Nes­tle turns to choco­late and dairy to re­duce load on Maggi noo­dles

The Pak Banker - - 6BUSINESS -

NEW DELHI: Nes­tle In­dia Ltd, the lo­cal arm of Swiss pack­aged food com­pany, is plan­ning to launch new dairy prod­ucts in the next cou­ple of months as part of its strat­egy to cut de­pen­dence on Maggi in­stant noo­dles that ac­counted for about 30% of its to­tal sales in 2014. In the quar­ter ended 31 De­cem­ber, the com­pany launched two new choco­late prod­ucts.

The plan to di­ver­sify and re­duce de­pen­dence on Maggi sales was spelled out by Suresh Narayanan im­me­di­ately af­ter he came to In­dia as the chair­man and manag­ing di­rec­tor of the com­pany in July last year. At that time, Nes­tle In­dia was caught in a con­tro­versy af­ter In­dia's food reg­u­la­tor Food Safety and Stan­dards Au­thor­ity of In­dia (FSSAI) banned the sale of Maggi on 5 June, cit­ing the pres­ence of flavour en­hancer monosodium glu­ta­mate and ex­cess lead. Nes­tle In­dia could not sell the prod­uct for six months in 2015. "We are aim­ing to ex­pand our prod­uct range with this launch," Nikhil Chand, general man­ager (choco­lates and con­fec­tionery), Nestlé In­dia, said, com­ment­ing on the com­pany's just-launched choco­late KIT KAT Duo.

Over the next few quar­ters, Nes­tle has lined up a few prod­uct launches in dairy, choco­late and con­fec­tionery cat­e­gories.

"The fo­cus will be on adding value to ex­ist­ing prod­ucts and strate­gic new launches," Narayanan said on 10 March, on the side­lines of a pub­lic event or­gan­ised by an in­dus­try lobby group.

Nes­tle re­launched Maggi noo­dles in Novem­ber but is yet to re­gain its mar­ket share. The com­pany has man­aged to cover 7580% of distri­bu­tion and re­sults would be vis­i­ble in the com­ing quar­ters, Narayanan had said. In Jan­uary, Maggi noo­dles had a 42% mar­ket share, as com­pared with 77% a year ago, ac­cord­ing to a re­port in The Eco­nomic Times on 22 Fe­bru­ary that cited Nielsen data. For the year to De­cem­ber (Nestlé In­dia fol­lows a Jan­uary-De­cem­ber ac­count­ing year), net profit fell 52% to Rs.563.27 crore.

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