The Nestle we are building is for another 100 years: MD Suresh Narayanan
New Delhi: Equity analysts call him the “turnaround” MD. At Nestle India Ltd, he is known as an expert crisis manager. Suresh Narayanan, chairman and managing director of Nestle India, agrees that managing the Maggi noodles crisis was the toughest assignment of his career. The 56-year-old Nestle veteran says that he, along with his team, has been reconstructing the Swiss company’s local unit in India for a safer future. In an interview, Narayanan spoke about how the commitment of the Swiss parent has increased post the Maggi fiasco. Edited excerpts:
India contributes less than 2% to Nestle’s global revenue. After the Maggi debacle, how important is India as a market for the Swiss parent?
The signal that we received from the Swiss headquarters is that the commitment to India is unwavering. The organization has been through trauma. As a leader, even I had doubts sometimes whether we are going to be as committed to the country because of what happened. This was something that the top management was very upfront about. The company has been in existence for more than 150 years globally, and it has been through ups and downs... It is not that you suddenly start shaking because of something like this happening.
The decision of the top management to get into new categories, after more than two decades in India, also indicates the level of commitment that would eventually accelerate the game here.
Why didn’t Nestle tap new categories earlier? Was it out of sync with the consumption story in India?
Maybe the earlier management thought about it and maybe they took certain initiatives. We had some launches in the existing categories. Possibly, the feeling was, look the new categories may come in a little later and now let us go full hog on the current categories that we have.
Companies evolve with the business environment of a specific market. I was here with Nestle India eight-nine years ago. The India I left and the India I have come back to are dramatically different. Therefore to put a shadow on what people in the past might or might not have done is a bit unfair. The consumers have evolved, the kind of experiments that people do these days with cuisines was not there earlier. It makes more sense now to bring the products we are examining rather than doing those earlier.
Nestle launched 30 products in six months. This is probably the maximum launches in a single window for Nestle in India. What are you aiming to do?
The Nestle we are building is for another 100 years. The actions for the next four years would certainly set the tone for the next few decades. The Nestle I would like people to know is for the purpose we stand for, which basically is to enable healthy and productive lives for our consumers in a framework where they’ll like our products not only for taste dimensions but for the nutrition and health dimensions.
As a consequence of our overall strategy for growth in India, we’ll continue to support the winners that we have in the marketplace and also keep healthy balance between the revenue and the net profit of the company. Nestle globally is well-known for profitability.
In the next three-year strategy meet, what are the questions you’ll have to answer?
The big one would be on my promise of executing a strategy to accelerate innovation and renovation to participate in the consumer journey in India. Has that happened or not, that’s the core question. The financial targets and all other things will be answered if this is being met. At my level of maturity I should measure this myself. The organization will also look it that way—newer and more fertile businesses for a better future.
Has interference from Swiss headquarters increased after the Maggi crisis?
As far as Nestle India’s core strategies are concerned, things are left to me and the board of directors in India. Nobody is sitting on my head. The company’s belief is if they have posted me here, they have to better be sure that I am capable of this.
I am blessed with that fact that as a leader, as I have a track record with this company, I have a certain level of credibility and trust. I get things passed without too much of argumentation to make the organization understand my point of view... If the overall economic environment of the country goes the way it is, I don’t have any hurdle even in the longer term.