Nestle India

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Economic Analysis

FMGC Sector

About Company

Nestle India is a wholly-owned subsidiary of Nestle (Swiss Multi-National Company).

 

• In 1961, Nestle India started their first manufacturing factor in Moga, Punjab. 
• India has been in a relationship with Nestle (The parent company of Nestle India) back from 1912 - Trading as " The Nestle Anglo-Swiss Condensed Milk Company Export Ltd ". 
• The Indian Government wanted Nestle to make/Develop the Milk Economy. 
• Nestle has been a partner in India's growth for over a century.

For over 150 years, Nestle has been applying our expertise in Nutrition, Wellness & Health to help people & pets live happier, healthier lives.

Nestle produces more new products because-What is good today will not be good enough tomorrow.  That’s why Nestle constantly explores & aim to push the boundaries of what is possible with Foods, Beverages, & Nutritional health solution.

After more than 100 years old in India, Nestle India has existence across India with Eight Manufacturing Factories & Four Branch offices - 

 

Nestle India set up its 9th Factory in Sanand, Gujarat & also commissioned a new KITKAT line in its Ponda factory in Goa in 2021.

• Nestle India Head Office have located in Gurgaon (Haryana).
• Four Branch offices are in Delhi, Mumbai, Chennai, and Kolkata. 

Nestle India continuously focuses on its efforts to understand the changing lifestyle of India & also predict the consumer needs to supply Nutrition, Taste, and Health through its innovative products.

Nestle has more than 2000 Brands & present in 186 countries.

Internationally Famous Brands are :

• Nescafe
• Maggi
• Milky Bar
• Kit Kat
• Barone
• Milk Maid
• Polo
• LactoGrow
• Milo
• Everyday Milk Powder
• Cerelac
• Munch Nuts
• Nestle Ice Cream
• Perrier
• Coffee-Mate
• Gerber
• Nestle Milk (Silk Milk)

 

Nestle's ambition is to be the worlds leading Nutrition, Health, and Wellness Company.

Products :

Nestle India has 5 segments of products. In  Eight Manufacturing Factories in India, they are manufacturing - 

• Powdered and Liquid Beverages

• Milk products and Ice cream

• Nutrition and Health Science

• Prepared dishes and cooking aids

• Confectionery

⇨ Sales Trend of  These Segments -

• The highest contributing Segment is Milk Products & Nutrition - 43 %
• The second Highest contribution Segment is Prepared Dishes & cooking aids - 31%
• The third Highest contribution Segment is  Confectionery - 15%
• The least contribution Segment is Powered & Liquid Beverages - 12%.

YOY CAGR of Sales:

• Milk products & Nutrition - 2%
• Prepared dishes and cooking aids - 16%
• Powdered and Liquid Beverages - 15%
• Confectionery - 21%

⇨ Famous Products Across India - 

⇨ Market Share of Nestle Products in India -

More than 50% of market share products are the Market leaders in the Indian Market.

• Nestle launched more than 90 products from 2016 to 2021.
• MAGGI Tomato Ketchup was ranked No. 1 by ‘Consumer Voice’ (A Government of India Supported Initiative), establishing consumer trust in the sauce segment. 

⇨ New Products Launched : (As of 2021)

• MAGGI Special Chicken65 Masala Noodles

With the surge in consumers searching for how to cook everyday meals, MAGGI’s website carrying recipes attracted 1.5 million users.

• Nestlé GOLD Corn and Oat flakes

Nestlé GOLD Corn and Oat flakes are fortified with Immuno nutrients such as zinc, iron and selenium. KOKO KRUNCH was renovated with improved taste and an increase in whole grains.

• KOKO KRUNCH Kookie cereal

KOKO KRUNCH Kookie cereal has choco chips embedded in the cereal and tastes like a cookie.

• Nestlé MUNCH FRUIT O NUTS

Nestlé MUNCH FRUIT O NUTS, a unique combination of flavour and texture, where crunchy almonds combined with the fruity taste of pomegranate are wrapped around a crunchy wafer centre.

 

Management Analysis

The Board of Directors of Nestlé India Limited - 

Mr Suresh Narayanan  (Chairman & Managing Director) :

Suresh Narayana was appointed as MD of Nestle India in 2015 (during the Maggi crisis). Mr Suresh Narayanan holds a Master’s Degree in Economics from the Delhi School of Economics. He has a Diploma from the IMD Program for Executive Development and has participated in the Nestlé Leadership Program of the London Business School. He has over 30 years of rich and exhaustive experience in the FMCG Industry and has held senior management and top leadership roles in leading global companies. Narayanan joined Nestlé in 1999 as Executive Vice President for Sales in India.

To know more about the Board of directors visit nestleindia.com.

