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Nestle yet to regain glory days as volume lags at pre-Maggi ban level

Arnab Dutta/New Delhi 14 Mar 19 | 12:31 AM

Notwithstanding steady growth in volume since 2015, when its popular instant noodles Maggi was temporarily banned by the government, Nestlé India is yet to regain its glory days. 


In 2018, the sales volumes of the country’s largest beverages company stood at 447,155 metric tonnes (mt). In 2014, before the ban, its total volume was 455,897 mt. 

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Nestlé India, the largest manufacturer of instant noodles in the country, had sold 254,553 mt of food items under its flagship brand Maggi in 2014. Its volume sales in the category stood at 240,879 mt in 2018 — 5.4 per cent lower. 


In 2018, volumes grew by 14.5 per cent year-on-year (YoY). 


The brand Maggi represents its prepared dishes and cooking-aid product such as instant noodles, pasta, ketchup, and spices. It contributed 27.7 per cent to its net revenue. In 2015, the widely consumed instant noodles was banned in India and its volume had plunged 59.5 per cent to 103,138 mt. Since then, however, Nestlé India has grown in double digits almost every year. 


A Nestlé India spokesperson: said, "On Maggi Noodles, in terms of value we are almost back to where we during the pre-2015 period." The second largest category for Nestlé India is its milk and nutrition portfolio. It has recovered its 2014 levels, but is still lagging behind the 2013 level. 

In 2018, the category grew by 4.8 per cent year on year to 137,066 mt. In 2013, it had sold 138,772 mt of milk and nutrition products. 


Considered a money spinner for the Gurgaon-headquartered firm, its milk and nutrition portfolio includes some key brands such as Nan, Lactogen and Cerelac. It contributed 51.8 per cent towards its Rs 11,216-crore topline. 

Its beverages portfolio, comprising market-leading brand Nescafe, grew 10.6 per cent YoY in 2018 to 27,013 mt, but finished marginally lower than its 2013 level (27,717 mt). 


The category’s contribution in its net sales fell YoY to 13.6 per cent from 13.7 per cent in 2017. However, new products such as ready-to-drink tea and coffee and premium products launched under Nescafe Sunrise would boost its sales in the coming years, said Abneesh Roy, senior vice-president, Edelweiss Securities. 


 

Keeping up with the momentum of new launches, Nestlé introduced a bunch of products — both mass market and premium — in its confectionary portfolio last year. Its volume uptake, however, remained lower than 2013. 


In 2018, it sold 42,197 mt of confectionary products — much lower than 46,718 mt six years ago. 

Suresh Narayanan, chairman and managing director, Nestlé India, said the firm has left the spiral of negative volumes behind and was now ready to grow its business on all fronts. 


Last month, he said during an interaction, “We are now focused on all-round growth and not just survival. We have two-three dozen products in the pipeline." 


According to Roy, in 2018 Nestlé India strengthened its distribution base, sales capabilities and execution skills to get the leadership position in most categories. 


“The speed, efficiency and best-in-class roll-out of putting new products on to the shelves and online platforms, along with the requisite consumer sampling and engagement activities has ensured availability, visibility and accessibility. The fast-growing shopper and consumer opportunities on the e-commerce channels were tapped," he said. 

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