New Delhi: Nestle India Ltd is betting big on the breakfast segment. The packaged foods maker, famous for its Maggi noodles and Nescafe instant coffee, is looking to garner a bigger share of the packaged breakfast cereals market, dominated by Kellogg’s, PepsiCo and Bagrry’s. “We now have products that can be part of one’s breakfast. Not just Nesplus, the breakfast cereals launched last month, we have coffee, yogurt, oats noodles and milk as well. Each of them can be considered as a breakfast item,” Nestle India Chairman and Managing Director Suresh Narayanan said on Monday.
Nesplus is a brand owned by Nestlé Breakfast Cereals from Cereal Partners Worldwide (CPW), a joint venture between Nestle SA and US firm General Mills.
Narayanan is hopeful the company will slowly become a dominant player in India’s breakfast cereals market, a move that will aid its strategy of volume growth. The country’s food regulator had, in June 2015, banned Maggi instant noodles, it’s single-largest revenue earner then, for alleged presence of monosodium glutamate and excess lead, forcing the company to take the product off retail shelves for six months.
“We are yet to reach the pre-crisis level. In terms of volume, we are about 10% below that level. In terms of marketshare, we have crossed 60%. We still need some time to get back to the pre-crisis level,” Narayanan said. Maggi was still important, and its prepared foods category (Maggi instant noodles and other Maggi branded products) accounted for 30% of the company’s annual sales, he added.
“The dial is shifting, but it needs to shift more,” according to Narayanan.
After taking charge in August 2015, Narayanan had said his priority would be to reduce dependence on Maggi instant noodles.
India’s breakfast cereals market is projected to touch Rs 2,610 crore by 2020 from Rs 1,440 crore in 2015, according to market research firm Euromonitor International. US-based Kellogg’s has more than 30% share of the market, while PepsiCo India has been trying to crack it with items such as idli, dosa, upma and khichdi in ready-to-cook form.
Nestle India, which crossed the Rs 1-trillion in market value last month to emerge as the third-largest packaged goods company after Hindustan Unilever Ltd (HUL) and ITC Ltd, was also open to acquisitions, Narayanan said.
“So far we have grown through the organic route and there are strong organic growth opportunities left. But, if there is an interesting opportunity that fits into the company’s long-term growth strategy, we will evaluate.”
Narayanan, however, declined to comment if the company was evaluating GSK Consumer Healthcare’s malt-based health drink brand Horlicks, which was put on the block in March, or Kraft Heinz’s Complan, also up for sale. Nestle already has a presence in the malt-based drinks category with ready-to-drink Milo.
Nestle is also planning to roll out new products, including a new masala variant of Maggi instant noodles, Maggi dips, KitKat dark chocolate and premium coffee, in the current quarter.