Summary

  • NESTLÉ India is a subsidiary of NESTLÉ S.A. of Switzerland.
  • NESTLÉ India has presence across India with 8 manufacturing facilities.
  • Nestle India has more than 2000 brands ranging from global icons to local favorites, and are present in 186 countries worldwide.

Overview

NESTLÉ India (NSE: NESTLEIND) is a subsidiary of NESTLÉ S.A. of Switzerland. With eight factories and a large number of co-packers, Nestlé India is a vibrant Company that provides consumers in India with products of global standards and is committed to long-term sustainable growth and shareholder satisfaction. 1

The Company insists on honesty, integrity and fairness in all aspects of its business and expects the same in its relationships. This has earned it the trust and respect of every strata of society that it comes in contact with and is acknowledged amongst India's 'Most Respected Companies' and amongst the 'Top Wealth Creators of India'.

NESTLÉ India manufactures products of truly international quality under internationally famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE, MILKMAID and NESTEA and in recent years the Company has also introduced products of daily consumption and use such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Dahi and NESTLÉ Jeera Raita.

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Company History

NESTLÉ's relationship with India dates back to 1912, when it began trading as The NESTLÉ Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in the Indian market.

After India's independence in 1947, the economic policies of the Indian Government emphasised the need for local production. NESTLÉ responded to India's aspirations by forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the Government wanted NESTLÉ to develop the milk economy. Progress in Moga required the introduction of NESTLÉ's Agricultural Services to educate, advise and help the farmer in a variety of aspects. From increasing the milk yield of their cows through improved dairy farming methods, to irrigation, scientific crop management practices and helping with the procurement of bank loans.

NESTLÉ set up milk collection centres that would not only ensure prompt collection and pay fair prices, but also instil amongst the community, a confidence in the dairy business. Progress involved the creation of prosperity on an on-going and sustainable basis that has resulted in not just the transformation of Moga into a prosperous and vibrant milk district today, but a thriving hub of industrial activity, as well.

NESTLÉ has been a partner in India's growth for over a century now and has built a very special relationship of trust and commitment with the people of India. The Company's activities in India have facilitated direct and indirect employment and provides livelihood to about one million people including farmers, suppliers of packaging materials, services and other goods.

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Plant Location

After more than a century-old association with the country, today, NESTLÉ India has presence across India with 8 manufacturing facilities and 4 branch offices. 2

NESTLÉ India set up its first manufacturing facility at Moga (Punjab) in 1961 followed by:

  1. Moga (Punjab) in 1961
  2. Choladi (Tamil Nadu), in 1967
  3. Nanjangud (Karnataka), in 1989
  4. Samalkha (Haryana), in 1992
  5. Ponda (Goa),in 1995
  6. Bicholim (Goa), 1997, 
  7. Pantnagar (Uttarakhand), in 2006 
  8. Tahliwal (Himachal Pradesh), In 2012

The 4 Branch Offices located at Delhi, Mumbai, Chennai and Kolkata help facilitate the sales and marketing activities. The NESTLÉ India’s Head Office is located in Gurgaon, Haryana.

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Brands

NESTLÉ India has more than 2000 brands ranging from global icons to local favorites, and are present in 186 countries worldwide. 3

Beverages

  • NESCAFÉ
  • NESCAFÉ CLASSIC
  • NESCAFÉ GOLD
  • NESCAFÉ SUNRISE
  • NESTEA ICED TEA
  • É by Nescafé
  • Nescafé Latte

Nestlé Breakfast Cereals

  • Koko Krunch
  • Koko Krunch Choco Burst
  • Koko Krunch Strawberry Flavour Burst
  • NesPlus Crunchy Flakes
  • NesPlus Crunchy Granola

Chocolates and Confectionery

  • NESTLÉ BAR ONE
  • NESTLÉ KITKAT
  • NESTLÉ MUNCH
  • NESTLÉ MILKYBAR

Dairy

  • NESTLÉ a+        
  • Nescafé Cold Coffee
  • NESTLÉ MILKMAID

Nutrition

  • Nestlé Nangrow
  • Nestlé LACTOGROW

Foods

  • Masala Noodles
  • Nutrilicious
  • Fusian
  • Cuppa
  • Sauces
  • Pazzta

Cooking Aids

  • MAGGI Masala-ae-Magic
  • MAGGI Magic Cubes Vegetarian Masala
  • MAGGI Masala-ae-Magic South Veg Masala
  • MAGGI Bhuna Masala for Gravy Dishes, Dals & Vegetables
  • MAGGI Bhuna Masala for Korma Dishes
  • MAGGI Bhuna Masala for Makhani Dishes
  • MAGGI Coconut Milk Powder

