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4A Nestle

Nestle has been expanding its rural distribution network by adding 200,000 new retail outlets annually and focusing on products priced below Rs. 10. It has also improved its distribution management system to increase transparency and efficiency. Recently, Nestle launched affordable products like Maggi Rasile Chow noodles for Rs. 4 and Maggi Masala-ae-Magic taste enhancer sachets for Rs. 2 to address malnutrition and provide low-cost meals in rural areas. It has also partnered with Drishtee to create a rural supply chain and sell products while learning more about rural needs.

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316 views

4A Nestle

Nestle has been expanding its rural distribution network by adding 200,000 new retail outlets annually and focusing on products priced below Rs. 10. It has also improved its distribution management system to increase transparency and efficiency. Recently, Nestle launched affordable products like Maggi Rasile Chow noodles for Rs. 4 and Maggi Masala-ae-Magic taste enhancer sachets for Rs. 2 to address malnutrition and provide low-cost meals in rural areas. It has also partnered with Drishtee to create a rural supply chain and sell products while learning more about rural needs.

Uploaded by

priyankabaxi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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AVAILABILITY: company's sales people have been given targets of

delivering "6,000 new sales points every month in rural areas" to expand
presence in Indian villages. The company has recently relaunched some of
its products, including Rs-2 Munch, Rs-4 Rasile Chow noodles and 12-gm
Everyday (milk powder) packets across the country.

onthedistributionfronttoo,Nestlehasdonequiteabitof
improvisation.Ithasbegunconnectingtheallpowerful
distributors(whichplayamajorroleinroutetomarket)througha
uniformandintegratedDistributionManagementSystembesides
alsobeginningtheprocessofadvancedsalesautomation.This
willincreasetransparency,accuracy,speed,enableenhanced
efficienciesintradespendsandultimately,executioninthe
market.Itwillalsoliberatethefrontlinesalesforcefromsomeof
theiradministrativeburdenandenablethemtofocusmoreontheir
corefunction.
PardeshiandJoshialsopointtowardsenhancedfocuson
distributionandpricepointbasedproducts,sayingNestlehas
addedaround200,000retailoutletsannuallyforthelastthree
years.ItisalsofocusingonproductspricedbelowRs10.
ProductsatpriceslowerthanRs10helpaddcustomersanddrive
penetrationinruralareas.
AFFORDABILITY: Nestle, too, recently launched Rs 2 and
Rs 4 products -- Maggi Masala-ae-Magic and Maggi Rasile
Chow, products which be first marketed in areas with low
purchasing power. Maggie Rasile Chow has been developed
especially for the rural/semi urban markets to provide lowcost, light meal fortified with iron. Masala-ae-Magic is a taste
enhancer containing iron, iodine and vitamin A. Shivani
Hegde, general manager (foods), Nestle India, says these
products were developed to address the widespread concern
about micro-nutrient malnutrition in India.

Duringthelastoneyear,ithaslaunchedtwobigproduct
innovationsMaggiRasileChowandMaggiMasalaeMagic

specificallytargetedatthehinterlandandlowincomefamilies.
Comingfromacompanywhichhastraditionallytargetedurban
clientele,thisattemptattakingproductsfurtherintoIndian
countrysidehappenedevenasNestlehikedpricesinselectstock
keepingunits(SKUs)inurbanareastogetmarginsbackontrack.
Then,insomeproducts,Nestlehassuccessfullyintroducedlower
pricedSKUssuchasChotuMunchatRs2andsinglefinger
KitkatformatatRs5tofurtherboostrealisations.
Accordingtothecompanysannualreport,MaggiRasileChowhas
beendevelopedespeciallyforrural/semiurbanmarketstoprovide
alowcost,tastylightmealthatisfortifiedwithironMaggi
furtherleverageditsstrengthlastyeartodriveaffordable
nutrition.TheMasalaeMagicisafortifiedtasteenhancerwith
iron,iodineandVitaminA.
Butalongsidetargetinglowerincomefamilies,Nestlecontinuedto
expandpremiumproductsalso.AnandRathiSecuritiesShirish
PardeshiandAniruddhaJoshipointedoutinananalysisthat
simultaneousuptradingandlowerexcisearedrivingrealisations
forNestle.
Thefocusonexpandingrevenueofpremiumproducts(Maggi
Pazzta)andthoseunderchocolatesaredrivingupaverage
realisations.Lowerexciseandselectpricehikesofchocolatesare
alsodrivinguprealisations.
Drishtee has entered into a partnership with Nestle India to create a
rural supply chain network in India. Initially, Nestle India is leveraging
Drishtees rural retail network to sell its products and understand the
rural needs.

ACCEPTABILITY: Nestle and also announced the launched


of a low-priced variant of Maggi noodles under its flagship

Maggi Instant Noodles, aimed at meals for the bottom of


pyramid consumers. The new Maggi variants have been
developed especially for the rural and semi-urban markets
in order to provide low-cost fortified meals for consumers.
While Rasile Chow is gravy noodles at Rs. 4, Maggi
Masala Magic is a taste enhancer in a single use sachet
priced at Rs. 2 each.

AWARENESS:
Health Camps: The Popularly Positioned Product, MAGGI Masala-ae-

Magic has been developed with a view to address these deficiencies


where they are most prevalent, among low income consumers. The
product is an affordable spice based taste enhancer, fortified with
micronutrients, namely iron, iodine and vitamin A and has been designed
to be easily combined with traditional dishes.
Due to the existing lack of information regarding micronutrients, Nestl
India developed a campaign to create micronutrient awareness through
Health Camps.
Nestl collaborated with the Drishtee Foundation to set up health camps,
where visitors received information regarding micronutrients and their
deficiencies, in addition to health services. Samples of the MAGGI product
were distributed at the health camps and made available in the villages by
leveraging Drishtees pre-existing retail points.

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