#Nestle top boss clarifies on sugar in baby food, says no question of treating Indian babies unfairly.
Watch Chairman & MD Suresh Narayanan in conversation with Tamanna Inamdar on earnings, and more. #NDTVProfitLive
Watch Chairman & MD Suresh Narayanan in conversation with Tamanna Inamdar on earnings, and more. #NDTVProfitLive
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00:00 Is this a result of benign sort of input prices as far as milk etc. is concerned or have you
00:08 seen demand ticking up?
00:09 Can you give us a sense of what has clicked?
00:12 Look, I think, you know, overall the domestic sales at 9% and the overall sales at 9.3%
00:22 we believe has been a credible performance.
00:26 And I want to thank all the partners, distributors, farmers, consumers, everyone and my employees
00:33 too for this performance under very challenging circumstances.
00:39 The growth has been kind of secular.
00:41 At Milk and Nutrition, I've had very encouraging growth.
00:46 But so has prepared dishes.
00:47 You know, the 9% has about 4 to 5% of volume growth.
00:52 And the prepared dishes category which is Maggie has got a higher volume growth than
00:56 that, almost at 6% plus.
01:00 So therefore, it has been Milk and Nutrition and prepared dishes.
01:07 And the other contributor which is albeit at a low single digit which is chocolates
01:15 and confectionery is on a base of 25% growth in this comparable quarter last year.
01:20 So despite a very high base, it has still grown very well.
01:25 And also coffee and beverages has performed extremely well during this quarter.
01:31 And the auto firm business which is Nestle professional as we call it has also had a
01:36 strong double digit growth during the quarter.
01:39 So it's been kind of to varying degrees, but has been secular growth across the company.
01:47 And do you see this sustaining in terms of, I'm trying to understand what the rural
01:50 demand sort of pattern has been.
01:53 And do you see this sustaining considering now you will be seeing headwinds in terms
01:57 of input costs, coffee prices, cocoa prices, etc.
02:00 Hot summer that means milk price is also likely to go up.
02:05 Look, I think at the moment milk prices are stable, wheat prices outlook is stable, oils
02:12 are stable.
02:14 The one where there is runaway inflation is cocoa and coffee.
02:19 And one is trying to see how best to mitigate to avoid serious price increases in them because
02:24 we are back to volume growth now and I don't want to compromise it by taking sharp price
02:31 increases.
02:32 Rural has a relatively smaller play for us than about 20% of our business, but has been
02:40 growing quite well.
02:42 Despite the current context, we still have double digit growth in rural markets.
02:47 And that's because of the relatively lower level of penetration.
02:50 We are still in the game of expanding our village distribution, almost 200,000 villages
02:56 is what we reach now from a comparable of about 20,000 odd villages a couple of years
03:01 ago.
03:02 And I think distribution expansion, penetration and building scale is giving us relatively
03:09 good growth there.
03:11 The inflation context we hope remains relatively stable.
03:18 Food inflation has been high and that has been one of the reasons why the consumption
03:24 economy also has not done as well as it should have.
03:29 But I think going forward with a good monsoon, I believe that we should be with a new government
03:34 in place with more policies on spurring consumption.
03:41 We might be on to better times ahead.
03:44 Okay.
03:45 So my big takeaway from there that no increase in coffee, cocoa prices, you know, passing
03:49 them on for now.
03:50 We'll have to wait and see where that goes.
03:54 But let me come to you on sort of the hot potato issue.
03:57 It will all depend on how it evolves.
03:59 Okay.
04:00 Yeah.
04:01 Okay.
04:02 Let me come to you on the hot potato issue of baby food and the sugar in baby food.
04:08 Now this survey showed that the same baby food in some nations is lower than in India.
04:16 Now you have said in your press conference that you are sticking to what FSSAI guidelines
04:21 are.
04:22 Having said that, is there a different quantum of sugar in baby foods in India versus some
04:27 other countries, Europe, etc.?
04:33 Look I think firstly the whole issue on baby food needs to be looked at in terms of three
04:40 perspectives.
04:41 One is that there is a globally set guideline, globally set, it's not for India alone or
04:47 for Europe alone, globally set guideline on what should be the protein, fat, carbohydrate
04:54 delivery per feed to the infant below 18 months should be.
05:00 So that's a globally set guideline.
05:03 So for example, protein levels are at about 15%.
05:08 Our Cerelac contains about 15% in terms of the energy delivery.
05:14 You got fats at about 20 to 30%.
05:18 Our Cerelac has got 9.4% fat which translates into 20% of total energy.
05:24 Vitamins minerals, there are 10 vitamins and 4 minerals and these are neutral in terms
05:32 of calories.
05:33 Carbohydrates, we need about 50 to 70% should come from the energy of carbohydrates.
