Nestle India will sharpen its focus on penetration-led volume growth by expanding its distribution network deeper into rural and smaller towns, as the FMCG major looks to drive sustainable growth despite an uneven consumption environment marked by high food inflation and patchy rural demand.
Addressing shareholders at the company’s 67th annual general meeting (AGM), Chairman and Managing Director Manish Tiwary said long-term growth in India would come from reaching more households and increasing purchase frequency.
“Sustainable growth in a country as large and dynamic as India must come from reaching more households and the frequency with which consumers choose our brands,” he said.
The board declared a special dividend of ₹2 per equity share, to be paid along with the final dividend that was approved by shareholders.
Expanding the Grid
Tiwary said the company has added around 520,000 retail outlets across urban, semi-urban and rural markets since April 2023, strengthening its distribution footprint as it targets the next phase of consumption growth. Rural India, where aspirations are rising, will remain a key focus area, supported by deeper reach, sharper pack-price architecture and stronger execution at the point of sale, he said.
The company is also enhancing its bets on tier-2 and tier-3 towns, where consumption is growing faster than in larger cities. It plans to expand its portfolio across multiple price points while continuing to premiumise products and deploy technology and data to improve sales execution and consumer reach.
Tiwary said the company’s long-term strategy will remain anchored around four priorities— consumer centricity, penetration-led volume growth, reinvestment behind brands and manufacturing capacity, and technology-enabled sales and operations. Data and digital tools are being deployed across the supply chain, sales and distribution to improve forecasting, planning and execution, he said.
The remarks come against the backdrop of a challenging year for the consumption sector. Tiwary said food inflation had altered household buying behaviour, with consumers reassessing pack sizes and purchase frequency, while rural demand remained dependent on monsoon outcomes and farm incomes. Urban demand, meanwhile, remained uneven across income segments, even as geopolitical uncertainties and volatile freight and energy costs continued to pressure input prices.
Despite these headwinds, Nestle India reported its highest-ever domestic sales of ₹23,071 crore during FY26, Tiwary said. The company also outpaced industry volume growth throughout the year, he added.
Reinvesting Efficiencies
The FMCG major said that it had generated its highest-ever operational cost savings during the year, which were reinvested in advertising, digital outreach, distribution expansion and manufacturing capacity. It has committed about ₹2,000 crore towards capacity expansion over the past two years, including a greenfield manufacturing facility in Odisha.
Highlighting brand performance, Tiwary said India has become the largest market globally for KitKat, while the company continues to scale its ready-to-drink cold coffee portfolio and newer businesses such as Nestle professional and pet food.
He added that about 92% of Nestle India’s sourcing is now domestic, covering wheat, coffee, milk and other agricultural inputs.
Responding to shareholders’ queries, Tiwary said brands such as Maggi, Nescafé and KitKat recorded double-digit growth during the year.
On the nutrition business, which had a relatively softer year, Tiwary said the category showed sequential improvement in the second half and gained market share despite external challenges. Milk products and nutrition currently contribute around 33% of the company’s overall portfolio by value, he said, adding that investments in science-led innovation and premiumisation would continue.