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Nestle India aims to restore fast growth

November 24, 2015 13:05 IST

Nestle

 

Nestlé opposed the central government’s plea to test more samples

Nestle India, this country's largest food products company by revenue, is keen to restore double-digit net sales growth.

And, hopes to step up innovation and consider getting into new categories, Suresh Narayanan, chairman and managing director, said in a recent meeting with analysts.

Narayanan formally took charge of Nestlé India on August 1. He said he was keen to eliminate all issues pertaining to the Maggi instant noodles controversy.

He was happy, he said, at the way the brand's relaunch had taken place.

The company has recommended production of Maggi at its largest manufacturing unit in the country, Pantnagar in Uttarakhand, giving a fillip to the relaunch.

This was a key hurdle the company was looking to get past, after clearing the court-mandated safety tests by October 16. Pantnagar becomes the fourth factory to resume production of Maggi, after Nanjangud (Karnataka), Moga (Punjab) and Bicholim (Goa).

Narayanan reiterated the company would take “pro-active pricing action” to gain market share. Nestlé recently cut the price of its tetra pack milk under the Nestlé A+ brand by 20 per cent, bringing it at par with rivals such as Amul. The price of Nestlé A+ Dahi (curds) was reduced by 16.7 per cent, analysts said.

The company, said Narayanan, would remain focused on e-commerce following its exclusive, limited edition sale on Snapdeal of the relaunched Maggi, as well as pushing price-offs and sales promotions in categories such as chocolates.

Nestlé India had, in the wake of the Maggi crisis, reported its first quarterly loss in 17 years in the June quarter, plus a 60 per cent drop in net profit for the September quarter. The December and March quarters are not expected to be very strong either, said analysts, as the company slowly gets backs to normalcy after the five-month ban and recall of Maggi.

Court battle continues

On Monday, Nestlé opposed the central government’s plea to test more samples, during a hearing at the National Consumer Disputes Redressal Commission.

Nestle is fighting the government to set aside a class action suit initiated by the latter, one that seeks Rs 640 crore (Rs 6.4 billion) in damages, on charges of misleading consumers on Maggi.

The Centre urged NCDRC to order testing of about 30 more samples of the instant noodles before concluding the case.

A decision on this plea was deferred by the bench of V K Jain, the forum's president, and B C Gupta.

They rejected the food major’s argument over their jurisdiction to hear the suit. On more testing, Nestlé counsel Iqbal Chagla’s made arguments on the question of accreditation of the laboratories where the samples were proposed to be sent.

New video a hit

Nestlé India, also nutrition partner for the Delhi Half Marathon, has issued a video featuring 104-year-old and Indian-origin British national Fauja Singh, termed the oldest marathon runner in the world.

The film, created by digital agency Sapient Nitro, has had nearly half a million impressions on social media since its release two days earlier, said K V Sridhar, the agency's chief creative officer.

Narayanan of Nestlé had earlier said the company would use every marketing lever to make itself visible.

Observers say this is being put into practise.

In recent months, the company has steadily released videos, either speaking of Maggi or highlighting its merits.

The latest video links Nestlé's centenary celebrations with Singh and how the two have continued to get going even after having touched the three-digit mark in age.

Viveat Susan Pinto and Arnab Dutta in Mumbai/New Delhi
Source: source image