'Flimsy or poorly thought-out applications of AI can lead to unnecessary job losses'

New Indian Express

28-07-2025

Suresh Narayanan, Chairman and Managing Director of Nestlé India, is set to retire on July 31, bringing to a close nearly a decade at the helm of the company. Mr Narayanan spoke to TNIE about his remarkable journey, the key challenges and milestones during his tenure, and his vision for the future of Nestlé India over the next decade. Excerpt:
Over this 10-year journey at the helm, what were the top three challenges you faced?
I came in during a storm — the MAGGI controversy, which was a major challenge. Then came COVID, which disrupted supply chains and raised serious concerns around employee safety. The third was the recent sugar controversy.
Tell us how you managed to regain consumer confidence after the MAGGI and the sugar controversy.
MAGGI is a deeply loved brand. The allegations of high lead content were shocking and struck at the heart of food quality and safety. I reached out to regulators, authorities, and the media to explain our stance and reassure the public about our commitment to safety. We went to the Bombay High Court, which allowed us to retest and relaunch. The brand went from being a market leader to completely off shelves and then back to leadership in record time.
The sugar controversy stemmed from allegations by a Swiss NGO, which claimed we had different standards for developing and developed markets. We clarified that this was not true — products with added or no refined sugar are sold globally, and all our products meet and exceed FSSAI standards. The allegation did momentarily hurt the brand, but we had already been working on no-refined-sugar products.
How do you deal with the rise of influencers criticising packaged foods?
There are two phenomena – innocence of ignorance and fake news. Not everyone is a nutrition expert, and that's understandable. But fake news is deliberate and dangerous. There's a lot of half-understanding of nutrition, and this can seriously harm the industry if left unchecked. It's not just religion or politics that suffer from fake news—nutrition is probably a close third in terms of online misinformation. The solution to ignorance is to accentuate the truth. Vilifying or going after influencers doesn't help.
Have these events prompted a rethink of your product portfolio?
We continuously work on improving the nutritional profile of our products. Over the past 5–6 years, we have significantly reduced salt, sugar, and fats across the portfolio. The challenge is balancing taste and nutrition — nobody wants a healthy but tasteless product.
Looking back, what are the biggest achievements under your leadership?
In terms of financial performance, in 10 years, turnover grew 2.5x, net profit 6x, market cap 4x, and shareholder count 7x. RoE rose from 19% to 89%. We've also split shares and declared a 1:1 bonus issue.
Diversity and inclusion is another area I am proud of. When I joined, only 10% of leadership were women. Today, it's 20%. A quarter of our frontline sales force is female.
A third significant achievement is in sustainability. Our coffee and spices are sustainably sourced, and we pay extra to farmers who adopt sustainable practices. We have cut water usage by 50% and achieved plastic neutrality.
What is your view on AI's impact on jobs in the FMCG sector?
Technology should be a tool to enhance progress and prosperity—not the other way around. We are selective in our use of AI and are developing use cases across planning, logistics, automation, and manufacturing excellence.
These use cases will be gradually deployed where there's a direct impact on business growth, productivity, or cost. We're not taking a random approach to automation. Instead, we follow a roadmap—especially for forecasting and supply chain models.
Do you think there is a need to regulate the adoption of AI?
I believe regulation should be based on the use case. Flimsy or poorly thought-out applications of AI can lead to unnecessary job losses. We need clear protocols to prevent such outcomes.
How do you think the threat of Trump tariffs would play out for the Indian economy and the FMCG sector?
India's strength lies in domestic consumption, which makes up two-thirds of our GDP. With inflation easing, infrastructure expanding, and tax reliefs announced, consumption is reviving. India remains one of the most economically robust geographies, especially given global volatility. With 1.4 billion consumers, there's really no parallel.
Recently, you added pet food. What more can we expect from Nestlé's portfolio?
Our four core categories—prepared dishes, confectionery, dairy & nutrition, and chocolate—still have strong growth potential. We have added Pet Care to our basket. With 25-30 million pets in India, growing at 10% annually, and only 5% using complementary feeding, the potential is immense. The premium coffee segment with Nespresso is growing rapidly, and Nestlé Health Science is another new addition. Our JV with Dr. Reddy's focuses on health and wellness products. These are strong pillars and seeds for future growth.
Will Nestlé ever venture into the cola business?
No. Nestlé focuses on nutrition-based, differentiated products that leverage science and technology. You won't see us in the atta-chawal business, nor in cola.
Any regrets?
One of my regrets is that we haven't made any acquisitions during my tenure. We did enter into a joint venture with Dr. Reddy's, but no outright acquisitions. That said, if there's a good fit in terms of business, culture, and commercial alignment with Nestlé, the company would certainly be interested.
While I've developed a strong local team and nurtured local talent, I wish I had given more of them leadership opportunities. There's always that feeling—I could have done more to leverage local leadership.