Nestle plans to diversify into premium coffee, pet care, cereals

The Dollar Business Bureau

FMCG major Nestle is eyeing to diversify its offering into new categories such as pet care, cereals, skin health and premium coffee business. The company is also looking to consolidate its product portfolio and including new categories in order keep the two-digit growth.

“There are so many categories in which we are not in. We don’t have a premium coffee business. Expresso and Dolce Gusto is not here. Our pet care is not here. Cereals is not here, in healthcare we are here but it’s very small. Skin health we are here but its relatively very small. These are potentially the businesses,” said Suresh Narayanan, CMD, Nestle India.

As part of its diversification strategy, the company has introduced 35 products over the past 6 months and may also remove a few products that are not doing well in the market.

Nestle, now the owner of skincare Galderma brand, is looking to become a leading player in this category.

“In India, the company has relatively little presence and we are also planning to enhance the portfolio,” Narayanan said, while adding that these products are going to be more specialised.

Earlier, Galderma was a joint venture between LOreal and Nestle and after few years it bought stakes in the French cosmetics firm to make Nestle Skin Health.

“In the healthcare segment, we have a broad range worldwide and in India, we have only one product that is used in post-operative care. However, there is an entire range,” he said.

Nestle is also planning to expand its offerings in the snacking segment under its Maggi brand.

In 2016, the contribution of Maggi in Nestle’s overall sales was 25%, which fell from 30% in the pre-banned period. Maggi noodles was banned in 2015 on the charges of having high lead content and MSG in snacks which impacted the sales of the company. Chocolate sales of the company contributed around 15% last year.

In 2016, the net sales of Nestle increased by 12.75% to Rs.9,159.28 crore compared to Rs.8,123.27 crore a year ago.