Daijiworld Media Network - Mumbai
Mumbai, May 3: Nestle India has indicated that it may resort to price hikes if input costs continue to rise, as the ongoing West Asia conflict begins to impact commodity and operational expenses.
Company Chairman and Managing Director Manish Tiwary said the firm has so far focused on volume-led growth but may be forced to adjust prices depending on how inflation trends evolve. “If cost pressures persist, we might have to make some price adjustments,” he said.
The maker of Maggi, Nescafe and KitKat has been witnessing mixed commodity trends, with prices of essentials like milk and wheat rising, while fuel-related costs—linked to the geopolitical situation in West Asia—have emerged as a major concern. Increased expenses in packaging, utilities and palm oil have added further pressure on margins.
Despite these challenges, Nestle India has largely relied on strong volume growth to drive performance, reporting robust double-digit expansion in the March quarter. The company has prioritised cost optimisation and efficiency gains over immediate price increases, maintaining that hikes remain a “last resort.”
However, the uncertain global environment has prompted a shift in strategy. The firm acknowledged that it may need to rebalance its growth mix towards pricing if input costs continue to climb due to geopolitical tensions and volatile crude-linked expenses.
Industry-wide, fast-moving consumer goods (FMCG) companies are facing similar pressures, with many already implementing price hikes or adjusting pack sizes to offset rising raw material and logistics costs triggered by the conflict.
Nestle India, however, said it is avoiding shrinkflation strategies and remains committed to maintaining product quality and consumer trust, even as it closely monitors evolving cost dynamics.
The development signals a potential increase in retail prices of everyday consumer products if global uncertainties persist, with the final impact depending on commodity trends and the trajectory of the West Asia crisis.