As more consumers spend time commuting, travelling, and socialising, Nestlé India is ramping up its portfolio of ready-to-consume products, including cold coffee, snack bars, and other impulse offerings, to capture the growing demand, the fast-moving consumer goods (FMCG) company said in its annual report.
The move marks a strategic shift for the FMCG major, which was once known primarily as the Maggi noodles company.
"We were once seen as an urban company with a limited portfolio, but through penetration-led volume growth strategy rolled out in 2015, we now have access to more households and more consumption occasions," chairman and managing director Suresh Narayanan wrote in a letter to shareholders.
"In 2015, many considered us to be solely a Maggi noodles company. Since then, we recalibrated and rejuvenated the portfolio launching over 150+ new products that have contributed to 7% of sales," he added.
OOH business
The KitKat and Nescafé maker reported strong double-digit growth in its out-of-home business for FY25, helping India emerge as the second-largest market for this vertical by revenue in the Asia, Oceania, and Africa zone.
Nestlé’s strategy dovetails neatly with the post-Covid surge in OOH consumption, which saw a staggering 44 percent jump in spending, according to a Kantar market report. In 2024, rising disposable incomes and rapid urbanisation fuelled demand for salty snacks, non-alcoholic beverages and biscuits.
"The out-of-home consumption segment presents significant growth potential, driven by shifting lifestyles, increased urbanisation, and evolving consumer habits. As people spend increasingly more time outside their homes— whether commuting, socialising, or travelling—demand for convenient, high-quality food and beverage options continues to expand. Your company is well-positioned to capitalise on these opportunities....," Nestle said.
Its offerings in this segment span across ready-to-drink beverages like Nescafé cold coffee, impulse snacks such as KitKat and Munch, and convenient meal solutions like Maggi cup noodles and hot bowls. Through its Nestlé Professional arm, the company also provides vending solutions and customised products for the food service industry, including cafés, restaurants, and offices.
GenZ focus
Meanwhile, in a bid to tap Gen Z consumers, Nestlé also opened its first Nespresso boutique in Delhi in March, bringing its global direct-to-consumer model to Indian shores. The boutique is part of its Swiss parent's global premiumisation strategy, aimed at bringing its upscale coffee experience to affluent, urban Indian consumers through its Nespresso brand.
"In the last 10 years, the out-of-home business moved from just being a ‘coffee vending business’ to a vibrant and powerful portfolio business," said Narayanan. "The portfolio has been transformed with premiumisation in beverages and foods, robust customer acquisition and geographical expansion beyond metros and mega cities," he added.
The comments come as Nestlé’s capital expenditure has surged fivefold in less than the last decade, rising from 1.8 percent of sales in 2015 to 10 percent in FY25, reflecting the company's aggressive investment push. It has planned additional facilities in Gujarat and Odisha.
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