The Silicon Review ^Asia

Recently Nestle India has announced of its plans to dive into the organic food segment in a move to grab more consumers and opportunities while boosting up its food and nutrition portfolio. In order to do that, Nestle will make three product launches in the category of organic foods which will include an organic version of its cereals brand, Ceregrow.

Suresh Narayanan, Chairman and Managing Director of Nestle India, said that the issues arising out of credit flows in the market and aberrations with certain channels have led to a rural slowdown, looking at it from the FMCG industry perspective. However, it will still be too soon to jump to the conclusion that it is a systemic issue, he says, adding that he believes the fundamental view on strong consumption led growth cannot be dismissed.

Nestle obtains 25 percent of its sales from rural areas while being consistent with its 75 percent sales from urban regions. But the less than normal levels of monsoon have a chance in affecting its sales as far as the demands in the rural areas are concerned.“We are working with farms with expertise in organic farming capabilities in Rajasthan, Andhra Pradesh and Karnataka, to procure organic raw materials. Now that we have built expertise in terms of sourcing and procurement, we will look at expanding our organic food portfolio”, said Suresh Narayan. Currently, the FMCG industry is experiencing certain issues regarding the slowdown in rural demands, but Nestle has managed to take its growth to a double digit in its sixth quarter.