Dear Members,
As I write my last shareholder letter,
I feel overwhelmed with emotions - a sense of pride - a feeling of
nostalgia - and immense gratitude as I look back at almost a decade of service in your
Company at the helm.
It was a decade that brought both opportunities and challenges. Times
that were unpredictable, yet promising. Together we navigated the black swans and gray
rhinos. And seized the rising India opportunity. In the unpredictable dance of light and
shadow, true resilience was forged.
First 100 Days - July 2015
My first 100 days as the
Chairman and Managing Director of Nestle India had been one of the
greatest challenges of my career. Yet they stand out as enriching experiences! Confronting
the MAGGI crisis was daunting. Every step towards stability had its risks. Yet we were
bold with our TRUTH.
It was the brand TRUST of MAGGI and collective strength of our
employees, partners, distributors, suppliers and consumers that helped your Company bounce
back with renewed vigour.
MAGGI noodles went from market leadership to near extinction and
recovered 60% of its market share within months of its relaunch.
At that time, a young brand manager suggested ''why don't we relaunch
MAGGI onlineRs" I asked about the risk of failure. After a quick assessment, we
relaunched MAGGI online and the rest is history—60,000 boxes were sold in less than 5
minutes on Snapdeal.
Today 'Aapki MAGGI' is the most loved and enjoyable brand.
Sometimes adversity pushes you into a better destiny. I am reminded of
Nobel laureate Rabindranath Tagore's stirring lines from the Gitanjali: "Let me not
pray to be sheltered from dangers, but to be fearless when facing them."
It's in navigating the storm, not avoiding it, that we often find our
truest north.
Our journey has never been one of short-cuts or settling for less.
We made the right investments— not just in assets, but in ideas
and people. And we made responsible choices - choices that honored our values, sustained
our growth. We kept our promise of unlocking the power of food, to enhance the quality of
life for today and generations to come. Encapsulated in our heartbeat - Purpose, People,
Partnership, Planet and Performance, we walked the path of progress.
Every morning as a new day dawns...8,629 employees in our factories,
fields and offices, work with indefatigable zeal and a singular PURPOSE of serving our
beloved consumers, with a single pursuit of bringing products that are of unimpeachable
quality and highest safety standard.
Moments and Milestones - Ten Years of Service
We live in capricious times.
Inflationary pressures. Muted consumer demand. Tightening of the
wallet. COVID a harbinger of economic slowdown, geopolitical crisis - all wrapped up in a
decade of promise, challenges and unexpected opportunities. Volatilities will come and go,
but it was the strength of teams, brands and conviction that made us stand up to the odds
and deliver 10 years of consistent performance.
Performance - Innovations - Value Creation
Over the last decade, our revenue witnessed a CAGR of 10.3% while the
corresponding profits from operations grew by 13.5%. In the same period our market
capitalization grew to
3.9 times and the
Total Shareholder Return
(TSR) CAGR was 17.0%.
Just 10 years ago 80,000 Shareholders entrusted us with a part of their
future. Today, that incredible Shareholder Parivaar has grown to over 550,000
We were once seen as an urban Company with a limited portfolio, but
through penetration-led volume growth strategy rolled out in 2015, we now have access to
more households and more consumption occasions.
We no longer fear failure!
Launching new products doesn't happen with a flip of switch! We
understood the evolving pulse of the consumer. Prioritized speed in execution. Our pace of
innovation is now four times faster than it was a decade ago.
In 2015, many considered us to be solely a MAGGI noodles Company. Since
then we recalibrated and rejuvenated the portfolio launching over 150+ new products that
have contributed to 7% of sales.
Our consumer metrics score went up in the last decade.
Through relentless consumer cluster-based and RUrban strategy, our
brands reach 2 out of 3 households.
We have added 1.3 million more retail outlets since 2016 with the
highest gains amongst peers in 2024. The RUrban strategy began in 2019, and has increased
RUrban distribution touchpoints to 28,240. Today we are present in approximately 209,050
villages.
