Global consumer product makers to step up investments in India to increase capacity
Writer Admin

Global consumer product companies are betting big on the India growth story. Companies such as Coca-Cola, Mondelez, and Nestle are ramping up investments to increase production capacities. Most of these companies have witnessed strong growth in 2023.

 

Beverage major Coca-Cola saw strong consumer demand in markets such as India in the December quarter. John Murphy, President & Chief Financial Officer, the Coca-Cola Company, said: “A significant portion of our expected capital investment increase is to build capacity for fairlife and for our India business, both of which experienced robust growth in 2023.”

 

Mondelez International, which is known for Cadbury and Oreo, said India unit witnessed “strong double digits” growth in 2023 and the December quarter, which was driven by both chocolates and biscuits. The company’s top management, in a recent earnings call, said that the company is going to have an “uptick in capex,” particularly as it needs to invest in markets such as India to put down more capacity and witnessed “stellar” volume growth over the last five years.

Mondelez has also been ramping up distribution with direct coverage across 2 million outlets in India and indirect coverage in about 3 million outlets. “So we’re in 5 million of the 9 million stores in India,” the company’s management noted.

Earlier this month, Nestle India Chairman and Managing Director Suresh Narayanan reiterated that the packaged food major’s investments plans till 2025 are on track. Between 2020-2025, Nestle will end up making investments to the tune of ₹6,000-6,500 crore, a significant ramp up compared to previous years.

Stating that emerging markets are turning into a real growth engine, beauty major L’Oreal stated that India is now in the top 15 markets globally. “India and Indonesia alone will see an incremental 250 million people join the global middle class by 2030. And they are very quickly becoming very beauty-savvy, looking for increasingly sophisticated beauty routines. And we have what it takes to continue to outperform, our well-established local footprint enables us to better understand and cater to consumers’ needs,” Nicolas Hieronimus, Chief Executive Officer, L’Oreal Group stated in an earnings call.

While acknowledging some headwinds in the market, Unilever’s management on a recent earning call, said, “Hindustan Unilever remains a powerhouse” with strong brands and distribution. The company said it will continue investing behind its brands and capabilities in India.

This comes at a time when urban consumption has been outpacing rural growth and organised players have seen heightened competition from regional and unorganised players. 

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