NESTLE’S RECIPE FOR TURNAROUND TRANSFORMATION MEASURES TAKEN AFTER THE 2015 MAGGIE CRISIS HAVE STARTED PAYING DIVIDENDS

NESTLE’S RECIPE FOR TURNAROUND

TRANSFORMATION MEASURES TAKEN AFTER THE 2015 MAGGIE CRISIS HAVE STARTED PAYING DIVIDENDS

The stock price of Nestle shot up and touched the highest point ever that is 15,599.  This value is three times the value of stock during the debacle of Maggie. Nestle has gained 38 percent during last one year. Hindustan Unilever, Dabur, Marico, and ITC stands at 17.58%, 16.48%, -8.11%, -18.31% respectively. The company has followed a well organised series of steps when it faced bad times during the year 2015-2016.

Market analysts such as Edelweiss Securities expect the industry will reach the highest top line growth. Net sales, operating profit, net before tax are all highest for the last five years when September quarter is considered. As per the research conducted by Edelweiss Securities the industry will generate a revenue of 9 percent. Nestle is supposed to maintain their price earnings ratio. Nestle India has been searching for growth in the rural market. They focused on adding new outlets encouraging sampling by launching smaller pack sizes  and they followed region specific promotional schemes. As a result the share of rural market in Nestle India has rised to 20 % by the end of 2019.

The company's exposure to remote areas continue to be lower than the industrial average. Nielsien said that “when the rural market contributes 36% towards FMCG sales, it contributed 60% towards the overall growth slowdown.” Nestle then followed an aggressive strategy. They took their move towards breakfast category. In-order to expand their portfolio they extended their brand Maggie  towards Indian breakfast dishes such as upma and poha. This packaged food are growing at over 20% CAGR .

Almost 4 dozen of new products has been introduced as a overall. It also extended its major brands like Nescafe, Munch, Maggie etc. It is also relaunching brands such as Milo and Nescafe Gold. During 2019 this firm has acquired market share in infant cereals ( cereals), instant noodles and pasta, milky bar,kitkat, and Nescafe.

Brands like kitkat, Munch, Milky bar, Cerelac, Lactogen, Nan are market leaders in their respective categories. Promotional activities have helped them to maintain their leadership positions.  Maggie has regained its market share from banned level to top shot.The increased use of local media, sharp positioning, careful resourcing and monitoring activities has helped much in their faster growth. Company credits all its success and new focuses upon  data analytics of the firm.