Dipping into dips: Nestle India enters new segment amid price hike considerations

By Pearly Neo contact

- Last updated on GMT

Nestle India has taken a dip into the gourmet dip and spread segment with its latest product offering, Maggi Dip & Spread.
Nestle India has taken a dip into the gourmet dip and spread segment with its latest product offering, Maggi Dip & Spread.

Related tags: Nestle, India, Spreads, price hike

Nestle India has taken a dip into the gourmet dip and spread segment with its latest product offering, Maggi Dip & Spread. This comes amidst the company’s mulling of ‘some price increase’ in ‘some categories’.

The new Maggi Dip & Spread products have a low-fat yoghurt base, containing ‘almost 80% yogurt with less than 3% fat’​.

Nestle India told FoodNavigator-Asia ​that as of now, these products have only been launched in Delhi as “we are following a phase-wise launch approach”.​ Two flavours formulated for local Indian tastes are available: Cheese Garlic and Jalapeno Salsa.

“Yoghurt based low fat MAGGI Dip & Spread is an entirely new category for us which will offer […] a whole new experience,” ​said Arvind Bhandari, Nestle India General Manager, Dairy.

“The increasing eating-out culture and aspiring India's growing appetite for global cuisines are leading to the trend of cooking unconventional and international dishes at home.

“We would like to tap this opportunity and emerge as a significant player in the segment with promise of convenience, health and exotic taste of dip and spread with different food types."

The main target consumer demographic for this product are millennials between the ages of 25 and 35.

According to the official press release, the product ‘signifies the emergence of a new category in the seasoning segment in India’​.

“[The product] has been conceptualised [based on] in-depth consumer research,”​ it said, although the company declined to reveal further details on this research.

Price hike considerations

On the other hand, Nestle India is also considering what is said to be a minimal price hike that would affect ‘some categories’​.

Suresh Narayanan, Nestle India Chairman and Managing Director told Firstpost​ that: "If there is a sustained impact [due to input costs] on wheat, packaging material and possibly on milk going forward, it would affect quite a few categories in the company."

"[S]electively in some categories, there could be some price increase,"​ he added, although no information was provided about the possible quantum.

"It is very difficult to specify the timings but all these are moving in tandem. We just have to see to the extent to which these pan out will determine the extent to which we will absorb it or not absorb it, it will determine the time."

Among the rising input costs affecting this contemplation are raw material (wheat, milk) prices, and increasing packaging prices due to rising crude oil prices and the Indian rupee’s poor performance against the US dollar.

Expansion and growth

That said, Nestle India is also looking at further expansion plans, both in existing production and new locations.

"Expanding in existing factory amortises the services cost in setting up infrastructure but there could be other sites as well, we could look at,"​ said Narayanan.

"It's an active subject seeing the sustained performance."

Nestle India controls approximately 50% of the domestic instant coffee market via its coffee brand Nescafe. It reported domestic sales growth estimated to be around 11.8% in 2017, part of which has been attributed to the “rebuild of Maggi Noodles”.

Earlier this year, Nestle India collaborated with Walmart-owned Flipkart​ to launch its Maggi Special Masala Noodles.

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