In the last decade, NESCAFE has strengthened its leadership position by
gaining market share and bringing more than 43 million households into the coffee
category, by expanding its reach both at the top and at the bottom.
Once a muted business, Confectionery has tripled its business in the
last 10 years.
KITKAT doubled its market share and became the fastest growing brand
within the chocolate category in India. Today, India is the second largest market for
KITKAT globally, a decade ago it was at number 10. MUNCH and MILKYBAR have also doubled
their business.
The Prepared Dishes and Cooking Aids business- our 'Dil ki dhadkan' or
the heartbeat of your Company has doubled the MAGGI business in India which is also the
largest market worldwide for MAGGI, with sharpened and increased pace of innovation and
premiumization.
We ventured into some new categories to establish robust pillars of
growth, such as Breakfast Cereals and Petcare business. Signaling the potential of health
care products in India, your Company has joined hands with Dr. Reddy's Laboratories Ltd,
which has got on to an encouraging start, combining synergies of nutrition product
portfolio and distribution reach.
In the last 10 years, the Out - of- Home business moved from just being
a 'coffee vending business' to a vibrant and powerful portfolio business. The portfolio
has been transformed with premiumization in beverages and foods, robust customer
acquisition and geographical expansion beyond metros and mega cities. Today, it is the
second largest business in Asia, Oceania and Africa. Our 960 Retail One kiosks are now
located in colleges, hospitals, and tourist hotspots employing over 245 women and people
with disabilities as food handlers.
As a consequence of robust growth, your Company is investing in new
capabilities and capacities, by increasing product lines in existing factories and setting
up the Sanand factory in Gujarat, for Confectionery and Prepared Dishes and Cooking aids.
On the anvil is the 10th citadel of manufacturing that is coming up in Odisha.
The CAPEX levels have increased from 1.8% of sales in 2015 to 10.0% of sales in the
financial year ending 20242025. This not only demonstrates the focus on Indian consumers
but also our commitment to manufacture in India and 'Make in India' as a theme.
We walked the path of the virtuous circle to achieve efficiencies, to
free up our resources, to invest in key brands, products and growth platforms, drive
market shares and thereby drive profitable growth, keeping consumers and our people at the
core.
Speed - Technology - Digital Transformation
In the last decade your Company accelerated its digital journey,
adapting to the new vistas of change in consumer marketing, distributor outreach and in
factories. All our employees are now digitally wired.
Technology has been the biggest enabler for sales and distribution. We
can geo - target using analytics, markets and pin codes we need to go to with our
products. Today, using data analytics and with the benefit of AI, we move from
information-based platforms onto predictive platforms.
Through sales automation software, our salespersons know where to sell,
which promotion to focus on and which outlet to concentrate to enhance business. Our world
class Distribution centers are racked, stacked, and fully technologically enabled.
Our factories in India are environment-friendly and digitally connected
with most contemporary technologies.
People - Passion - Progress
Many years ago my 'paati, (grandmother) gave me timeless wisdom
'Janangala pattuko' (take care of the people and things will take care of themselves). Her
words still resonates with me, because it is the PEOPLE who matter.
Your Company has a muti- generational workforce from Baby boomers to
Gen Z.
Diversity creates a unique intersection of humanity. Each with a unique
experience, a distinct cadence of thought, quiet wisdom and audacious dreams.
People are invested in your Company for a long haul. In my current role
nearly 6,000 people were awarded long service awards (ranging from 10 - 35 years). Around
41 people with disabilities work in our factories and offices. We have one of the most
progressive policies on inclusivity, bringing about mindset shifts and nurturing
future-ready women leaders as successors for senior leadership roles.
