Nestle India on Friday said it is committed to making investments of about ₹4,200 crore till 2025, which will include investments in setting up its tenth factory in Odisha.
The packaged food major believes the next phase of growth will not just come from mega cities but also from growing its presence in semi-urban and rural regions, which currently contribute about 20 per cent to its sales. At the same time, it is betting big on the premiumisation opportunity.
Fresh investments
Speaking at a select media roundtable, Suresh Narayanan, Chairman and Managing Director, Nestle India, said, “Our investments in Make-In-India have been significant. From 2020 until the first half of 2023, we have already spent about ₹2,100 crore on the augmentation of manufacturing capabilities. Now, another ₹4,200 crore will be invested from 2023 to 2025. This includes about ₹894 crore of investments in the new factory in Odisha.”
Besides the new plant in Odisha, the fresh investments will also fund the phase-3 and phase-4 expansion of the company’s Sanand factory as well as capacity enhancement at the Moga factory.
“The next phase of growth is not just going to come from strengthening our portfolio in urban India but also in semi-urban and rural India. We are seeing growth not just in mega towns and metros but also in Tier 1-6 towns,” Narayanan said.
He added that the company is focussing on growing its distribution footprint in semi-urban and rural regions in 12–13 States and offering relevant packs to grow its product portfolio salience in these regions.
Premium play
With the growing aspirations of Indian consumers, the packaged food major is also strengthening its premium play across various categories, including chocolates and coffee. “While a third of our portfolio is price-point-led, wherever we have opportunities for premiumisation, we are doing it aggressively,” he added.
Narayanan added that while headline inflation is under control, food inflation remains a matter of concern. “With the kind of torrential rains that are taking place, what impact will this have on the winter crops, It’s anybody’s guess... I would still say the specter of food inflation is going to remain. It’s not something that we can wish away that quickly,” he said.