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Informist, Tuesday, Aug. 4, 2026

 

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--Nestle India: See sizeable white space among consumers across pdt categories 
--CONTEXT: Nestle India management comments in post-earnings analyst concall 
--Nestle India: Want to keep direct control over distribution 
--Nestle India: See quick-comm, e-comm as launchpad for new products 
--Nestle India: Quick-comm, e-comm helping co scale up faster in urban mkts 
--Nestle India: Sales growth in q-comm, e-comm ahead of overall mkt growth 
--Nestle India: See good opportunity from middle income, affluent consumers 
--Nestle India: Targeting volume-led growth in days ahead 
--Nestle India: Will focus on further premiumising portfolio 
--Nestle India: See rapid growth opportunity to further grow KitKat sales 
--Nestle India: Strengthening ready-to-drink Nescafe pdts further going ahead 
--Nestle India: See advertising spends crucial to achieve growth 
--Nestle India: See best years of growth yet to come 
--Nestle India: Medium-long term growth resilient to current macro headwinds 
 

 

By Avishek Rakshit & Simran Rede

 

KOLKATA – Even as Nestle India Ltd. expects macroeconomic headwinds to weigh on consumption in the near term, it will continue to invest in strengthening its brands and market presence, including advertising, as it remains optimistic about its medium- to long-term growth prospects in India. 

 

Companies typically scale back marketing and advertising spending when they expect a consumption slowdown, as such spending may not generate the desired sales. Moreover, higher advertising spending can weigh on margins. While some companies cut advertising spending on year, others just reduce the share of their budget allocated to advertising.

 

"We are seeing a little bit of slowdown in market growth, as reported by (AC) Nielsen. Also, there is a little bit of impact on food inflation. But I would just like to point out that some of these macro factors impact when penetration levels are 100%, when consumption levels are comparable to some of the other countries which have a similar profile," Manish Tiwary, chairman and managing director of Nestle India, said at a post-earnings call with sector analysts Tuesday. The company had declared its June quarter results on July 22.

 

Banking on volume-led growth and further premiumisation of its portfolio, the company is confident of sustaining growth, driven by its presence in categories that remain underpenetrated in India and offer significant headroom for expansion. 

 

For instance, biscuits have a penetration of 97%, compared with just 37% for noodles. Similarly, tea has a penetration of 91%, while coffee is consumed by only 33% of Indian households. 

 

Nestle also sees significant opportunity for its KitKat wafer chocolate brand. Last financial year, India became Nestle S.A.'s largest market for wafer chocolates. Compared with consumer penetration of around 63% for chocolates in India, Nestle's chocolate portfolio has a penetration of only 23%.

 

Nestle is the market leader in India's noodles segment through its Maggi brand and also leads the instant coffee category with Nescafe. India is Nestle S.A.'s largest market globally for the Maggi instant noodle brand. Maggi is sold in more than 80 countries. 

 

Nestle India is strengthening its Nescafe portfolio by introducing new products and coffee machines which can roll out both hot and cold coffee. 

 

"I remain quite confident of our ability to handle these short-term blips, and the same is true for the macroeconomic geopolitical situation. Yes, it's a challenge... I still believe the medium- to long-term growth story for us does not get impacted," Tiwary said.

 

Going ahead, the company is banking on volume-led growth in the country with a focus on further premiumising its products. The middle and affluent class and rising income levels in a section of households present the growth opportunity for the company, Tiwary said. 

 

In the June quarter, Nestle posted a sales growth of over 25% led by a rise in volumes. All four product groups of the company delivered strong double-digit growth, supported by high double-digit growth across channels. The company also significantly increased its advertising spend. 

 

Nestle India's advertising spending rose 41% on year in the June quarter, following a 52% on-year increase in advertising and promotional expenses in the March quarter. For the year ended March, advertising spending as a percentage of sales rose to 5.3% from 4.0% during 2021-22 (Apr-Mar). In absolute terms, Nestle India spent INR 12 billion on advertising, up from INR 7 billion in FY22.

 

Maintaining that Nestle India will continue to invest to strengthen its brands to increase penetration levels, Tiwary said that the spends are likely to come down proportionately in the coming days. "Obviously, it won't be 40% (increase in advertising spend) all the time. We have some pretty hard financial metrics around this investment. It's not that all cholesterol is not good cholesterol, and we are very, very conscious of it. And therefore, we will never hesitate to invest behind the brand as long as it's giving us the right returns," he said. 

 

After seeing strong sales traction from quick commerce and e-commerce channels, which also provide the company the necessary platform to introduce new products at premium price points such as Nescafe Gold, Nescafe Vietnamese Latte, and others, the company is eyeing quicker growth from these sales channels and expects sales to scale up much faster from these channels as compared to the traditional stores. 

 

As sales from quick commerce and e-commerce scaled up for the company, so did its premium product range. Higher-priced products accounted for 14% of Nestle India's total sales in FY26 as against 11% in FY21. Tiwary said that Nestle directly controls its distribution, which enables the company to maintain and track demand and supply the correct products and pack sizes. 

 

Even when its peers and nearly all consumer goods companies faced an inventory overhang in the December quarter after the government cut goods and services tax to boost consumption, Nestle India faced minimal heat from its sales channels as it directly handles distribution and was able to place correct packs and products in its sales channels during the disruption.

 

"With a strong, resilient model, exceptional execution capabilities, and a clear term, clear long-term strategy, we believe our best years of growth are still to come," Tiwary said. 

 

Among the 190 countries where Nestle operates, India offers one of the most compelling long-term growth opportunities.

 

Tuesday, Nestle India's shares closed 0.7% lower at INR 1,520.00 on the National Stock Exchange. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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