India is emerging as more than a growth market for Nestlé, with the country increasingly serving as a source of products, talent, digital capabilities and business practices for the global group. Nestlé S.A CEO Philipp Navratil said the company wants India to become one of its top five markets globally, with the ambition already on the horizon.
“Top five is definitely on the horizon. It’s not something that will happen 20 years down the road,” Navratil said in a media interaction here on Wednesday.
The company’s India strategy is built around five global priorities — portfolio, real internal growth (RIG), efficiency and transformation, cash and capital allocation, and performance culture.
India is seen as a strong example of the RIG-led growth strategy, which combines volume growth with mix and premiumisation. Nestlé wants to reach more households while creating opportunities for premiumisation and maintaining affordability across consumer segments.
“Volume growth is important because it improves efficiency and allows us to serve more consumers,” Navratil said.
Digitalisation and more efficient ways of working are being used to generate savings that can be reinvested in growth, marketing, innovation and product improvement.
India as a global capability hub
Nestlé’s India role extends beyond selling products to Indian consumers. The company exports from India to around 28 countries, while its Indian operations contribute expertise in manufacturing, R&D, digitalisation and business services.
India is also an important sourcing base, with more than 90% of raw materials used in its Indian operations sourced locally. The company works with more than 70,000 dairy farmers and around 5,000 spice farmers and supports coffee growers through regenerative agriculture practices.
Nestlé recently inaugurated a capability centre in Hyderabad and runs global IT services from Bengaluru, including for Nespresso. The company expects these activities to grow as artificial intelligence becomes more integrated into business processes.
The Samalkha factory is another example of capabilities in digitalisation, quality and manufacturing excellence that could be replicated across other markets.
Navratil said the Indian operation was providing lessons to the wider group in areas such as consumer centricity, end-to-end business thinking and mindset. He said the Indian team had developed an “absolute winning mindset” around serving consumers better.
Nestlé sees growth opportunities across almost all its businesses in India. Nutrition has significant headroom, while rising female workforce participation could provide a structural growth driver. The company also sees opportunities in food, confectionery and coffee.
Pet food is another category expected to grow rapidly, although Nestlé said it remains relatively small and will not drive the bulk of absolute growth in the near term.
“Growth will come from Maggi, brands like KitKat, brands like Munch and Nutrition,” Navratil said.
Nestlé expects to eventually establish pet food manufacturing in India, although it has not provided a timeline or investment figure.
Capacity to expand with volumes
Nestlé did not announce a specific new investment for India but said the country would remain a major recipient of capital.
The company plans to add capacity as volumes grow, particularly in businesses that already have substantial scale. Higher volumes lead to better capacity utilisation, creating the need for further investment.
While Nestlé continues to monitor acquisitions, organic growth remains its primary focus. The group is seeking to reduce leverage, making acquisitions less of a priority, although selective bolt-on deals could be considered.