Nestle India banks on more sales from online channels

Bengaluru: Nestle India, one of the country’s biggest FMCG brands, is looking to increase the share of its sales through e-commerce and quick commerce platform, which saw 20% growth year-over year in the first nine months of 2023 and contributed to 6.6% of the company’s sales during the time, aided by the increased use of UPI and digitisation.

In the previous few years, the company was able to achieve higher volumes through a strengthened distribution infrastructure, doubling of distribution touchpoints, a 50% increase in salespersons on-ground and more in-shop visibility, Chairman and Managing Director Suresh Narayanan said in an institutional investors and analysts meeting on Wednesday.

Nestle India currently has 10 new projects in the pipeline that are expected to be launched in the coming months, and the company is also planning to look into niche opportunities presented by various geographies.

Half of the company’s portfolio was impacted by price hikes in the last few months, and these are not expected to be rolled back anytime soon as although the pace of increasing prices has come down, the price of commodities itself has not declined, the executive said. “While inflation in recent times has come down, commodity prices remain high,” he added.

For instance, milk prices have increased 60% since 2018, and green coffee prices have surged 47% during this time. Going forward, the company expects surging green coffee and packaging prices, the latter of which have increased recently due to the Israel-Gaza conflict-related oil price hikes, may cause some headwinds. However, the company may be able to hold the line for pricing of coffee and coco, if no dramatic or unpredictable challenges surface, Narayanan said.

At the same time, the entry of regional players and startups in the FMCG market has also caused volumes to come down marginally, but these are stabilising with time, Narayanan said.