Nestle’s product portfolio perks up with new launches

Nestle’s product portfolio perks up with new launches

Author | Source: The Economic Times | Friday, Jan 20,2006 8:41 AM

Nestle’s product portfolio perks up with new launches

Nestle India's product portfolio is getting longer and stronger. The company's 'innovation & renovation' gameplan has triggered a slew of launches and relaunches in the last six months, the latest being Nestle Ceremeal Daliya (porridge). Also on the cards is Everyday sugar-free dairy whitener which is being testmarketed, and Nescafe 3-in-1 coffee readimix.

According to sources, Ceremeal has been launched in West Bengal and Tamil Nadu in two variants - wheat and multigrain daliya - and would be progressively rolled out across the country. Its sugar-free dairy whitener is an extension of Everyday Dairy Milk whitener that has remained a low key brand for several years. The sugar free variants are being seen as a move to perk the brand up.

“This could be primarily to kick start growth for Everyday whitener brand leveraging the new health and low-cal trend,” said a senior executive in a rival food company. Nestle took the same health route for its instant noodle brand, Maggi when it launched Atta noodle. The new Nescafe 3-in-1 coffee mix is actually a relaunch. Its previous attempt to instant coffee mix five years ago had come a cropper.

The new product initiatives come close on the heels of Nestle's innovation strategy late last year. The company launched Maggi Atta Noodles, fortified Maggi Soups and Nestle Raita in succession.

When contacted, a Nestle spokesperson said, “Nestle India continuously focuses its efforts to understand the changing lifestyles of consumers to develop food products that provides them with convenience, taste, nutrition, health and wellness. The company will innovate and renovate its product portfolio to add value to consumers in the different categories.” On the other hand, the company has been offloading products too. Sources said that Nestle India was in the process of withdrawing its chocolate health drink brand Milo from southern markets. The brand did not stand up to the company's expectations during the last several years and as reported by ET earlier, there were indications that it might be phased out. In fact, Nestle India had also begun rationalising it product portfolio late last year. As part of this strategy, it moved out of dust tea, withdrew Nestle Chocostik, butter and Nestle Choo.

“The company plans to discontinue products that do not add value to its portfolio,” a Nestle spokesperson had told ET in December last. He had added, “Nestle continuously reviews its product portfolio to maximise shareholder value on a long-term basis. Discontinuation of Chocostick, Butter and Dust Tea is part of the process.”

Now the company is all set to focus on aggressive marketing. In a recent analysts' meet, Nestle had mentioned that its advertising costs had declined 8% in the first nine months of 2005. In terms of percentage of domestic sales, it declined to 5.5% against 6.7% in the previous year.

Actually the food major was implementing GLOBE (global business standardisation and MIS system) as a result of which marketing activities had to be curtailed. With the GLOBE implementation complete, Nestle intends to again focus on marketing investments.

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