Nestlé India recently said the firm was committed to making investments of about Rs 4,200 crore till 2025, which will include investments in setting up its tenth factory in Odisha. Suresh Narayanan, chairman and managing director, told CNBC-TV18 that the company has spent Rs 2,130 crore in capacity expansion from 2020 to 2023 and this has been spent on capacity creation.

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From the first half of 2023 till 2025, Rs 4,130 crore investment has been announced.

"Over Rs 6,000 crore investments is coming around. In this, about a third will be invested in prepared dishes and cooking aids segment, about a third will be in chocolates and confectionaries and rest will be in nutrition and coffee," he said.

In the last seven years, Nestlé India has launched over 100 new products. Talking about the trajectory for the portfolio Narayanan said that it is driven by consumer trends.

The CMD said all of Nestlé categories will see a premiumisation thrust. "In the market, there is a strong trend towards premiumisation for brands. There is a trend for brands that have high quality and safety nutrition, and, in a situation of economic stress, there is a play also on the mainstream and the price points," he said.

Narayanan said the company was planning to get into newer categories in order to establish new pillars of growth.

He mentioned that there are about 30-odd projects in the works in terms of new products and categories, and about 10 new product launches have already happened in the first half of 2023.

Nestlé is also betting on the Health Science category. "It's a slow-burn category and we expect it to contribute 2-5 percent to the overall revenue in 5-10," the CMD said.

He also had a caution, that on inflation. He said 2022 saw unprecedented inflation and if inflation moderated, volume growth would go back to 7-8 percent. The firm's underlying volume growth for the April-June period stood at 4-5 percent, compared to the CNBC-TV18 expectations of 7-8 percent.

He added that food inflation was still a matter of concern for the company.

For the June quarter, Nestlé India reported a net profit of Rs 698.3 crore, which was in line with CNBC-TV18's poll expectations of Rs 690 crore. Other parameters like the company's revenue, operating profit and EBITDA margin were also largely in-line with CNBC-TV18's poll expectations.

How did Nestle's various product groups fare during the Q1 of FY24

Prepared Dishes and Cooking Aids: Double-digit growth driven by Maggi and distribution expansion.

Milk Products & Nutrition: Strong double-digit growth despite inflationary pressures, driven by Milkmaid and Peptamen.

Confectionery: Kitkat and Munch contributed to double-digit growth

Beverages: Growth led by greater household reach for both hot and cold coffee occasions.

Petcare: Felix received positive feedback from trade and cat parents.

(Will be updated)

First Published:Jul 31, 2023 4:52 PM IST