Nestle India considering price hikes to counter commodity inflation

Nestle India will consider raising prices of its products by a small margin to counter inflation in coffee, cocoa and edible oil while aiming to keep sales coming in, a top executive said on Monday.

Profits at Corporate India came under pressure in the October-December quarter due to the double whammy of consumers cutting back due to inflation in large cities and high prices of commodities.

"Wherever (price increase) is absolutely essential, we will have to take some pricing action," Nestle India Managing Director Suresh Narayanan told Reuters at the sidelines of an industry conference in Mumbai.

The company, which makes the Nescafe brand of instant coffee, will keep the price hikes "as low as possible," Narayanan said, adding that "price increases are not the salvation for the industry because it impacts volume growth."

India's plan to cut personal income tax rates in fiscal 2026, unveiled earlier this month, is expected to put more disposable income in the hands of the people and eventually boost consumption.

Affluent consumers in India, however, have been splurging, including on hyperfast delivery platforms such as Swiggy's Instamart, Zomato's Blinkit and upstart Zepto.

While these platforms have eaten into the market share of traditional sales channels in large cities, Nayaranan pinned the chances of them maintaining their growth rate on how the models work in the longer term, given they are still making a loss.

Last month, Nestle India, the Indian arm of the eponymous Swiss consumer goods giant, reported a smaller-than-expected quarterly profit, hit by a slowdown in consumer spending in major cities and higher product prices.