Nestlé India is grappling with subdued demand in urban areas due to rising food inflation, according to Suresh Narayanan, Chairman of Nestlé India. Speaking at a media briefing on Tuesday at the company’s infant foods plant in Samalkha, Narayanan highlighted pressure points in mega cities and metros, while noting that tier-one towns and rural markets remain relatively stable.
“The FMCG sector is experiencing sluggish demand, with growth slowing to 1.5-2%, a sharp drop from the double-digit growth seen in previous quarters,” Narayanan remarked.
The maker of popular products like Maggi noodles, KitKat, and Nescafe reported a marginal 0.94% year-on-year decline in net profit for the July-September 2024 quarter, falling to ₹899.49 crore from ₹908.08 crore in the same period last year. The decline was attributed to softer demand and rising commodity prices.
Narayanan expressed concern over the surging prices of fruits, vegetables, and edible oils, which could lead to further price hikes if the situation worsens. In September, vegetable prices, including tomatoes and onions, surged by 35.9%, exacerbated by heavy rains and supply disruptions. Additionally, a 20-percentage-point hike in import duties on crude and refined edible oils drove India’s retail inflation to a nine-month high of 5.5% in September, up from 3.65% in August.
