The slowdown in the rural sales faced by most domestic fast moving consumer companies (FMCG) has not majorly impacted FMCG major Nestle India as it has a lower exposure to the rural segment, said Suresh Narayanan, Chairman and Managing Director, Nestle India.
"As far as Nestle is concerned, we have managed to show volume led growth in the last 8 quarters that is a combination of lower rural footprint compared to other companies. Only 20-25 percent of Nestle's sales comes from rural and rest comes from urban," Narayanan said on the sidelines of CII National FMCG Summit held in Mumbai on December 18.
He further added that Nestle India has witnessed strong growth from Tier II and Tier III towns.
Rural growth has gone below urban growth for the first time, which is creating stress points for companies that had a larger footprint in terms of rural sales and the ones that have a strong portfolio in the rural market.
Narayanan pointed out that steps taken by government may help revive sales in rural segment.
"In terms of our performance it has been fairly steady. I have not seen any kind of trend shift that has taken place but I do hope that some of the steps that government is taking will lead to more money in to the hands of the people and that will translate in to more sales," Narayanan said.
He added that if prices of commodities such as milk go up, then Nestle might be ‘forced’ to raise the prices of products that have milk as their main ingredient.
Apart from selling milk in tetra pack, Nestle also sells ready-made cold coffee Nescafe, curd and yogurt, items that have milk as the main ingredient.
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