Nestle Sees Rs 7,500 Crore Premiumization Opportunity in India

New Delhi, Feb 4 (PTI) FMCG major Nestle India will be leveraging the trend of premiumisation, where it sees a Rs 7,500 crore opportunity for the company, said its chairman and Managing Director Suresh Narayanan on Tuesday.

Amidst the slowdown, particularly in urban consumption, Nestle India's premium products are outpacing category growth.

According to Nestle, the company is witnessing premiumisation trend universally across urban and rural, the maker of Maggi, Kit Kat and Nescafe said in a presentation before analysts and institutional investors.

Addressing the meet, Nestle India's outgoing Chairman said: "The overall premiumisation opportunity that we see in our categories is roughly Rs 7,500 crore. The growth of this premium portfolio is growing at a CAGR of 16 per cent since 2015."

Nestlé India believes that it has the brand portfolio to deliver and leverage the premiumisation trend in sectors as prepared dishes and cooking aids, milk products and nutrition, powdered and liquid beverages, confectionery and pet care.

It will leverage the power of globally trusted brands, it added.

"We are not seeking to build a premium portfolio. We already have a premium portfolio, which we can leverage and grow to fruition. Even rural India is having a taste for premium products. As part of our urban strategy, we will also tap into the premiumisation trend," he said.

However, Narayanan also added despite opportunities, challenges such as commodity inflation and a slowdown in consumption growth remain.

Food inflation continues to hurt consumption, said Nestle India.

"While headline inflation is moderating, high prices persist on select agricommodities," he said.

Besides, Nestle India is also accelerating its presence in the rural market as per its 'RUrban strategy'. Though there is a slowdown in growth, but rural market outpaces the urban, which was historically always ahead.