After witnessing a slowdown over the past few quarters due to factors such as high food inflation, the packaged food sector is expected to see stabilisation, Nestle India Chairman & Managing Director, Suresh Narayanan stated at the company’s 66 th Annual General Meeting on Thursday. 

The company’s board also approved issuance of bonus equity shares in the ratio 1:1 to its existing shareholders and said the record date to determine shareholder eligibility will be announced in due course. This is subject to final approval in the Extraordinary General Meeting .

“Out of the 32 quarters, in 22 quarters the company has recorded double-digit growth, which means 10 quarters have not been double-digit. There has been an overall slowdown in the consumer goods space because of food inflation, the evolution of real incomes, unemployment and various other global maladies. Happy to report that things are stabilising,” he said.

Narayanan noted that the last 12 months have been a bit tough but things are coming back as food inflation is under control. “Food inflation has been quite significant in the country that obviously has led to strained price lines as far as some of our brands are concerned. We have therefore looked at a series of cost saving and efficiency initiatives, and only after that initiated price increase in a responsible manner in order to ensure category growth remains,”he added.

Stating that commodities such as cocoa and coffee have witnessed decadal highs in terms of costs, Narayanan added that it put enormous pressure in terms of managing both the penetration growth and the bottom line of the company. “And therefore there have been short term pressures, but hopefully we will be getting back to the normal stride in the coming quarters and months,” he noted.

Commodity inflation

Commodity inflation has been challenging for the company, which has been focusing on volume led growth strategy. “Sadly, we have had to make quite a few price increases, which has had a short term impact on volumes. So going forward we will not like to use price increases, wherever we can. But again, it will depend on the extent of the cost increases. But overall evolution looks to be a bit more positive in the coming quarters,” Narayanan said.

He said about 8 per cent of domestic sales now come from e-commerce, out of which quick commerce’s share is at 6 per cent. “ E-commerce is a relatively fast-growing channel. But the company believes in having a healthy balance across channels whether its traditional trade, modern trade, e-commerce or quick commerce.” .

On the proposed issuance of bonus equity shares, Narayanan said this fulfills a “long standing wish of shareholders” and will enhance retail investor participation.

Published on June 26, 2025