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Nestle to focus on innovations across category, targets Rs 20,000 crore sales, says Suresh Narayanan

Nestle to focus on innovations across category, targets Rs 20,000 crore sales, says Suresh Narayanan

Nestle to focus on innovations across category, targets Rs 20,000 crore sales, says Suresh Narayanan
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By Ashpreet Sethi  May 17, 2018 6:30:37 AM IST (Updated)

Nestle India has brewed a strong March quarter. The  company is betting big on youth oriented product this fiscal, said Suresh Narayanan, Nestle India’s chairman.

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The company launched a new range of strong and light cold coffees named intense and latte on Wednesday as part of its coffee portfolio.
The coffee segment has seen a double digit growth, said Narayanan adding that 2017 was a year where all categories fared decently.
"All business segments had volume growth. Secular growth is important like a cricket pitch. We are now a pure play FMCG company as we have achieved Rs 10,000 crore topline,” said Narayanan.
When asked if Rs 20,000 crore sales target has been set yet, Narayanan responded that  it is ambitious, but the Nestle team is working towards achieving the same.
The FMCG major clocked a 13.4% growth after accounting for the Goods and Services Tax (GST) impact and saw a 8.5% overall volume growth.
The Maggi noodles business had a double digit growth followed by the chocolates segment – Kitkat – that witnessed a 30% growth, said Narayanan
Maggi contributed to a fourth of the turnover of Nestle India with no dramatic change in market share. The company will be focusing on innovations across segments to continue with its growth momentum.
He adds that most of the FMCG companies have done well as consumption has been on the higher side in India. The management believes that Nestle’s challenge is not what to launch but when to launch, said Narayanan.
“Some companies see green shoots in rural areas. To be honest, Nestle’s rural play is far less sensitive to urban play. For us, the action is in urban areas, tier two and three cities. Our brands are young and our target is the youth,” elaborated Narayanan.
The company had launched around 28 products in the last 18 to 24 months with the latest addition being in the breakfast category. Nestle will further cash on nutrition-based products sale in India through its partnership with General Mills.
Narayanan further clarified that the company is not making payments to the GST consumer fund due to any violations.
However, he refused to disclose the details about how much will be deposited in the fund. The GST on 178 items of daily use, which includes chocolates and cocoa-based products, were shifted from the top tax bracket of 28% to 18% and had asked all companies to pass on the benefits to consumers.
“Discussion with anti-profiteering authority was professional and transparent. We explained to authorities how we passed on GST benefits. We had proposed the interim amount to anti profiteering authority and necessary steps will be taken to ensure that the sum is deposited with consumer fund,” he said.
Nestle India boss said that competition in the sector should not scare, but energise existing players as they are able to tap into new opportunities.
“I believe new companies are good for the industry. Some small companies could become giants of the future. People and companies will refocus, be in the game and even come out of the game,” said Narayanan.
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