We will continue to innovate selectively and meaningfully: Suresh Narayanan, Nestlé India
Suresh Narayanan, Chairman & MD, Nestlé India spoke about the shifting dynamics of the FMCG sector and how Nestlé is enabling a new era of customer loyalty and brand engagement
As the leader in the FMCG category, Nestlé India is aggressively pursuing diversification or what Suresh Narayanan, Chairman & Managing Director of Nestlé India calls “meaningful innovation and renovation”.
Having overcome the Maggi debacle and yet again emerging as undisputed market leaders in the category, Narayanan and his team are now eyeing a bigger pie in the category this year.
In his trademark cheerful demeanor on a Monday afternoon, Narayanan spoke to us about the shifting dynamics of the FMCG sector and how Nestlé enabling a new era of customer loyalty and brand engagement.
The FMCG industry in India is witnessing a new sentiment in terms of consumer behaviour and preferences, how would you describe this new Indian consumption story?
The core foundation of consumers in India has undergone some changes in the last couple of years. But the central piece remains the same, which is that consumers are staking great value for the brands that they consume. While there has been a journey of premiumisation and increased penetration for a number of brands that in turn has enabled growth in consumption.
But at the core, the Indian consumer has a very intuitive sense of what is worth 10 rupees and what is what a lakh of rupees. So long as this equation that the consumers have in mind is adequately translated and understood and executed by brand marketers, I believe that the consumption story in India will still continue to be strong.
The Q4 numbers for many FMCG companies have not been very encouraging; do you see a turnaround happening soon?
India is more of a consumption-driven economy and consumption still accounts for a substantive part of the growth engine that we have. We can have ups and downs, it could be because of the overall levels of agricultural growth, it could be because of urbanisation and even because of issues relating to the execution of GST.
I believe all of this can have an impact in the short term. But I am of the opinion that India's secular growth story on consumption will continue. So what you are seeing is probably little blips that are happening, but the underlying fabric of consumption has not dramatically changed or dissipated in a way to become a cause of concern for any of us. We have seen a very aggressive diversification of portfolio at Nestle in the last two years.
Tell us about the impact that it has been able to create on ground.
We have innovated quite aggressively in the last two to three years. More than 40 new products have been launched by us across all our categories because innovation is the name of the name.
Why do consumers seek Nestlé?
It is because they do not only seek food quality and safety, but they also seek variety. And I think that is becoming more and more important.
Among today's millennial consumers, who are today over 400 million people in this country, we are happy to be on that journey. If you look at our 2018 results, in some sense they are vindicating it.
Our double-digit growth, or indeed the fact that our new products contribute around 3% of our sales, is an encouraging start.
Is that the end state that we want to be in? The answer is clearly no. But we will innovate and we will renovate selectively, meaningfully and in a manner that consumers see as relevant in their own journey.
You are known as someone who is adept at crisis management. In your view what are the three critical elements of an effective crisis management response?
I was among the many thousands of people who got their hands and minds and they fit together to address the biggest crisis that Nestlé India has faced in over a hundred years of history.
It is to the many faceless, nameless people that I attribute whatever success we have achieved. And I believe that some of the key learnings coming out of the exercise are basically the need to proactively with the environment and transparently live the purpose and the values of the company.
I believe for us as a company, respect is central to all that we do. I believe that if you address the harshest criticism with dignity, with respect, and with transparency, you are able to come back and are able to have a second chance.
Maggie has been such an iconic brand, I am blessed to have this brand and be a steward for this brand. The brand itself has been a very strong entity built over years many people have built it and I think many millions of consumers have given us the benefit of their love.
What are you doing in terms of building competitive advantage when it comes to the use of big data, AI and newer technology?
I think the digital journey for India and the digital journey for Nestlé are very strong features in what we would consider being the success factors for the future. Nestlé India has embraced a digital strategy very strongly; it is in terms of not just consumer engagement but consumer insight generation too.
We are using it in a variety of platforms both for advertising and also for activation. Most recently we launched India's first AI enabled nutrition platform called Ask Nestlé. So it is basically having all the information that you would need in terms of dietary recommendations, in terms of growth charts for children because nutrition is has become an area of enormous fake news. A lot of people carry a lot of perceptions about nutrition which are not scientifically validated.
Nestlé being the world's largest food nutrition and beverage company, I think it is privileged to have a lot of scientific facts at its disposal which we decided to make available to the consumers in consumer-friendly language and consumer-friendly formats.
In your view what are the biggest challenges facing the FMCG industry today?
Number one is to be able to read the tea leaves. As far as the consumer journey is concerned. I think this is not just technical expertise but it's also an art.
Number two, to launch products with innovation and renovation that should not be single-season products but ones that can sustain themselves and are robust enough to form part of the consumer journey.
And number three is seeking sources of differentiation.
Brands are no longer bought because they are products; they are bought because of their experiences. And it is important how you make brands differentiated and experiential in order to appeal to different consumer segments across a very diverse country.For more updates, be socially connected with us on
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