Nestle brews plan to woo millennials via connected coffee machines

Our Bureau New Delhi | Updated on September 26, 2018

Suresh Narayanan, CMD, Nestle India

CMD hints at price hike in select categories

FMCG major Nestle India on Tuesday said that it is closely monitoring the impact of rising commodity costs and taking measures to improve overall efficiencies. It could look at increasing product prices in select categories to offset the costs.

The company, which has been on a product launch spree for the last two years, is now looking to launch its smart compact coffee machine called Nescafe E in the country. India will be one of the first few markets to see the launch of Nestle’s global innovation, which is a connected all-in-one travel mug and coffee machine.

Price hike

Replying to a query on the impact of increasing raw material costs, Suresh Narayanan, CMD, Nestle India, said, “The headwinds on commodities have already started due to a combination of issues such as rupee devaluation and rising crude oil prices besides the increase in domestic raw materials costs. Our focus has been on volume-led growth. So the endeavour of the company will be to try to mitigate some of these commodity headwinds and so we will not like to do across-the-board price increase. But in select categories, there could be some price increases.” He did not specify the timeline for the price hike.

“We are taking strong measures to enhance efficiencies in manufacturing, supply chain, sales and other cost heads within the company. So we will ensure that the price increases are selective and minimum since we have the capabilities to absorb them and it is apparent that the growth story of increased volumes and penetration would get stunted if we were to look at rampant price increases,” he added.

Capacity addition

At the same time, the company is actively examining the possibilities of capacity expansion. “Seeing our sustained performance, we are actively examining the possibilities of the next wave of capacity expansion. We typically expand footprint in existing plant location. We could look at other sites,” Narayanan said.

Meanwhile, the company is hoping to woo millennial consumers and expand coffee consumption through the launch of Nescafe E. It will be first launched on Amazon and later at retail outlets such as Croma, Reliance Digital and Crossword across Delhi, Mumbai and Bengaluru.

“We have been constantly looking to contemporise Nescafe. We believe the next stage of growth in the coffee category, will be about enabling lifestyles and modes of consumption. Nescafe E is designed to offer a smartphone-connected and convenient coffee experience to the millennials,” Narayanan said.

Unique invention

Nestle India is hoping to bring in elements of mobility and personalisation with the launch of this coffee machine, which can be operated remotely through an app which offers consumers the ability to customise the beverage recipes.

“This is a first of its kind innovation worldwide that focuses on transforming an instant-coffee experience to a personalised experience,” he added.

Published on September 26, 2018

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