Major consumer goods companies such as Nestle, Dabur, Coca-Cola, Mondelez, and Procter & Gamble are committing substantial investments in India despite prevailing demand challenges. This is in a bid to strengthen capacity and introduce premium offerings.
Nestlé’s chairman, Suresh Narayanan, revealed a significant increase in capital expenditure, allocating 7-8% of turnover, with investments totalling ₹6,500 crore until 2025. Dabur has announced its second-highest capacity expenditure in India, earmarking ₹135 crore for a new plant in South India, targeting growth in both urban and rural markets.
Coca-Cola’s bottling partner, Hindustan Coca-Cola Beverages (HCCB), is injecting ₹3,000 crore into Gujarat for manufacturing juices and aerated drinks by 2026. Meanwhile, Procter & Gamble and Mondelez are progressing with investments of ₹2,000 crore and ₹4,000 crore, respectively, in new facilities, poised to become operational in the coming years.
Despite subdued demand for mass products, particularly attributed to factors like inconsistent rains and food inflation, companies remain optimistic about a resurgence in demand in the upcoming fiscal year. This optimism stems from factors such as expected income injections into the economy, the approaching general elections, increased capital expenditure, and stabilizing commodity prices.
Consumer goods giants are strategically positioning themselves to leverage growth opportunities, targeting premiumization and innovation to navigate the current market landscape and emerge stronger in the post-pandemic era.