For Nestle, India a great flavour to bet on for the future!

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For Nestle, India a great flavour to bet on for the future!

Nestle says India remains an important and attractive market and as it expands its India footprint, the focus will be on coffee, dairy & confectionary and noodles, reports CNBC-TV18's Sunanda Jayaseelan.

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Excerpts from India Business Hour on CNBC-TV18 Watch the full show » Nestle BSE | NSE 30/05/12 Are Mutual Funds betting on Nestle?

Despite high inflation and rising raw material prices, global nutrition major Nestle says India remains an important and attractive market and as it expands its India footprint, the focus will be on coffee, dairy & confectionary and noodles, reports CNBC-TV18's Sunanda Jayaseelan.

Nestle, which owns the Nescafe brand, wants more Indians to wake up to their coffee every morning. Its biggest hurdle is not stiff competition, but the fact that though India is the world's fifth largest producer of coffee, domestic consumption is very low.
 
To right this imbalance, it has started at the grass-roots level, literally. Through initiatives in coffee-growing areas like Coorg in Karnataka it works with farmers on aspects like coffee farming, production and eventually consumption.

Nandu Nandkishore, executive vice president, Nestle, says, "We do this in several of the global markets where we are present and now we have started it in India as well. We will look at other regions in India to implement our Nescafe plan also."

This increased focus on India is not surprising, after all, emerging markets, including India make up 38% of the groups overall revenues. And these emerging markets have shown double digit growth.

Nestle has already invested close to USD 1.5 billion in emerging markets to expand capacity over the last one year. It now says that India will get a lot more money in the years to come.

Nandkishore says they have communicated that they will invest USD 500 million for three years until 2012 towards capacity expansion.

Coffee is not Nestle's only focus area. It plans to introduce India to some of its more popular products - like in the ready-to-eat category or its coffee machine system that will dispense gourmet coffees to coffee-lovers.