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Seven months after Maggi controversy, Nestle bets on launches for growth
Barely seven months out of Nestlé’s half-a-billion dollar Maggi debacle, Suresh Narayanan, chairman and managing director of the Swiss packaged foodmaker’s India unit, is putting his best foot forward. Nestlé is launching more than 25 products across categories. “If you look at it, it is the biggest single-window launch for Nestlé, in a short span of two-three months,” Narayanan said.
Barely seven months out of Nestlé’s half-a-billion dollar Maggi debacle, Suresh Narayanan, chairman and managing director of the Swiss packaged foodmaker’s India unit, is putting his best foot forward.
Nestlé is launching more than 25 products across categories. “If you look at it, it is the biggest single-window launch for Nestlé, in a short span of two-three months,” Narayanan said.
Maggi remain crucial for Nestlé. So, the company is adding four new spicy variants, two flavours of cup noodles and one without onion and garlic, Narayanan said.
The new variants are aimed at getting a higher market share. Before the food regulator banned Maggi, Nestlé held 77% of the instant noodles market.
The ban resulted in the largest recall in the history of India’s packaged food business, where 27,420 tonnes of Maggi was destroyed. After the relaunch in November, Narayanan said, Maggi has cornered back 55.5% of the market.
Still, almost three-fourth of the new products are in other categories — Greek yogurt with 70% more protein, three new flavours of iced tea, a new masala tea, filter coffee, new range of chocolates, a milk product for kids and three ready-to-drink beverages.
For Narayanan, however, the bigger challenge is rivals — one being Godman-turned-entrepreneur Ramdev with his Patanjali brand of products, which expects to double its revenue to Rs 10,000 crore this year. Narayanan is not unnerved by Patanjali’s growth. “Competition is good… We will play to our strengths,” he said.
Brokerages, too, looked positive about Nestlé’s comeback. “Nestle is gradually getting back to double-digit sales growth, mainly led by volumes,” according to a Motilal Oswal equity report on Nestlé India. It also pegged the revenue growth for the next two years at about 16% each year.
“We are here to stay… The journey has just begun,” Narayanan said.
In 2015, the food and beverages market was worth Rs 2 lakh crore, and is expected to touch Rs 3.8 lakh crore by 2017. Of that, Narayanan is looking at a modest Rs 20,000 crore by 2020, almost 2.5 times of what Nestlé made in 2015.
