Emerging markets to boost Nestlé

07 November 2012

VEVEY: Nestlé, the Swiss food company, expects emerging markets to provide at least 50% of sales by 2020, as several major trends reshape the trading landscape around the world.

Nandu Nandkishore, the firm's zone director, Asia, Oceania, Africa and the Middle East, stated that fast-growth economies generated approximately 40% of its business in the opening six months of 2012.

"Our expectation is that by the end of the decade that will reach 50%," he added, the Economic Times reported.

Urbanisation will be one core shift supporting this process, alongside rising affluence among consumers, both of which should encourage shoppers to buy more packaged food products.

"In emerging markets, whether it be China, India or the Middle East or Africa the driver of growth is GDP and growing access to income," Nandkishore said.

"The expectation is growth from all these markets, and it is not one market against the other. All markets will grow."

Within this, China and India, each possessing sizeable populations and proven track records of rapid annual expansions in GDP, were cited as two key countries.

"It is inevitable that one of the prime expectations from China and from India is to deliver growth, which lives up to the economic potential that both these markets have going forward into the future," Nandkishore said.

In demonstration of its commitment to serving consumers in these nations, Nestlé is soon to unveil a new R&D centre in Manesar, located in Haryana, a northern region of India.

"It is just an indication of our faith and expectation," Nandkishore. "India is a very much a market which are looking for growth and it remains an important market for us."

Last year, India supplied less than 2% of Nestlé's global revenues. By creating products suiting local tastes, and tackling issues like malnutrition, the firm hopes to increase sales and consumer welfare.

"We need better and more precise ways of identifying the problems associated with malnutrition. We believe there are three areas for intervention; namely education, fortification and regulation," said Nandkishore. "It is a challenge but also an opportunity."

Data sourced from Economic Times/Hindu Business Line; additional content by Warc staff