Vending and Food Services

  • Nestlé Professional

Imports

  • NESTLÉ KIT KAT CHUNKY
  • FOX’s

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Business Overview

The company worked closely with employees, local communities and business partners to navigate through the unprecedented times, reduced manufacturing complexities which arose as a result of the lockdown and made available its products to consumers with speed and agility. 4

The company stood by nearly 100,000 dairy farmers in these difficult times and bought every drop of milk which was offered by them. The company continued to work closely with its 3,500 coffee farmers, 1,250 spice growers and extended its support to numerous farmers in Karnataka by sourcing substantial quantity of tomatoes from them through its suppliers to reduce distress.

Despite a challenging environment, the company delivered robust growth across all its categories, largely driven by volume and mix-led growth. NESCAFÉ, KITKAT, EVERYDAY, MAGGI noodles, MASALA-Ae-MAGIC outperformed and continued to be significant growth drivers. The company delivered strong performance in the e-commerce channel, due to rise in in-home consumption. During the rapidly evolving times, the company continued with its innovation and renovation journey to meet consumer needs and seven out of the eight Nestlé brands held number one position, according to Nielsen data. With a strong thrust on innovation, the company launched more than 80 new products in the last 5 years and has been consistently present across 7935 urban towns in last 5 years.

The company is proposing to invest Rs 26 Billion over the next three to four years to augment its existing manufacturing capacities, as well as towards its new under construction ‘state of the art’ factory in Sanand, Gujarat, which demonstrates the company’s commitment to India.

Innovating and Renovating Prepared Dishes and Cooking Aids

MAGGI registered strong growth across its brands, that strengthened its position as the industry leader. MAGGI noodles responded to consumers experimenting during in-home indulgence and launched new flavours such as Yummy Capsica and Chatpata Tomato and renovated Desi Cheesey.

The company also launched MAGGI Atta Spinach noodles for consumers seeking both taste and nutritional benefits. MAGGI Sauces registered double-digit growth and MAGGI Upma and Poha scaled up in volume and delivered strong presence in the Ready-to-Eat segment. As there was an increased need for cooking aids during and post-lockdown, the company launched MAGGI Fried Rice Masala with two spice mixes - Classic Veg and Chilli Garlic fried rice, and MAGGI Paneer-aeMagic Shahi Paneer and Kadhai Paneer Masala mix.

To strengthen the consumers trust, the company created QR code enabled anti-counterfeit solution for MAGGI Masala-ae-Magic to ensure the authenticity of the pack.

The company launched ‘MAGGI – Cooking Made Simple’, a service that makes every-day cooking simple, convenient and enjoyable for everybody. This service brings popular recipes from across the country, under three areas of ‘made easy’, ‘made with a twist’ and ‘made healthier’.

The company believes in the power of food to enhance lives, improve livelihoods and protect the planet for future generations. The company launched,‘MAGGI - DESH KE LIYE 2 MINUTE – Ek Chhoti Si Koshish’, an initiative aimed at inspiring people to take small steps to bring about change. Centered around 3S - Swasthya, Swachhta and Sahayata, MAGGI collaborated with communities in a purposeful way, provided 1 Million meals to disadvantaged sections of the society, supported street food vendors to come out of these challenging times, inspired the youth to connect with agriculture and supported 10,000 home chefs to start their own food business.

Building Breakfast Cereals

The company launched KOKO KRUNCH, a global cereal brand in 2020, and NESPLUS was renovated with new packaging.

The business displayed agility and embraced the shift in channel dynamics because of COVID-19. Focus on e-commerce delivered growth. Single serve SKUs helped drive penetration and trials among consumers.

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Strengthening of Milk products and Nutrition Portfolio

The Milk Product and Nutrition business continued to deliver good performance despite disruptions caused by COVID-19 and challenges linked to commodity price fluctuation. The company mitigated some of these challenges by identifying and implementing efficiency improvements across the value chain.

