Meeting Overview
• Date: October 25, 2023
• Format: Hybrid meeting at Gurugram headquarters
• Key Speakers: Suresh Narayanan (Chairman and Managing Director), Svetlana Boldina (CFO), Senior management team
• Theme: "Growing together consistently today and tomorrow"
• Transcript Availability: Accessible on the company's website
Key Discussion Points
Company Strategy and Market Adaptation
• Shift in presentation style to emphasize company ethos.
• Acknowledgment of global challenges and need for quick adaptation.
• Introduction of the "five P's": purpose, people, planet, partnerships, performance.
Consumer Behavior and Market Opportunities
• Focus on digital analytics and infrastructure investment.
• India projected to be the fourth largest global economy by 2030.
• Growth potential in the rising middle class (487 million to 700 million by 2030).
Evolving Consumer Trends
• Transition from cash to digital transactions.
• Local competition driving innovation.
• Emphasis on premiumization and affordability.
Health and Sustainability Initiatives
• Commitment to healthier eating and aligning with consumer values.
• Investment in R&D for product innovation, including millet-based products.
• Collaboration with Indian Institute of Millet Research for sustainable practices.
Sustainability Goals
• Plans to eliminate coal use by mid-2024 and transition to renewable energy by mid-2025.
• Achievements in plastic neutrality and greenhouse gas emissions reduction.
• Commitment to community impact and workforce diversity.
Financial Performance
• 15% increase in domestic sales over nine months.
• 20% year-on-year growth in e-commerce.
• Strategies for cost efficiency amid rising commodity prices.
Future Growth Strategies
• Balancing growth and profitability with INR 5,000 crores capital investment (2023-2025).
• Focus on innovation, talent management, and community impact.
R&D and Innovation
• Over $2 billion investment in R&D.
• Focus on energy-efficient technologies and sustainable practices.
• Streamlined innovation process to reduce time to market.
Q&A Highlights
• Addressed concerns about local competition and pricing strategies.
• Discussion on potential M&A opportunities and market entry strategies.
• Emphasis on long-term growth potential and leveraging synergies.
Conclusion
• Commitment to sustainable growth, innovation, and adapting to consumer needs while maintaining strong financial performance.
Nestlé's Commitment to Growth and Profitability
• Aim for growth rates above 7% without compromising margins.
• Focus on nutrition and health science categories for competitive advantages.
Brand Trust and Consumer Loyalty
• Continuous effort needed to earn market share, especially among Gen Z.
• Consumer loyalty should not be taken for granted.
Premium Products Definition
• Only 10% of sales categorized as premium.
• Strong premiumization efforts in smaller markets.
Pricing and Advertising Strategies
• Half of the portfolio experienced price changes; no significant rollbacks expected.
• Focus on efficient digital marketing despite lower overall ad spending.
Infrastructure and Growth Trajectories
• Infrastructure being built to support long-term growth with cautious expectations.
Distribution Reach and Portfolio Gaps
• Distribution reach at 5.2 million.
• Growth influenced by repeat purchases and diverse brands.
Gross Margin and Innovations
• 200 basis points increase in gross margin due to raw material softening.
• Long-term goal of 10% of sales from innovations.
Margin Improvement Strategy
• Focus on stable margins while pursuing growth; short-term sacrifices may occur.
• Cautious approach to new product launches due to operational complexities.
Closing Remarks
• Gratitude expressed to participants; encouraged follow-up questions.
• Emphasis on teamwork for company success.
• Session recorded and will be available on the company's website.