Nestle India Looks for Volume-Led Growth Despite Price Volatility Amid Geopolitical Uncertainties

FMCG major Nestle is concerned over 'volatility' in prices due to rising input costs amid geopolitical uncertainties, even though it chases a volume-driven growth in the new fiscal, said its Chairman and Managing Director Manish Tiwary.

The maker of Maggi noodles, Nescafé and KitKat struck a cautious note, saying it will "wait and watch" as "nobody can predict the situation two months down the line" amid "geopolitical tensions, some concerns around the monsoon", and fluctuating commodity costs.

Nestle India remains focused on expanding consumption and penetration, with a strategy centred on driving volumes while offering better value to consumers and leveraging technology to improve operational efficiencies, he said.

"Times are volatile. It's a difficult thing for anyone to predict what's going to happen even two months down the line," Tiwary told PTI in an interaction.

He did not mention any immediate price hike, but said volatility in the market due to current geopolitical tensions is creating cost pressure as there is a surge in raw materials and crude-linked packaging rates.

The bulk of Netsle's production is done in the country, and more than 97 per cent of our own material is sourced locally, he said.

Nonetheless, this "would still not insulate us from further inflation" as it will depend on how the political situation changes in the Middle East.

"So, that is something which we have to be ready for. So, that's a little bit of a yellow flag in the future which we see," he said, adding the company will also internally try to optimise through cost efficiencies.

Most FMCG companies have announced a fresh round of price hikes of around 3 to 5 per cent in the March quarter, on account of a 15-20 per cent surge in raw material costs, high crude oil prices that are impacting packaging, and a weakening rupee.

On Thursday, the CEO and MD of leading FMCG firm HUL, Priya Nair, said it will implement "calibrated price increases" to manage rising input costs due to a surge in raw materials and crude-linked packaging rates.

Tiwary noted that despite volatility, Nestlé India has seen "the right momentum" led largely by volume growth across its businesses during FY26. The company also stepped up advertising investments significantly in the second half of the fiscal year to support its core brands.

When asked about Nestle India's outlook for FY27, he said: "We will continue to look at volume, let penetration grow.

According to Tiwary, Nestle's strategy to invest behind core brands to drive volume-led growth, backed by a disciplined cost optimisation with leveraging technology, is paying dividends.

"Going forward, we continue to stick to our strategy to drive volume-led growth, fuelled by investment behind this brand, and we will continue to be very disciplined in our execution," he said.

Besides, Nestle India is also open to acquisition if it finds the right fit.

"This is a very comprehensive portfolio to sort of take our business to the next four to five years. At the same time, there is a team which keeps on looking at new spaces, possibly to see acquisitions," he said.

Nestle India, which is expanding its presence in the rural market as per its 'Rurban' strategy, has taken distribution spokes from 25,000 to 45,000.

"I think my rural market, the rural business, will grow much faster than the overall sales," said Tiwary.

Nestle, which is opening its tenth India factory in Odisha, will continue to invest in volume-led growth, which also gives leverage for cost optimisation. "So, we will continue to invest. We see that demand in the country," said Tiwary.

Nestle India's total revenue in FY26 was at Rs 23,194.95 crore, up 14.46 per cent year-on-year. Its Q4 profit was also up at Rs 1,110.9 crore, while revenue from the sale of products was at Rs 6,723.75 crore.