Dream in Moonshots
At 22, Sunil Kumar Singh left his home in Chapra, Bihar, with a dream
of a father: to gift his daughter the education he perhaps never had. He joined Nestle
India to oversee the kitchen pantry. He serves the best NESCAFE to the employees. Today,
his daughter
Jyoti, armed with an economics degree, holds the position of an
associate within the very Company where her father works.
A decade ago only 10% women formed the management committee, today
there are 21% women. 50% of our board members are women!
We have one of the highest representation of women in FMCG field sales
force.
The Sanand factory has around 45% women workforce who do
EVERYTHING— plan, procure, produce, package, quality control, release for
warehousing, control sophisticated digital factory operations and nurture every pack that
YOU as our consumer relish. They work relentlessly, balancing work and families - a
determination that is inspirational!
My one piece of advice to our employees is that true contentment in
work lies not just in reaching the destination, but in savoring every step of the journey.
Holding fast to your values and not forgetting people who championed
your success.
Partnerships - Growing Together to Go Far
We are integral part of the India story tracing our modest beginning
113 years ago. Our first sales agents began work in Chennai and Kolkata in 1912.
In the last decade, we have deepened our connection with Bharat and its
stewards - our 80,000 dairy farmers, 5,000 coffee farmers and 2,500 spice farmers. They
toil hard to give our consumers, brands of impeccable quality. Today about 40% of our
distributors have been associated with us for over 10 years. They have seen us through
thick and thin, good times and bad, crisis and calmer moments.
Over 4,600 suppliers, give us materials and services of unimpeachable
quality, and our sustainability partners make sure that we walk the talk!
Purpose - Business as a Force For Good
PURPOSE is the raison-d'etre for existence in business. When interwoven
with performance it makes meaningful contribution to the consumers, people and the nation.
Sant Kabir presciently said:
(In vain is eminence, just like a date tree. It gives no shade for
travelers, its fruit is hard to reach)
Your Company continues to positively impact the lives of 16 million
beneficiaries, with the hope to transform a life, a community, a village, through rural
development, education, nutrition awareness, environmental initiatives, livelihood
enhancements, feeding support programmes, water and sanitation improvements.
Your investment in your Company is often so much more than just a
transaction. Your shares are interwoven with life's most significant milestones. It is
tied to the dreams of a first home, the promise of education for your children, the
celebrations of a wedding day and the security of retirement.
I met a young gentleman studying at a management institute in India,
his father is a Nestle India shareholder, who sold his shares purchased many years ago to
fund his education. It is with this understanding that I, alongside my colleagues, step
into our roles each day, mindful of the immense faith you have placed in us with your
investment. Thank you for that unwavering trust.
Where the Heart Beats - Culture and Values
CULTURE is the unspoken language that helps people act in difficult
times. The culture of your Company rests on the pillars of respect, decency, diligence and
humility. Culture is the chemistry between the 'Power' of Purpose and the inspiration of
our sacred VALUES which if nurtured can lead to sustainably strong and robust results
irrespective of external circumstances. The only legacy a leader leaves behind is culture.
With Gratitude
As it is often said, great organisations make ordinary people do
extraordinary things.
To the partners for their collaboration, the esteemed Board of
Directors for their guidance and trust in the future of the Company, our people for their
integrity, determination and drive and the consumers for bestowing their love for our
brands - It has been a privilege to serve you.
A special thanks to Rita Srivastava, my executive assistant for 20
years, who has managed my time and work life with impeccable commitment and dedication.
Finally Sunil for serving the best NESCAFE that would keep me
invigorated for long hours.
Mahatma Gandhi had once said,
"The best way to find yourself is to lose yourself in the service
of others".
Today, I officially pass the torch of your Company into the capable
hands of Mr. Manish Tiwary to steer your Company into the next phase of growth, building
upon the strong foundation that has been set.
I truly believe that I leave this organization, which I think will go
from strength to strength, walking faster, more focused, more determined and FUTURE-READY
and most importantly, inclusive and compassionate.
Suresh Narayanan
Chairman and Managing Direct