Nestle's products in India are set to become more expensive
What's the story
Nestle India, the local arm of the Swiss multinational food and drink processing conglomerate, is considering a modest price hike for its products.
The decision comes as the costs of commodities such as coffee, cocoa, and edible oil continue to rise.
The company's Managing Director, Suresh Narayanan, confirmed the strategy at an industry conference in Mumbai today.
Strategic approach
Price hikes: A necessary measure
Narayanan stressed that price hikes are a necessary evil but not a panacea for the industry's woes.
"Wherever (price increase) is absolutely essential, we will have to take some pricing action," he said.
However, he also warned against seeing these hikes as the industry's messiah since they could impact volume growth.
The goal is to keep these hikes "as low as possible."
Financial impact
Q4 earnings fall short of expectations
Nestle India's consideration of price hikes comes after its quarterly profit fell short of expectations.
The company's earnings were affected by a slowdown in consumer spending in big cities and higher product prices.
This financial strain was witnessed across corporate India in the October-December quarter, with inflation forcing consumers to cut back on spending.
Economic forecast
India's tax cut plan may boost consumer spending
India's personal income tax rate cut for fiscal 2026 could further boost disposable income and consumer spending.
Despite the overall slowdown, affluent Indian consumers continue to splurge on hyperfast delivery platforms like Swiggy's Instamart, Zomato's Blinkit, as well as Zepto.
These platforms have drastically affected traditional sales channels in big cities.