Maggi crisis daunting, among career's greatest challenge: Nestle India CMD

Time of India

2 days ago

NEW DELHI: FMCG major Nestle India achieved a CAGR of over 10% in revenue and 21% in net profit over the 2015-2025 decade, led by chairman and managing director
Suresh Narayanan
at the helm. Over the years, Nestlé India's iconic brands—Maggi, Nescafé, and KitKat—have driven sustained growth, leading to FY24-25 revenue of Rs 20,100 crore and net profit of Rs 3,300 crore.
In his final letter to the company's shareholders before his retirement on July 31, Narayanan highlighted the decade's achievements, noting that capex increased from 1.8% of sales in 2015 to 10% in FY 24-25. ``This not only demonstrates the focus on Indian consumers, but also our commitment to manufacture in India and 'Make in India' as a theme'', he said. Narayanan will be succeeded by Manish Tiwary, director at Amazon Digital Services as the new MD.
Reflecting on his first 100 days as CMD of Nestlé India, Narayanan said, they were ``one of the greatest challenges'' of his career, as the Maggi crisis unfolded in June 2015 and led to a nationwide ban of the popular instant noodles.
Narayanan, who took over as the company's CMD in 2015, is recognized for rejuvenating the company's flagship brand, Maggi, after the FSSAI (Food Safety and Standards Authority of India) raised concerns about the high levels of lead and monosodium glutamate in the product, leading to a temporary ban and significant backlash for the brand.
Maggi noodles went from market leadership to near extinction and recovered 60% of its market share within months of its relaunch, he noted.
Over the years, the company has expanded into new categories including breakfast cereals and pet care, despite a market challenged by "inflationary pressures and muted consumer demand''.
"Our pace of innovation is now four times faster than it was a decade ago", he says.
In 2015, many considered us to be solely a Maggi noodles company.
Since then we recalibrated and rejuvenated the portfolio launching over 150+ new products that have contributed to 7% of sales'', he added.
During the decade, he said, ``Together we navigated the black swans and gray rhinos. And seized the rising India opportunity'', he adds.
In the same period, the company's market capitalization grew nearly 4x and the shareholder return CAGR was 17%.
``We were once seen as an urban company with a limited portfolio, but through penetration-led volume growth strategy rolled out in 2015, we now have access to more households and more consumption occasions.
Through relentless consumer cluster-based and RUrban strategy, our brands reach two out of three households'', he adds.
The RUrban strategy began in 2019, and has increased RUrban distribution touchpoints to 28,240. Today the company has a presence in approximately 209,050 villages, and has added 1.3 million more retail outlets since 2016 with the highest gains amongst peers in 2024, the annual report says.
The flagship business--prepared dishes and cooking aids, which contributes nearly 32% of the revenue, has doubled the Maggi business in India.
India is also the largest market worldwide for Maggi, with sharpened and increased pace of innovation and premiumization.
Once a muted business, confectionery has tripled its business in the last 10 years. Kitkat doubled its market share and became the fastest growing brand within the chocolate category here. Today, India is the second largest market for Kitkat globally, a decade ago it was at number 10. Munch and Milkybar have also doubled their business.
In the last decade, Nescafe strengthened its leadership position by gaining market share and bringing over 43 million households into the coffee category, by expanding its reach both at the top and bottom.
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