If everybody is looking at survival as an instinct, being able to make my next week's sale, if that is going to be the only survival instinct that you have, you cannot think three years on, five years on. So the task of leadership is to get the mindset into a thriving mode and to look at opportunities rather than survival mode.
Penetration levels are still and I will come to that relatively modest, not to say they are low, but they are modest and I think there is still an opportunity. So, therefore, whether we call it the bird of gold which was a McKinsey report or whether we call it the rise of India's new middle class or whether we call it creating the $6 trillion opportunity, all of this is pointing to the fact that there is a larger number that is there that still is leaving a lot of room, headroom for growth.
I've never once told my people, please correlate GDP growth with your growth. It's meaningless. Whether the GDP grows at 6% or 60%, my penetration levels remain at 40% to 50% to maybe 80% on an annual basis. I still have enough headroom and I play with the math 800 billion total market, 41 billion packaged branded package F&B, 1:20 is the play that we've got.
The Company of the future is going to be a Company that is going to be not just brand marketing, but brand marketing with a very strong service arm. Today we have brands first digital following companies. Very soon it's going to be digital first brands following companies. The digital first will become a more important imperative for brand choice than the brand itself. That's how this industry is evolving as we look forward.
Supplier networks, I think Empire Packaging has been with the Company for 45 years. 45 years he has been with the Company, he is one of the big suppliers and Mr. Kannan, there on the right, who supplies seals as far as our Cuppa packs are concerned.
One of the things we have issued as a Company, there was a time seven, eight years ago, when on NESCAFÉ, 25% to 30% of our money used to go behind consumer promotions, short-term incentives. Today, less than 10%. We said, we'll build the equity of the brand.
10 Mantras for Future -
- Consistent balance between growth and profitability.
- Expanding the opportunities with the new consumer cohort.
- Strong investments in manufacturing and supply chain.
- Expanding and accelerating RURBAN thrust.
- Invest in long term partnerships.
- Embracing the power of analytics and digitization.
- Accelerating our sustainability journey.
- Nutrition as a platform for innovation.
- Enable strong impact on communities.
- Focus on people, diversity, talent, and managing the generational shift.
Noodles is one of the big businesses for Nestlé. We do around half a million tons of noodles. The region here is one of the core drivers there. Intel inside why noodles work well, why we are able to deliver is what comes from the seasoning or the spices. And India being the core region where Nestlé sources almost half of its spices from, therefore becomes key for us to develop expertise in this part that we can then roll out to all the markets that we work with.
4 Core areas to drive growth -
- Alternate grains and proteins.
- Coffee
- Nutrition -- early life to aging population.
- Nutrition for Pets.
We do have the local competition. Let me take coffee for example. There have been players who have come in. But one of the things in coffee is that when the prices of coffee beans are as high as they are, it does not really give much play for the local player to come in with a cut price and hope to make a deal. Because the fact is that, you will be incurring serious losses if you were to do that.
In the area of the MAGGI portfolio, only where there is acute price competition, there has been some loss of volume, but this is a category, which is fairly sensitive in terms of quality and safety. So, consumers also are pretty careful not to just try any masala simply because it is there in the market.
NESPRESSO is definitely a business that is of interest to us. I think there are a few regulatory and duty related issues on that, that need to be navigated and represented, which is what we are in the process of.
Pet care continues to be an area of serious interest. It's a category where we have global expertise and it is a category where we will have the full play in the coming months and years as far as the category itself is concerned.