The company continued to support over 100,000 Dairy farmers during the pandemic by buying every litre of milk offered to the company, providing uninterrupted timely payments and ensuring COVID-19 related precautions are followed during milk collection.

The company distributed over 6 Million serves of dairy products as a part of ‘Care Packs’ to frontline COVID warriors. The company also pioneered the purpose-driven campaign by distributing sweet dish made from MILKMAID to over 10,000 families during Kerala’s Onam festival.

The company’s Healthcare Nutrition Business, Nestlé Health Science, has a portfolio of science based medical and consumer healthcare nutrition products. In 2020, the company continued to consolidate its portfolio that delivered growth.

Introduction of smaller 200g SKUs of RESOURCE HIGH PROTEIN and RESOURCE DIABETIC in key channels, helped increase consumer access. With continued endeavors to renovate and innovate, the company also expanded its offerings in the weight management category by launching OPTIFAST vanilla flavor variant.

Growing Coffee and Beverages Business

The company continued to focus on growing Coffee and Beverages business and remain relevant to consumers, despite the challenges posed by COVID-19. Remaining consistent to the successful strategy over last few years, NESCAFÉ led the journey of building the coffee consumption category throughout the year. This reflected in strong brand growth and resulted in significant market share gains. The company continued its journey of building relevance and strong connection with consumers with the NESCAFÉ Classic new campaign, ’Karne se hi hona hai’ The campaign was anchored in hope and action to inspire consumers to restart lives in the new normal.

NESCAFÉ SUNRISE moved ahead in its journey of driving a differentiated brand in the core coffee market in the southern part of India. Along with brand building initiatives, it activated sampling coffee to frontline warriors to extend support in the difficult times.

NESCAFÉ accelerated its premiumization journey, building on the promise of delivering coffee at its best with NESCAFÉ Gold. As more and more people stayed indoors, there was a need for in-home indulgences. With exciting coffee recipes and product solutions, NESCAFÉ Gold helped consumers create a café like experience at home, resulting in strong growth.

Nestlé Professional - Out-of-Home Business

Despite the pandemic, the company continued to build its portfolio through the launch of innovative products and solutions. In response to hygiene concerns post the pandemic, the company led the launch of contactless beverage solutions in the industry. Continuing with the objective to premiumize the beverages business portfolio, Roast & Ground (R&G) coffee was developed and launched. This was accompanied by the development of an R&G beverage solution which opens-up an additional market for such solutions.

Since the dependence on food delivery due to the pandemic had increased, the company introduced a service and product platform to expand its role in the delivery ecosystem. The company introduced 100+ quick and easy recipes for menu partnerships with restaurants, based on top-sellers and limited pantry support. The company also introduced a food solutions portfolio customized for delivery applications like rice seasonings (Oriental) and pasta sauce mixes (Italian) that are operator friendly and cost effective.

The company took an important initiative to scale up the kiosk business through ‘Entrepreneurship for Youth’ which aims to create livelihood and job opportunities for people through their kiosk business model, helping the youth of the country cope with these unprecedented times. The kiosks are run on a youth-facing, franchisee-operated business model, offering unique entrepreneurial opportunities to generate sustainable business, decent employment and respectable livelihoods for the franchise owners.

Financial Highlights

Total Sales and Domestic Sales for the year ended 31, December 2020; increased by 8.1% and 8.5% respectively. Domestic Sales growth is largely driven by volume & mix and is broad based. Demand in Out-of-Home channel was impacted throughout the year due to COVID-19 pandemic. Export Sales growth at 1.4% impacted by lower coffee exports.

Other Income has decreased due to lower yields and lower average liquidities.

The company has created a contingency provision of Rs 1,088.9 Million (previous year Rs 1,163.4 Million) for various contingencies resulting mainly from matters, which are under litigation / related to disputes and other uncertainties requiring management judgement. The company has also reversed, utilized / settled contingency provision of Rs 580.2 Million (previous year Rs 914.6 Million) due to satisfactory settlement of certain litigations and settlement of obligations under free replacement warranty for which provision is no longer required.

The Board of Directors have recommended a final dividend of Rs 65.00 per equity share amounting to Rs 6,267 Million for the year 2020. The total dividend for 2020 aggregates to Rs 200 per equity share which includes interim dividend of Rs 135.00 per equity share paid on 20th November 2020.

