Food inflation is still a cause for concern, says Nestle India’s Narayanan
Suresh Narayanan, chairman and managing director of Nestle India, said consumer demand at the moment remains ‘stable and robust’
New Delhi: Packaged food company Nestle India on Thursday said it needs to monitor the specter of food inflation after a deficit rainfall in August is expected to impact kharif crop sowing. However, Suresh Narayanan, the chairman and managing director of Nestlé India, said consumer demand at the moment remains “stable and robust”.
“Now, it is seeming reasonably clear with the deficit of monsoons, already reported at 30%, even if kharif sowing is good, kharif productivity might get impacted. And with this el-nino effect, still not having fully played out, we still have to watch for the specter of food inflation. There will be pressure in terms of food inflation, headline inflation will get mitigated because of the various steps that the government will take but food inflation is still a cause for concern,” Narayanan told reporters on Thursday.
To be sure, the erratic progress of the southwest monsoon has resulted in a spike in the prices of the domestic food basket, ratings firm CareEdge said in a report. Meanwhile, August rainfall deficit stood at 36%. As a result, overall monsoon rain is in IMD’s ‘below normal’ category with 10% below the benchmark long period average during 1 June-31 August, Mint reported on Thursday. “On the one hand, excess rainfall over a short period has resulted in flooding in certain parts of India, adversely impacting the production of certain crops; on the other hand, significant deficit rainfall in certain pockets has adversely affected the sowing activity,” CareEdge Ratings said in a note dated 29 August.
Nestle's products rely on a variety of commodities such as milk, edible oils, coffee, wheat and sugar.
In the June quarter—Nestlé’s rural sales growth outpaced urban markets in the with the company expanding its rural footprint. To be sure the maker of Maggi noodles draws 20% of its sales from rural markets. "Immediately put I would not say that something alarmist is happening, in terms of commodity prices. But we will have to watch this space, i.e. how this evolves—the impact being really for 2024, rather than an immediate impact,” he added, saying that at the moment, things are looking stable. “Overall, demand is fairly stable and robust. One can look forward to a good festival season,” he said.
On Thursday, the company announced the launch of millet-based ready to make meals under its a+ brand reinforcing its presence in the packaged and convenience foods space. The company will further extend the use of millets to products such as beverages and packaged noodles. It already sells breakfast cereals infused with ragi. Nestlé R&D Centre India Private Limited, Manesar (a subsidiary of Nestlé S.A and a part of Nestlé’s global R&D network) signed an MOU with Nutrihub-IIMR with an aim to collaborate in areas such as millet processing, health and nutrition benefits, millet sustainable regenerative agriculture practices and start-up collaborations.
"In line with the government focus on millets, Nestlé India is creating a differentiated food portfolio across brands that promotes millet as a more sustainable food option, through partnerships and product innovations. As a part of this initiative, Nestlé India has launched Nestlé a+ Masala Millet that contains bajra,” the company said. A single-serve pack priced at Rs. 30 for 40 gm.
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First Published:1 Sep 2023, 01:01 AM IST
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