At a time when the Central government is pushing the “Vocal for Local” messaging, Nestle India on Tuesday said “Make-in-India” and “Made-for-India” has been the key focus for the company for decades. Despite disruptions due to the Covid-19 pandemic, the Swiss major’s local arm, also said that focus on India has not been diluted and its investment plans, including setting up of the ninth factory in Gujarat, are on track.
Speaking to reporters on Tuesday, Suresh Narayanan, Chairman and Managing Director, Nestle India, said, “The Prime Minister in his address was referring to strengthening ‘Make in India’ and focussing on manufacturing in India which unfortunately has reached different kind of interpretations in some quarters. We have a presence in India for nearly 108 years and are a listed company with 7,200 employees who are 99.7 per cent Indian. We operate eight factories in the country that employ Indian factory workers, closely work with Indian dairy, wheat, spice and coffee farmers and humbly contribute to the Indian exchequer. Our brands have been loved by consumers in the country for decades.”
“Therefore, I believe in every sense of the term Nestle India, is all about Make-in-India and Made-for-India,” he added.
Replying to a query on government’s recent decision to sell only indigenous products at CAPF (Central Armed Police Forces) canteens, Narayanan said the company has submitted details of its products, as sought by the concerned authorities, on whether its products were made in India, whether raw materials were sourced from India or whether they are imported.
As the country enters into lockdown 4.0, Nestle India said that its factories have now ramped up capacity to about 70 per cent with about 50-60 per cent workforce on an average, in line with government norms and hygiene protocols.
“At our factories, with our permanent workforce, the manpower footprint has been fairly strong. They are coming back gradually, as we are constantly communicating with them on their concerns. At our warehouses and other locations, where we have contractual workers, situation has improved in the past few days,” Narayanan said. The food processing industry has recently also urged the government to allow companies to increase workforce to about 75 per cent at their factories, in green and orange zones.
For now, the company is prioritising manufacturing only those SKUs of brands, for which it is witnessing consumer demand. “In line with emerging consumer trends, we have recast our innovation pipeline. We are also evaluating all our brands and SKUs and trying to see which will be positively impacted and need to be accelerated,” he said.
Outlining the challenges for the consumer products industry in the coming quarters, he said, “Factors such as the robustness of underlying demand for brands, depending on whether they are essential or discretionary, will change the equation for many consumer product companies. Also, other key factors will be ability to ramp up of manufacturing capacity, constraints around labour and infrastructure deployment and whether MSME suppliers are able to ramp up their capacities as part of the entire supply chain.”
Changing consumer behaviour
Talking about changes in consumer behaviour due to the pandemic, Narayanan said, consumers are increasingly looking for trustworthiness, health, safety and nutrition in products.
“While opportunities for premiumisation and large-sized SKUs will remain, as pantry loading is here to stay, consumers who have limited budgets will also be downtrading. Our product portfolio is geared up for both these opportunities. We are also preparing ourselves for trends such as greater focus on health and wellness and focus on immunity boosting products,” he added.