Diversifying in troubled times: Nestle India to go organic with multigrain cereal launch

18-Jun-2019 - Last updated on 18-Jun-2019 at 23:58 GMT

Nestle India is looking to enter the country’s organic products market with its upcoming Ceregrow Organic Selection range of cereals. ©iStock

Nestle India is looking to enter the country’s organic products market with its upcoming Ceregrow Organic Selection range of cereals.

In a statement to FoodNavigator-Asia, Nestle India told us that: “We are introducing [the] Ceregrow Organic Selection, [an] organic cereal made from 100% organic ragi, organic wheat, organic milk and organic rice.”

Although the spokeswoman declined to release further details about the product launch as of yet, she did reveal that each 200g box of the product would be priced at INR350 (US$5.04).

Ceregrow Organic Selection is being manufactured from the company’s Samalkha Factory in Haryana, where multiple standard and quality control processes will need to be observed in order for it to obtain organic certification in the country.

Two major organic logos that businesses need to observe in the country are ‘India Organic’ by the Agricultural and Processed Food Products Export Development Authority (APEDA) and ‘Jaivik Bharat’ by the Food Safety and Standards Authority of India (FSSAI).

“In order to ensure Ceregrow Organic Selection [will obtain and maintain] the ‘India Organic’ and ‘Jaivik Bharat’ logos along with SGS certification, [we are] committed to maintaining the highest quality standards and our multiple quality checks ensure that we meet the unique requirements of organic food,” added Nestle India.

In a statement to media, Nestle India Chairman and Managing Director Suresh Narayanan added that: “We are working with farms with expertise in organic farming [to] procure organic raw materials.”

Troubling times in rural markets

Narayanan added that weather concerns and a downturn in rural demand were amongst issues that the company was keeping tabs on.

“Overall from the FMCG industry perspective, there has been a rural slowdown, with issues due to credit flows in the market and aberrations with certain channels,” he said.

India is predicted to experience a monsoon below normal levels this year, which he believed would further drive down consumer demand in rural areas, in addition to affecting agricultural commodity prices.

“[That said,] it’s too early to say that it’s a systemic issue and I believe the fundamental view on strong consumption led-growth cannot be dismissed.”

India tops fastest-growing list for Nestle

Separately, Narayanan told Orissa Post that Nesle India had topped the list last year as Nestle’s fastest growing key market globally.

“We are the fastest growing key market for Nestle in the world in 2018. We grew at 10.9% in the local currency terms,” he said.

Nestle India reported INR113mn (US$1.6mn) in terms of revenue last year, securing a position as one of the company’s top 15 markets worldwide.

As such, the organic portfolio expansion was described by Narayanan to be just ‘a beginning’ within the company’s diversification strategy, rapidly creating and adding new products into its portfolio.

“[We] will look at ways and means of expanding our portfolio in the whole organic area - organic is a worldwide trend but is relatively nascent in India,” he said.

“Organic food brings together the core disciplines that Nestlé is known for in its food and nutrition space. We have been working on this for two years now.”