2023 can be a better year if current trends hold: Nestle India CMD

Nestle India's CMD Suresh Narayanan

Nestle India Chairman and Managing Director Suresh Narayanan expects 2023 to be a better year, provided the recent inflation trends hold.

“Milk, wheat and a few other commodities are showing very firm trends,” Narayanan told CNBC-TV18. “In terms of inflation, I hope the worst is behind us, however, it would be premature to prognosticate if it would be an easier year,” he said while speaking to CNBC-TV18.

Food prices spiked and continue to be high in most parts of the world as Covid-led disruptions were worsened by the Russia-Ukraine war. The two countries are among the leading producers of wheat and edible oils in the world. Prices though have begun to ease a bit in recent weeks.

“If some of the trends that are there today continue, then hopefully it will be a better year as compared to the rather unprecedented levels of food inflation that we had in 2022.”

Speaking about the company’s rural footprint, Narayanan said in the last couple of quarters, the company expanded its infrastructure and distribution.

“We are seeing encouraging results. However, I reiterate that the rural footprint for Nestle India is relatively lower as compared to many companies,” he said.

Nestle CMD highlighted that the company was testing a direct-to-consumer (D2C) platform in Delhi-NCR, which was more of a consumer experience and service platform and not a large revenue generator.

“We have fairly strong brands of our own that are relevant for our target consumers and that's how we will approach it for now,” he said.

The fast-moving consumer goods giant, which commands a market capitalisation of over Rs 1,94,000 crores, saw the highest sales growth in the last five years during the July- September quarter of FY23.

Its profit for the quarter was up 8.25 percent to Rs 668.34 crore and sales at Rs 4,591 crore, up 18.24 percent.

In September, Mark Schneider, chief executive officer, Nestle SA, announced that the Swiss processed foods maker would invest Rs 5,000 crore by 2025 in India. The investment comes two years after Nestle India announced an investment of Rs 2,600 crore.

The company has also announced a green field project for ramping up the production of two of its most popular products—Maggi instant noodles and Kitkat, which are market leaders in their respective categories.