Nestle India is betting big on “rurban” expansion, innovation and premiumisation strategies and considers them among the key growth engines for accelerating its business. In its annual report for 2022, the packaged food major said it has been sharpening its geographic focus and increasing distribution points to sustain its rurban-focused strategy.
In a letter to shareholders, Suresh Naryanan, Chairman and Managing Director, Nestlé India, said: “India is among the fastest growing markets for Nestle” backed by innovation and a diversified portfolio of strong brands. He added that Nestle India delivered the “highest double-digit growth” in a decade led by “sustained volume and mix-led growth” which led to a strong value growth in 2022. The company follows January-December period as fiscal year.
“ As we look confidently at the year ahead, the storm clouds of food inflation, acceleration of war and indeed the drum beats of recession in parts of the world continue to surround us. The company’s steadfast focus on building volumes, deepening “Rurban” expansion, bringing innovations with the support of Nestle Group’s Global Research & Development network, astutely managing “value” and simultaneously nudging the premiumisation trend that is driving economic recovery in parts will fuel momentum,” Naryanan said.
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Consumer connect
As part of its strategy to accelerate “rurban” thrust by going deeper in smaller towns and cities, the packaged food major added about 55,000 villages and 1,800 distribution touchpoints in 2022. It increased consumer connect through village Haat activities and smart stores in these regions. While Nestle’s direct reach grew to 1.5 million outlets in 2022 from about 1.4 million in 2021, overall reach for the company is pegged at 5.1 million outlets.
Milk products and nutrition segment remains the largest contributor (40.4 per cent) to Nestle India’s sales and grew by 9.5 per cent y-o-y in 2022. Contribution of prepared dishes and cooking aids segment, led by brand Maggi, was pegged at 32.2 per cent and clocking a growth of 15.6 per cent y-o-y in 2022. “Maggi Noodles in 2022 saw the highest ever distribution and maintained market leadership as per Nielsen report,” the company added.
Confectionery segment, led by brands such as Munch and Kitkat, grew 25 per cent y-o-y and contributed 16 per cent to the company’s sales. Beverage segment was up 19.2 per cent year-on-year in 2022 and contributed 11.4 per cent to the overall company sales. Nearly 6.5 per cent of the company’s sales came from the e-commerce channel which witnessed a growth of 41 per cent in 2022 compared to 2021, it added.