Initiatives Taken by Management :

• To ensure sustainable logistics across the value chain, Nestle India focused on alternative modes of transportation such as railways/ waterways and optimizing vehicle fill rate. It introduced 4 waterways in 2021 to strengthen sustainable logistics. 
• Nestle India increased usage of bigger size vehicles from 5.9% in 2019 to 9.8% in 2021, increased usage of railways from 0% in 2019 to 8.2% in 2021 and increased vehicle payload utilization from 90.3% in 2019 to 92.5% in 2021.
• In 2021, Nestle India continued to focus on premiumizing the beverage portfolio, through the scale-up of NESCAFÉ Roasted Whole Bean coffee and bean-to-cup solution. Despite the challenges thrown by the lockdown in the second wave of the COVID-19 pandemic, the coffee solution displayed strong customer acceptance.
• E-commerce made Nestle products accessible at the point of purchase, providing differentiated offerings to consumers through special and innovative product propositions through targeted digital communication for brands such as MAGGI, NESCAFÉ, KITKAT, CEREGROW, NANGROW, MILKMAID, RESOURCE HIGH PROTEIN.
• Nestle India has sustainability as part of its DNA. The focus continued improving operational efficiencies by reducing consumption of natural resources and reduction in energy and GHG emissions. From 2006 to 2021, for every ton of production, Nestle India reduced the usage of energy by around 43%, water usage by around 52%, generation of wastewater by around 67% and specific direct GHG emissions by 57%.
• Nestle India's key renewable energy projects contributed to GHG savings. This was implemented through the higher purchase of solar power for the Choladi factory and Nanjangud factory and the replacement of fossil fuel with clean fuel for steam generation at the Bicholim factory.
• Nestle India will be annually eliminating 30 million plastic straws. These paper straws are responsibly sourced from renewable sources and certified by the Forest Stewardship Council (FSC). 
• In 2021, Nestle India achieved an EPR of 23,600 MT tones through plastic waste management.
• Nestlé MILO and Royal Challengers Bangalore joined hands during the Indian Premier League season to bat for the planet, with the launch of paper straws for the MILO beverage packs. Your Company responsibly sourced paper straws from renewable sources and is certified by the Forest Stewardship Council (FSC). This transition into paper straws has also been made for NESCAFÉ.

Risk:

• Supply chain challenges :

 The worldwide supply chain continues to be affected by challenges relating to the COVID-19 pandemic, including delays and disruption. Organizations need to reimagine and manage their supply chains differently to ensure business continuity and growth for the future and provide new solutions for customers to access products and services.

• Digital vulnerabilities : 

There has been a growing dependency on digital systems which has been intensified during COVID19, with increased usage of digital tools and digital payments, adoption of platforms and devices that allow sensitive data to be shared with third parties - cloud service providers, data aggregators, application programming interfaces and other technology-related intermediaries. Additionally, there has been an increase in cybersecurity threats such as malware and ransomware attacks, misinformation and fraud creating cyber risks for the business.

• Climate changes :

The economic crisis created by the COVID-19 pandemic could further delay efforts to tackle climate change. Complete climate inaction could lead to losses projected at 18% of global GDP, with different impacts across regions (Swiss Re Institute). Consequences may be irreversible for the environment, humankind, and economic activity

 

Opportunities

The Indian food processing industry has tremendous growth potential. Rural areas and Tier 2 and 3 cities are expected to continue driving the demand for processed food.

 

• investing in Innovation :

Food companies need to continue to leverage their in-depth knowledge of food habits, nutrition, quality and safety to innovate and renovate and adapt to this new normal. They must respond to new demands, reset defining relationships with consumers and reconsider their product portfolio in the post-COVID era to make products healthier, and allow consumers to make informed choices.

• Buttressing E-commerce to fuel growth : 

E-commerce had an increasing impact on the FMCG industry globally during the pandemic as consumers increased their online shopping. As COVID-19 changed consumer habits, FMCG firms saw a surge in the contribution of e-commerce to their overall sales during COVID waves, and stabilization at higher levels as waves receded.

• Enhancing digital-first with a human touch :

Consumers have become more digitally active. According to McKinsey, the COVID-19 pandemic has fundamentally changed the pace of business, and the companies with superior technology capabilities had a significant advantage. To meet new demands, companies are making digital, and technology investments, across the business model. To enhance the digital experience of the future and enable it to blend with the physical experience, businesses will have to focus on making the consumer experience more authentic, and more human. This would mean bringing elements of tactile experience (touch, see, feel, smell, taste) as well as making digital interactions more authentic by including multilingual capabilities for wider customer reach and acceptance.

• Accelerating sustainability and committing to the planet :

Addressing climate change will require a multi-stakeholder approach to collaborate and monitor progress, laying the foundation for a better world. This includes regenerative agriculture practices, a transition to 100% renewable electricity, as well as reformulating products to make them more sustainable. There is a need for accelerating actions toward reducing greenhouse gas emissions, creating more recyclable or reusable packaging products.

Financial Analysis

Nestle India Last 10 years Performance :

• Nestle India Sales have grown by a CAGR of 6% for 10 years & CAGR of 4% for 5 years.

Profit & Loss Statements

Quarterly Results

Balance Sheet Statement

 Cash Flow Statement

Financial Ratios

Discounted Cash Flow Model :

Shareholding Pattern :

>To download a file of financial Analysis (Excel File)

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