Nestle India's Premiumisation Game: CEO Manish Tiwary Eyes Tighter SKUs On Quick Comm Boost

India's leading fast-moving consumer goods (FMCG) major Nestle India will be leveraging the trend of premiumisation in urban areas where it sees a massive opportunity for expansion in the near-term. According to Nestle India's new managing director and chief executive officer (CEO) Manish Tiwary, the consumer goods giant will focus on tightening its stock-keeping units (SKUs) in view of the evolving customer demands.

In terms of premiumisation, customers switch to higher-end products in the same category. In an exclusive interaction with NDTV Profit, Nestle India's Tiwary said in the urban space, premium products are outpacing the category growth. The new CEO bets on the growing quick commerce segment boost to strengthen the company's premiumisation game.

Discussing his vision for consumers, Tiwary said many people in the Delhi-NCR region, especially Gurugram are now living like Europeans. "I want every house in Gururgram to have an espresso machine as they can afford it. They are used to it and now with the quick commerce segment, they have a new route to markets," Tiwary told NDTV Profit.

Tiwary explained that earlier if one walked into a store, a company could have a maximum of 5,000-6,000 SKUs because real estate is expensive. "Today one of our best selling SKUs in NCR's quick commerce region is Nescafe Roastery. The product comes in medium roast and black roast."

According to the newly-appointed CEO, earlier it was very difficult to search for these products in a physical store. "Now, with search algorithm, we get to know the moment consumers buy a roastery. So, that quick route to markets is definitely helping us boost our e-commerce journey," he said.

According to Nestle, the company is witnessing premiumisation trend universally across urban and rural, the maker of Maggi, Kit Kat, and Nescafe. In the traditional trade space, Tiwary highlighted the resilience of the service by the local kirana waalas in urban and rural areas. ''I see them as the backbone. Organised market can never match that," he said.

Nestle India is probably the best supplier when it comes to supply chain market. "This is why our market share in quick commerce are better than in general trade. I see that working well for us. The segment will grow as long as innovation lasts," he said. Tiwary said Nestle India has fixed a revenue target of achieving over annual 40% growth in the rural space.

Nestle has been in India for 113 years and worldwide, the brand has existed since 1866. Tiwary said he doesn't want to change even a single thing about the brand. "In the last 10 years, we've had double-digit growth and our brands have strengthened. Our tagline is 'fast, focussed and flexible'. However, the definition of fast keeps on changing," he said.

Earlier, 'fast' meant same day delivery, now it means 10 minutes. The CEO believes that customer centricity is of extreme importance for Nestle India. "Too often, we can be guilty of first putting the financial proposal and then focusing on consumer proposition. That does not work, in my opinion."

Tiwary explained if a company's consumer proposition is great, one can do financial modeling to suit it. For expansion, Nestle also plans to hit micro-targets, segment-wise. "Food is local. India does not have one unified taste. We have to think of every segment. We'll focus on expansion after the success story of our chicken noodle brand which worked very well in the northeast region. Once demand rises, we bring down retail prices," he said.