The Swiss food and beverage giant says the planned investment will be its largest ever in the Indian market and follows strong demand for key products, including its portfolio of coffee brands
Nestlé sells a range of retailed Nescafé products in India, including the Nescafé Classic, Gold and Sunrise blends | Photo credit: Nestlé
Swiss food and beverage giant Nestlé plans to invest Rs 5,000 Cr ($613m) in India by 2025 to capitalise on growth opportunities for its products in the country.
Nestlé CEO Mark Schneider said ‘accelerated investment plans’ will enable the expansion of its product portfolio, the establishment of new production facilities, brand enhancement and potential new acquisitions.
The funding will benefit all of Nestlé’s product categories in the country, including coffee. Nestlé sells a range of retailed Nescafé products in India, including the Nescafé Classic, Gold and Sunrise blends. It also manufactures and distributes the É by Nescafé app-enabled coffee maker.
“I think India is in a very advantageous position. Of course, there are inflation concerns, but you see such a strong underlying volume demand from a rising middle class and due to growing income levels. That overpowers some of the concerns that may come from inflation. Overall, as a company, we’re very committed to responsible pricing and keeping products affordable for all strata of society. But I think India is less touched than many other large markets, because of the strong groundswell of economic growth that we’re seeing,” said Schneider.
Nestlé India achieved revenues of Rs 14,709 Cr ($1.8bn) in 2021. The division currently operates nine manufacturing plants in the country, employing approximately 6,000 people.
The investment marks Nestlé’s largest investment in India since it began manufacturing operations in the country in 1961.
In July 2022, Nestlé reported ‘broad-based double-digit growth’ in the South Asian market for the first six months of 2022, which it accredited to distribution expansion and increased brand equity. Growth in India was noted across most categories, including Nescafé and Nestlé Professional.
India represents an opportune growth market for Nestlé, especially in the instant coffee category. The product was a strong contributor to competitor Tata Coffee’s first quarter revenues, which the Indian company reported as increasing 24% during the period.
Bangalore-based Tata Coffee, which operates retail packaged coffee brands Eight O'Clock Coffee, Tata Coffee Grand and Sonnets by Tata Coffee, reported revenues of Rs 6.7bn ($83.6m) for the quarter ended 30 June 2022, compared to Rs 5.4bn ($67.5m) for the same period in 2021.