A YEAR AFTER THE MAGGI CRISIS, NESTLE GOES ON A PRODUCT OFFENSIVE WITH 25 LAUNCHES
Having 'weathered' the Maggi storm, Nestle India is embarkin on a product offensive, launching up to 25 products across various categories to fend off 'disruptive competition' from new rivals like Patanjali. The company, which now claims 55.5 per cent share in the instant noodles market, however, says financially it could take a few more quarters to fully overcome the Rs 500-crore hit it took because of the ban on Maggi last year. "We have weathered the storm, although we still have two cases pending in the court. Now it is the time to ride the wave," Nestle India Chairman and Managing Director Suresh Narayanan told. For this Nestle India is focusing on rejuvenation of existing brands, adding new products and entering into new categories targeting a wide range of consumer segment from babies, to youth to women and adults in urban markets. Elaborating on the company's new product launch programme, Narayanan said: "There are about 20-25 product launches, some of them have happened, some are happening and some will happen in four to six weeks time. This is probably the single largest window of new product launches in a long time." The new products include seven variants of Maggi noodles, Greek yogurt brand 'Grekyo' and protein growth brand 'Pro-Gro' in dairy segment, besides multiple products in chocolate and confectionery, as also new offerings in coffee and tea. "We are trying to look at product concepts that are differentiators. The launches are multi-targeted in terms of consumer base that we are looking at," he said. Stating that the company has also shortened the time for launching new products to 4-6 months from 12-15 months earlier to keep pace with the changing dynamics in the market, Narayanan said: "Today the urban Indian consumers are changing quite rapidly, their tastes are changing." When asked about competition from Baba Ramdev's Patanjali Ayurved, Narayanan said: "That is the kind of competition we would positively call disruptive competition. They come and redefine the rules of the game...I have said that script for the future will be written by redefining the rules of the past." Asked whether Maggi has been able to reach the pre-ban levels, he said, "Today we have 55.5 per cent market share compared to 77 per cent before withdrawal. Our hope and effort is to get back to where we were." The instant noodles market in India is estimated to be Rs 2,000 crore with ITC's Yippee, Nepal-based Chaudhary group's Wai Wai and
Patanjali Noodles among major players besides Maggi. Narayanan declined to share an exact timeline when Nestle India will fully overcome the financial hit due to Maggi ban. "That impact of Rs 500 crore was quite significant in our books. As our sales evolve, and growth starts to come back it is fair to say that we will recoup that ground...We are improving sequentially quarter to quarter," he said. Nestle India is also considering to expand health and nutrition products offering in the domestic market, leveraging on its parent's global portfolio. The company, which currently sells two proprietary products in the category, said it is waiting for regulatory clarity on foods for special medical purposes before it launches more such items in India. "We have Nestle Health Science business, which is nascent in the country. Globally, Nestle is looking at Health Sciences in a big way. The new frontier is not just medicines but food," Narayanan said. Giving an example of how Nestle is focusing on health and nutrition products, he said, Nestle Health Science, an arm of the Swiss parent, is developing food for people with Alzheimer's which prolongs the onset of the disease. In India, the company sells two proprietary products 'Resource' and 'Peptamen' through doctors and hospitals. These are specialised products meant to give right kind of metabolic balance and energy, protein and nutrition, he said. When asked if company has planned to bring more products in the category from its global portfolio in India, Narayanan said: "Sure. At present the business is very very small (in India). Growth, here, can be exponential. We are waiting for some of the regulatory framework to be cleared."