Exports

In 2020, the exports of the company registered 4.8% volume growth, driven by categories such as Prepared Dishes and Cooking Aids, Milk Products and Nutrition. The company’s continued focus on MAGGI range extension and channel proliferation brought growth across international markets.

The company recorded highest ever exports of MAGGI noodles and sauces to the United States, Canada, United Kingdom, European Union, Australia and New Zealand, despite disruptions in supply chain, caused as a result of COVID-19. Categories such as Coffee and Beverages were negatively impacted by supply chain disruptions, lower coffee exports to Turkey and drop in Out-of-Home consumption

Nestlé India – Q2, 2021

28 July 2021; The Board of Directors of Nestlé India today approved the results for the second quarter of 2021. 5

Key Highlights

  • Total Sales of INR 3,462 Crore
  • Total Sales Growth at 13.8%. Domestic Sales Growth at 13.7%.
  • Profit from Operations at 22.2% of Sales
  • Net Profit of INR 539 Crore
  • Earnings Per Share of INR 55.86
  • Domestic & Export Sales achieved double digit growth largely driven by volume & mix.
  • Key products MAGGI Noodles, KITKAT, Nestlé MUNCH, MAGGI Sauces, MAGGI MASALAAE-MAGIC posted strong double-digit growth.
  • Strong performance in E-Commerce channels, grew by 105% and contributed 6.4% of domestic sales.
  • In recent times, commodity prices have been rising across oils and packaging materials.

Commenting on the results, Mr. Suresh Narayanan, Chairman and Managing Director, Nestlé India said, “The needs of the community and supporting its people always take precedence over everything else in a crisis. Those are the values and the purpose that has defined it, which the company take pride in and cherish. At the same time, as a leading food and beverage company, ensuring supplies of much needed products to consumers is the call of duty that unites all of it at Nestlé India!

Despite the enormous challenges during the devastating second wave of the pandemic in this quarter, I am immensely proud of the resolve of my team and its partners. An unwavering determination, empathetic teamwork, singular commitment and resolute focus ensured that much needed food and beverage products were available to its consumers. A simple, yet innovative example of this wasthe timely implementation of a ‘telecaller model’ to take orders across trade channels. The company's front-line sales colleagues stood tall to overcome serious logistical obstacles and ensure availability. The company's efforts to ensure last mile access were aided by e-commerce and in particular hyperlocal (quick commerce) channels which grew by 147% in the first half of this year.

Last year, its commitment to India made it articulate an ambition to invest INR 2,600 Crore (INR 26 Billion) over a 3-4-year period. I am pleased to announce that out of this, Nestle India has already invested about INR 1,000 Crore (INR 10 billion) thus far. This is a vindication of its confidence and trust in the Nestlé journey in India.

In moments of crisis like this pandemic, its strong values and purpose ensure that the company never lose sight of the well-being of society at large, by being a “Force for Good”. Nestle India has continued to offer employment opportunities, developmental vistas for talent and have welcomed over 1,000 people through regular hiring, apprenticeship and internship into the Nestlé India family during the first half of this year. Generating employment is vital for the nation and Nestle India is trying to play its part towards this.

At the same time, providing succour to distressed and less fortunate sections of its society is also a calling the company heed. The company contributed about INR 15 Crore (INR 150 Million) towards CSR spends in the areas of nutrition awareness, COVID relief initiatives etc this quarter. Further, its unwavering focus on sustainability continues and Nestle India has invested about INR 25 Crore (INR 250 Million) in a range of projects in the first half of the year. ‘’

Total Sales and Domestic Sales for the quarter increased by 13.8% and 13.7% respectively, on a base impacted by COVID 19 induced lockdown with production disruptions across factories. Domestic Sales growth was driven by volume & mix. Export Sales increased by 17.7% due to timing of exports to affiliates.

References

  1. ^ https://www.nestle.in/aboutus
  2. ^ https://www.nestle.in/aboutus/presenceacrossindia
  3. ^ https://www.nestle.in/brands
  4. ^ https://www.nestle.in/sites/g/files/pydnoa451/files/2021-04/Nestle-India-Annual-Report-2020.pdf
  5. ^ https://www.nestle.in/sites/g/files/pydnoa451/files/2021-07/Financial-Press-Release-Q2-2021.pdf
Tags: IN:NESTLEIND
Created by Asif Farooqui on 2021/07/30 05:45
     

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