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Instant food: Maggi helps Nestle India post strong sales in Q1

According to a survey conducted by Nielsen India, around 22 percent consumers found ready-to-eat meals out of stock.

May 14, 2020 / 03:02 PM IST
Nestle products (Image: Reuters)

Nestle products (Image: Reuters)

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Nestle India continued its strong growth despite the disruption caused by COVID-19. The robust performance was aided by strong sales of Maggi, Kitkat and Munch.

“Maggi, Kitkat and Nestlé Munch delivered strong performances. Commodity prices for milk and its derivates continued to be on the rise during the quarter,” Suresh Narayanan, Chairman and Managing Director, Nestlé India said.

Brokerages said that Nestle’s portfolio was more resilient to the lockdown impact and less affected when compared to peers.

Nestle surprised positively with a resilient 11 percent sales growth, 14 percent ahead of estimates indicating lower impact of lockdown on supply chain and likely benefits from consumer upstocking, Emkay said in its earnings review report.

Nestle India reported a 13.5 percent year-on-year growth in March quarter profit at Rs 525.43 crore.

“Pantry loading supported packaged food business despite lockdown impact (Marico’s Saffola posted 25 percent growth). Brands such as Maggi, Kitkat and Munch continued to drive growth for Nestle even as out of home consumption slumped,” HDFC Securities said.

The COVID-19 outbreak has given a boost to products in the ready-to-cook meals category and companies selling them made most of it.

Noodles have always been in great demand and now with the lockdown being extended twice noodle makers were assuring consumers of availability of products after a shortage was witnessed last month.

Maggi was among the first ones to fly off the shelves at super markets immediately after the lockdown was first announced in March.

According to a survey conducted by Nielsen India, around 22 percent consumers found ready-to-eat meals out of stock.

In the absence of Maggi, the growing demand of noodles was capitalised by brands such as Wai Wai, Top Ramen and Knorr.

The company refrained from sharing the market share of Maggi in the noodle segment but analysts say it holds almost close to 50 percent share.

Despite that, the 'milk and nutrition’ category contributes a higher share in Nestle India’s portfolio followed by Maggi noodles.

“We will continue to adapt quickly to changing consumer needs and to challenges across the supply chain,” Narayanan said.

Going ahead, brokerages said the second quarter of CY20 is likely to be weaker as per channel checks with a larger impact of lockdown and supply chain disruption.

Himadri Buch
first published: May 14, 2020 03:02 pm

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