Nestle To Continue Its Launch Spree
Nestle India Ltd. said it will continue to launch new products aggressively this year as it chases a volume-led growth.
The maker of namesake coffee and Maggi noodles is working on 24-36 product launches, Suresh Narayanan, chairman and managing director at Nestle India, told BloombergQuint in an interview. It launched 40 products in the last two years and recalled 10 of those.
“Innovation-led volume growth will continue to be a core strategy for Nestle,” Narayanan said. “We are not changing anything of that matrix.”
The company is looking to boost its presence in the breakfast category with Indian options. It entered the Rs 2,500-crore cereal market in 2018 with NesPlus. Euromontior International expects the market to grow at a 10.7 percent annualised rate between 2018 and 2023.
Last year, Nestle India launched Nescafe read-to-drink cans, NesPlus, Maggi baked noodles, Maggi dip and spread, Nescafe coffee maker-mug and Everyday Chai Life instant tea mix.
New launches, however, meant higher marketing costs. In the October-December quarter, Nestle India’s earnings before interest, depreciation, tax and amortisation margin stood at 19 percent compared with 20.5 percent a year ago. That’s because its other expenses rose 31 percent on higher advertising and promotion spends.
But an aggressive strategy doesn’t mean that the company will not focus on profitability, Narayanan said.