Also, don’t forget Nestle Classic. I can see now that it is placed side by side with Dairy Milk in most shops.
Not only the visibility has improved but some Nestle products also offer better value, especially in those categories where Cadbury is leading the market, e.g. 5 Star vs Bar One, Dairy Milk vs Nestle Classic (In ₹10 package Daily Milk offers 13.5 gm & Nestle Classic offers 18 gm).
All this ramp-up in visibility & newer variety launch has been visible in last 1-2 years. So, it is expected that the Dairy segment at least will post decent results in the coming times.
Suddenly I can see many neighborhood large & small grocers stocking Nestle Milo (and keeping it in front for better visibility), a brand which I hardly knew existed because of very poor visibility.
Also, a search for Horlicks, Complan & Bournvita on Bigbasket, yielded Nestle Milo as the top ‘Sponsored’ result. The same search for Amul Pro didn’t yield Nestle Milo as the sponsored result. Surely, Nestle is aggressive against the incumbents which have greater market share (Amul Pro certainly doesn’t have much market share).
Did anyone attend last years agm ? Since these companies dont do concall, was there some talk on change to aggressive strategy by the management? As currently all opinion available on this is through newspapers or scuttlebutt. There seems quite a bit of aggression. And best part is this is without lowering pricing . The prices of Amul Kool , market leader in cold milk is rs 25 and so is Britannia Moo while Nestle prices it at 35 rs for similar quantity and so far as what I heard from few departmental stores , it has good response .
And lots of variety of chocolates with good margins and different Maggi introduced ( although the new trio varieties maggi has lukewarm response ) .
Disc - Invested .
I enquired a nearby grocery store as to why they are stocking Nestle’s chocolates in place of Cadbury’s? The store manager told me that Nestle is giving them better (~6%) margins and also offering gifts based on lottery.
Given the significant contribution from younger age target segment, does Nestle deserve the present PE valuations? While there is a lot of scope in the existing market, but given the shrinking size of the overall TM, there would be some proportionate effect
Nestle prepares infant foods as well which is a major proportion . While a lot of its products like Nescafe , Maggi are targeted at all age groups while confectionary like Kitkat, Munch also liked by young adults and teenagers alike . So this wouldnt make that much of a difference to Nestle IMHO . Moreover company keeps on introducing newer products from parents stable plus they also customize it for India . Besides this , the management is nimble enough to adjust to changing demands of the country , they being in the country for so long .
Large Q they seem to have adjusted taxes for April-June Q after tax cuts were announced so they ended paying up very low taxes.
Last Q was slightly better is terms of sales. Biggest difference is sharp rise in raw material prices in Q ending December. I guess it is mainly due to milk. Milk became 5-8% costlier. Milk prices have risen again in current Q by about 10%. This is planned move by government to increase farmer’s income.
Nestle India - Full Year, 2019
Total Sales of INR 12,295 Crore
Domestic Sales Growth at 10.9%.
Profit from Operations at 21.0% of Sales
Net Profit of INR 1,969 Crore
Nestle India Continues to Deliver Broad Based volume and mix led growth
Total Sales and Domestic Sales for the year increased by 9.6% and 10.9% respectively. Domestic Sales growth is broad based largely driven by volume & mix. Export Sales decreased by 9.9% due to lower exports of coffee to Turkey.
MAGGI Noodles, KITKAT, Nestle MUNCH, CEREGROW, MAGGI Masala -ae- Magic, NESCAFE RTD and NANGROW delivered strong performances during the year.
New launches like KITKAT DESSERT DELIGHT Rich Chocolate Fudge, MAGGI Fusian Range and MILO Cocoa-Malt Beverage Mix which have witnessed encouraging response.
The trend of higher commodity prices witnessed in recent quarters is likely to continue in the near future.
I kept this in mind and wanted to revisit this. It was quite easy for us to get our child off. It was like a switchover in one meal itself. Anyways.
Was looking at how big Nestle India’s contribution to Nestle parent is. We are the fastest growing in the major countries where Nestle is present. Thought to share this data point.
