints over the next 4-5 years from about 5.1 million touchpoints currently.

The consumer goods industry will benefit from the uptick in private consumption on the back of good monsoons and re-injection of money in the market with the formation of the new government post elections, said Suresh Narayanan, Chairman and Managing Director, Nestle India.

Stating the market continues to be impacted by inflation, Narayanan added that while there were expectations of a consumption uptick due to elections but due to the hot summer season it may turn out to be “ just another normal month”. “The market is watching for a good monsoon and when the new government is formed for re-injection of money into the market,” that will boost consumption, he added.

Strategy

The company which recorded domestic sales growth of about 9 per cent in the March quarter said volume growth was pegged at about 4-5 per cent. “The future of consumer goods companies will rest on their capability to penetrate more households with more products and occasions,” he said.

Also read: Nestle India says added sugar levels in Cerelac are below FSSAI standards

Narayanan said that the company’s strategy will be to accelerate volume growth in the coming times. “The company’s strategy has been penetration-led volume growth. So I want to get back to volume-growth as strongly and quickly as possible and not linger on with just value growth,” he added.

The company is also strengthening its premiumisation play with its bets on nutraceuticals and pet foods segments besides introduction of Nespresso portfolio in India. Talking about recent announcement to form a Joint-Venture with Dr. Reddy’s Laboratories in the health science nutraceuticals space , Narayanan said that currently this business is relatively small space with business of just about ₹50 crore. “We are looking at doubling or tripling this business in the next 4-5 years.” he added.

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