Nestle rejigs sales structure with focus on modern retail
The Rs 2,800-crore foods major Nestle India is in the process of reorganising its sales structure to service and address the complexities posed by emerging trade channels, in line with a trend that's being adapted by most FMCG companies.
By Ratna Bhushan, TNN |
NEW DELHI: The Rs 2,800-crore foods major Nestle India is in the process of reorganising its sales structure to service and address the complexities posed by emerging trade channels, in line with a trend that's being adapted by most FMCG companies.
Nestle has created two new divisions – channel and category sales development and national key accounts management organisation – to focus on modern formats in retail trade. "This will help us respond faster and in a more focused manner to consumer expectations," the company said.
This is the second internal reorganisation exercise Nestle has undertaken in two years. Last year, it had realigned internal company structures by creating category-specific business units, to cater to individual product categories such as culinary (Maggi noodles and ketchups), chocolates and confectionery (KitKat, Munch, Polo), coffee and beverages (Nescafe, iced tea, Milo) and dairy and nutrition (dahi, UHT milk, Cerelac, Nan).
Nestle has identified complex supply chain configurations among its weaknesses, while recognising potential for expansion in smaller towns and development of modern retail formats. With modern trade networks becoming increasingly specialised and complex, almost every FMCG company, from Hindustan Unilever to P&G to Dabur, has been setting up independent supply chains and sales organisation divisions.
"Modern trade accounts for just 3-4% of total FMCG business. The industry has a long way to go," said a Mumbai-based FMCG analyst. On the product front, the company has identified dairy as a strategic area for the current year. While the company states that its Dahi has been doubling volumes, its Everyday dairy whitener only managed to sustain its performance last year.
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Meanwhile, analysts point out that UHT milk and flavoured dahi have not performed up to expectations and have been put on close watch. The performance of another slow-moving brand Milo milk food drink, which was relaunched last year, is also being closely monitored. It must be pointed out here that brands such as butter, Choo and Chocostick were withdrawn two years back on account of slow consumer offtake. Maggi, one of Nestle India's star brands, on the other hand, maintained its leadership position in the instant noodles, sauces and ketchups categories, according to the company.
Nestle, in its annual report, states that it has created a nutritional compass, which has been implemented on almost all product packs, to help consumers to make informed choices. "In select areas, this communication was rolled out through an in-store initiative titled Nestle Nutriworld," the company states.
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