According to the latest annual report of subsidiary, India has witnessed to become the largest market for Nestle globally for its instant noodles and soup brand Maggi. Followed with India stands to be the second largest market for Chocolate wafer brand KitKat.
Undoubtedly, India has stood up to be the highest frowing market for Nestle. “Penetration, premiumisation and innovation, combined with disciplined resource allocation, have been key in driving business, making your company one of the fastest growing markets for Nestle globally,” said Nestle India’s annual report for 2023-24.
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Amid the financial year 2024, Nestle sold over six billion servings of Maggi, turning India to be the largest consumer of Maggi worldwide. Looking at the growth and demand in India, Nestle is playing its expansion by launching Oats Noodles, Korean Noodles nad various masala variants at affordable prices.
“The Prepared Dishes and Cooking Aids business recorded a strong growth momentum. This was aided by a balance of product mix, pricing and volume growth in Maggi noodles and Maggi Masala-ae-Magic, supported by strong consumer engagement and market presence with media campaigns and attractive consumer activations,” it said.
Nestle India reported selling 4,200 million KitKat fingers in the confectionery industry. The introduction of new goods, the development of the distribution system, and creative brand activations all contributed to the increase.
“KitKat has emerged as the star performer, by not only delivering strong growth but making Nestlé India the second largest market for the brand globally,” it said.
Maggi Was Banned
However, the product did not just see the bright side, as Maggi was banned for about five months over the allegations of containing lead beyond limits.
But it did not take much time for maggie to return back in the markets. Prior to the crisis, the brand held a market share of more than 70% of the instant noodle industry, but it has since lost that share due to increased competition brought in by the entry of new competitors.
Following the rejection of a request to increase the royalty by shareholders, Nestle India recently declared that it will keep paying its parent company the current 4.5% of net sales in royalties.
The board of the company suggested to the members of the company that they approve the continuation of paying Societe des Produits Nestle SA (the licensor) general licence fees (royalty) at a rate of 4.5%.
The board of Nestle India decided in April to raise the parent company’s royalty to 5.25 percent of net sales by giving it an annual increase of 0.15 percent for the following five years.
When compared to other multinational corporations (MNCs) in India, Nestle India stated in its annual report that “the general licence fees (royalty) rate paid by the company to the licensor is comparatively lower.”
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