05:42 Carbohydrate is where total sugar comes.
05:44 Total sugar is divided into two parts.
05:46 One is sugar that occurs naturally because of the ingredients.
05:50 So milk brings in lactose, wheat brings in glucose and similarly there is fruit juices
05:59 and fruit peris that bring in fructose.
06:01 So there is a naturally occurring sugar which is the majority of the sugar and in the context
06:08 of India, the FSSAI which looks at not just Indian conditions but also looks at codex
06:15 standards.
06:16 So please don't ever think that our regulator is in isolation.
06:23 They are looking at global standards as well.
06:25 They have got a ruling that says that sucrose can be added if it meets up to 20% of the
06:33 carbohydrate requirement of the feed.
06:35 Now that translates into something like 13.6 grams per 100 grams of feed.
06:41 The Nestle product has got 7.1.
06:44 So it's got less than 50% or just about 50% of the amount of sugar that it can contain.
06:50 But sir, does it have more than other nations?
06:52 Does it have more than say what is sold in Germany?
06:55 Well, each one, each one, each, each, each, each, each country has their own.
07:01 There are parts of the world that have got more as well and less as well.
07:05 So it all depends on the, that's why I explained to you the nutrition content delivery of the
07:11 product is as important as what goes into it.
07:16 So if my feed was giving less than what is given by a comparable feed in Europe, then
07:23 you can say that you are shortchanging the children in India.
07:27 That's not the case.
07:28 Okay.
07:29 That's not the case.
07:30 So therefore, I think and even that, even added sugar, even added sugar in the last
07:35 five years, we have made an improvement of 30%.
07:39 And the journey still continues to reduce it even further as we go forward.
07:43 So just to understand, because there was a lot of consternation on this and people who
07:47 are, you know, want to feed their babies are trying to look at this as an issue of is it
07:51 harming.
07:52 So, so you're saying that in the context of what India allows, this is more than enough.
07:56 Is this also because you have cases of malnutrition in Indian children and they need that content
08:01 delivery?
08:02 So this is not any kind of unfair treatment?
08:05 Look, I know firstly, the nutrition requirement that is calibrated is calibrated globally.
08:15 So we are assuming that the Indian child needs as much as the European child.
08:19 Now what you are, what you are stating is only adds to the, to the problem of malnutrition
08:25 of various other things, which means that the babies basically need energy dense foods.
08:30 That is the hard truth.
08:32 So energy dense foods because of their, of the growth spurt, they need that.
08:37 Now here we are having added sugar, but that added sugar also is well within.
08:43 That's why even the FSSAI has put it in place, Codex allows it.
08:47 So therefore it's not that, you know, we should not be conflating this with larger sugar issues
08:54 that pertain as far as various other product categories are concerned.
08:58 This is a limited amount that is, that is given, a small…
09:03 I'll take that last one because I know, you know, I have limited time with you.
09:08 On the question of the larger sugar issues, some companies now have to reword their health
09:13 drinks as fitness drinks.
09:15 As a major, as an FMCG major who also sells an energy drink, now is there a need for more
09:22 transparency for rebranding and for telling consumers in India especially that what they
09:28 are having is not necessarily healthy?
09:31 Look, I think, you know, at Nestle we believe there is nothing called good nutrition and
09:39 bad nutrition.
09:40 It's all about balanced nutrition.
09:41 There are, there are no extremities in nutrition.
09:44 I think a portion controlled bite of chocolate or of any of the other drinks is, is, doesn't
09:53 do you harm provided you don't exploit it and you don't take too many, too much quantities
09:58 of it.
09:59 In the last 10 years, 5 to 10 years, we ourselves as a company, Nestle in India, is part of
10:06 the Eat Right campaign which is sponsored by the FSSAI and we have made reductions in
10:10 sugar by about 10 to 15% of equivalent amount of fat and sodium.
10:16 So this is an ongoing journey.
10:19 The journey must ensure, Tamanna, that we are able to give palatable products, tasty
10:24 products but with lower levels of sugar, lower levels of fat, lower levels of stuff that
10:30 is not necessarily good for you in large quantities.
10:34 But the more important issue is I think this is an education process.
10:38 This is not a knee-jerk reaction.
10:40 Suddenly saying that cut this out and cut that out is going to be only more detrimental
10:45 to the cause of more balanced nutrition as we go forward.
10:48 Okay.
10:49 Thank you so much for your time and for speaking with us.
10:51 Suresh Narayanan, CMD of Nestle India speaking not only on their numbers but also the issues
10:56 of added sugar largely in baby foods was the big headline but across all packaged foods
11:02 as well.
11:03 Thank you, sir, for your time.
11:03 your time.
11:03 [MUSIC PLAYING]