Nestle India targets premiumisation with pet food, kids’ nutrition – The Financial Express

The Financial Express

Nestle India has stepped up its focus on premiumisation with the acquisition of pet food business of Purina PetCare India, and the launch of its global premium toddler nutrition brand Gerber.
Both the categories, according to Nestle have a sizeable market with strong growth potential. Pet food category market for instance is about Rs 4,000 crore at present and is growing at 25%, making it one of the highest growing categories. The market size of toddler nutrition is Rs 3,500 crore and is growing.
“Premiumisation is one of the growth engines for us and pet food business and premium toddler nutrition are steps in that direction,” Suresh Narayanan, chairman and managing director, Nestle India told analysts in an earnings call.
For perspective, if Maggi noodles indexed price is Rs 100 for a kilogram, the average pet food is about `140 and Gerber is Rs 700.“That is the kind of premiumisation that we are talking with these brands, which is significant,” Narayanan said.
While Purina was introduced in India in 2018, Nestle India had steered clear from it as Nestle built the business through a pet specialty distribution network, and with none of Nestle India’s products getting sold through that channel, the Indian arm stayed away from it and let the parent invest in the business in order to get it started. Purina’s business has been driven by specialist channel distribution network in 46 towns with 50 distributors and 185 suppliers over the last four years.
However, Narayanan said that the market has evolved since then.“With pet adoption on the rise post the pandemic, there is an estimated 30 million pets in India and growing at 11% per annum across all town classes, which means three million pets are getting added each year. With dogs being the main ownership in India, 75% of the market is dominated by dry dog food, making it the biggest segment. Now, interestingly the wet cat food is also a strong opportunity which is growing at 35%,” he said.
The sales growth has accelerated with 68% increase to 31.2 crore in 2021 and 51% in the first six months of 2022 at Rs 46.3 crore. The business recorded sale of Rs 11.5 crore in 2018. The channel has evolved from a focus on special-ist channels to omnichannel with e-commerce contributing about 14% of sales now.
Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

source