Nestle India on Friday said that the company is finding it challenging to move to the next stage with innovations to increase the salience.

“I think for us the challenge is to really take the company to the next stage to be able to increase the salience and also the relevance of our products which is what we are working on with our innovation pipelines across businesses,” said Suresh Narayanan, CMD of Nestle India in an interview with CNBC-TV18.

According to Narayanan, however, the situation for the company is relatively stable. “I would not say that everything is back to normal, but relatively it is a far more stable situation that we are seeing in terms of both demand for our categories and the overall sentiment for the Nestle brands in the marketplace,” he said.

Speaking about market share, he added, “It is always possible and it is true in a competitive market situation that someone can take advantage of a temporary glitch in a key player. So, I am not saying that I have been able to service the market 100 percent, that is probably not true, but I think by and large we have been able to sustain our market shares, to sustain over credibility, and to sustain the love for our brands. So, for me, these are important.”

Rural demand is doing better than urban demand due to the government's initiative, said Narayanan, adding that cities being more affected by COVID-19 cases was another factor. "Rural demand clearly is outpacing urban demand as of now and that is probably because the impact of COVID has been more pronounced in the metropolitan cities and the large cities as compared to the smaller towns and rural areas. Plus, also better agriculture and MGNREGA and various other things. So, I think that is one play that is coming,” he said.

Narayanan said the loss of the middle-class income will be an important trend to watch out for.

On ad spends, he said, “Initially the reaction of some of the players in the industry was clearly to pare down on advertising expenses because they were struggling to even keep the operations going and so what was the point of putting ads on television if I don’t have the product on shelves? So that was the philosophy. But I think most serious long-term brand marketers and those who have been in the consumer goods space for a long time and who have got long-term stakes in it, will quickly bounce back. So, I do not think that the advertising industry should be disheartened.”