“Volume growth has started to happen, which is critical for the consumer goods space. Whatever value we report is based on volumes. That has started to happen. Is this a secular trend? I think we’ll have to wait for a while, but at least positive signs have started to come,” Narayanan said in an exclusive interaction with CNBC-TV18.
Despite these positive indicators, challenges remain, particularly commodity inflation, which continues to impact the business environment.
Talking about coffee prices, Narayanan said that more price hikes are on the anvil if coffee prices don’t cool down soon
“Pricing is the last lever, first is on strategic stocking & utilisation of raw material. Will try to minimise pricing as it hurts volumes. Have to watch the space, but doesn’t look like prices are coming down in a hurry,” he said.
Coffee prices have risen to a multi-decadal high across the globe, with prices in India also rising upto 30%. As per the Karnataka Planters Association, the prices of Arabica Parchment have shot up from ₹14,000 per 50 kg bag in 2024 to ₹27,500 per 50 kg bag in the first two months of this year, while prices of Robusta Parchment shot up to ₹23,500 per 50 kg bag in the first two months so far as compared to ₹10,800 in January 2024.
Nestle India’s powdered and liquid beverages portfolio, which comprises its coffee products contributes 14% to the company’s revenues.
However, Narayanan points out that rising costs are not limited to just coffee. Cocoa prices, wheat and palm oil prices continue to remain elevated.
“Overall commodity inflation hasn’t relented. Pressure on pricing and value will continue,” Narayanan said adding that Nestle will try to keep price increases minimum.
Narayanan also added that the company is also actively looking at opportunities for acquisition of D2C brands across categories.
(Edited by : Shweta Mungre)
First Published: Feb 24, 2025 5:57 PM IST
