Food inflation reshaped household consumption in FY26, says Nestle India CMD

Nestle India on Friday said fiscal year 2026(FY26) was a challenging year for India's consumption economy, as global headwinds and rising raw material prices reshaped consumer behaviour.

“FY26 was not a straightforward year for India's consumption economy… Food inflation shaped household choices in ways that went far beyond price,” chairman and managing director Manish Tiwary told shareholders at the company's 67th annual general meeting.

“Families reconsidered pack sizes, purchase frequencies, and category priorities,” he said, adding that challenges remain even after the company reported a decade-high revenue growth in the fourth quarter of FY26 (Q4FY26).

“There will be quarters that test us. There will be bets that don't pay off immediately. That is the nature of building something that lasts,” he said.

Nestlé India, the company known for Kitkat and Maggi, saw its consolidated profit jump 27% year-on-year to ₹1,110.9 crore in Q4FY26, while revenue from operations rose 22.6% to ₹6,747.79 crore.

The company also declared a special dividend of ₹2 per equity share with a face value of ₹1 during the AGM.

Following the news, Nestle India's shares rose on Friday. They were trading over 1% higher on the National Stock exchange at ₹1,461.70 apiece while the benchmark Nifty50 was up 0.40%.

Tiwary said rural demand had improved but remained contingent on monsoon performance and farm incomes, while urban demand continued to be uneven across income groups.

Globally, energy costs, trade disruptions and geopolitical uncertainty kept input costs volatile, requiring constant monitoring, he said.

Going ahead, the company will focus on four pillars for growth: expanding presence in tier-2 and tier-3 towns, consumer-centricity, increasing investment in brands and manufacturing capacity, and accelerating technology-led sales and operations.

Nestle has added about 520,000 outlets in urban, semi-urban and rural markets since April 2023.

In May, Tiwary told Mint that rural markets account for about 23-26% of the company's portfolio, well below the 48-55% seen at many consumer goods peers, leaving significant room for expansion.

Analysts remain optimistic about the company's prospects. “We expect strong results to continue and like Nestle’s innovation, premiumisation and rural expansion,” analysts at Nuvama Institutional Equities said in a 16 June report. “Easing coffee and cocoa prices bode well given current inflation in packaging costs,” they added.