Group Project- Group 5

Sales & DistributionManagement

NESTLE

Name PRN
Harmeet Sandhu 22020841154
Jahanvi 22020841014
Muskaan Agarwal 22020841162
Harishankar 22020841020
Digvijaysingh Patil 22020841104
 About Nestle
Nestlé S.A. is a Swiss multinational food and drink processing conglomerate corporation
headquartered in Vevey, Vaud, Switzerland. It has been the largest publicly held food
company in the world, measured by revenue and other metrics, since 2014. Nestlé's products
include a wide range of foods and beverages, including coffee, confectionery, dairy products,
and baby food. The company was founded in 1866 by Henri Nestlé, a German-born Swiss
confectioner. Nestlé's origin dates back to the 1860s when two separate Swiss enterprises
were founded that would later form Nestlé. In the following decades, the two competing
enterprises expanded their businesses throughout Europe and the United States.

Today, Nestlé employs over 270,000 people worldwide and has over 2,000 brands in its
portfolio. Nestlé is a global company with operations in over 191 countries. The company
generates over CHF 94 billion in revenue each year. Nestlé has been criticized for a number
of its business practices, including its marketing of breast milk substitutes in developing
countries and its use of child labor in its supply chain. However, the company has also been
praised for its efforts to improve nutrition and sustainability.

Overall, Nestlé is a major player in the global food and beverage industry. The company has a
wide range of brands and products, and it operates in over 191 countries. Nestlé has been
criticized for some of its business practices, but it has also been praised for its efforts to
improve nutrition and sustainability.

Product group of Nestle:

1. Milk Product & Nutrition

2. Prepared Dishes & Cooking Aids
3. Powered & liquid Beverages
4. Confectionery

Nestle in India
Nestlé entered India in 1912 by importing and selling finished products. After India's
independence in 1947, the Indian government emphasized the need for local production.
Nestlé responded to this by forming a company in India and setting up its first factory in 1961
at Moga, Punjab.

Despite challenges such as import restrictions and cultural differences, Nestlé was able to
establish itself as a major player in the Indian food and beverage market. The company's
success was due in part to its focus on local production and its willingness to adapt its products
to the Indian market. For example, Nestlé introduced a range of nutritional products
specifically designed for Indian children.
Today, Nestlé is one of the largest food and beverage companies in India. It has over 8,000
employees and operates nine factories across the country. The company's products include a
wide range of foods and beverages, including coffee, confectionery, dairy products, and baby
food.

Mission

To unlock the power of food to enhance quality of life for everyone, today and for generations
to come.

Vision

To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved

shareholder value by being a preferred corporate citizen, preferred employer, preferred
supplier selling preferred products.

Product Portfolio of Nestle

 Past 5 years Sales Data of the Product Groups of
Nestle India

(Class – Wise details) Sales Data

Product Group FY 2022 FY 2021 FY 2020 FY 2019 FY 2018

(Rs. In (Rs. In (Rs. In (Rs. In (Rs. In
million) million) million) million) million)
Milk Product and 69157.3 62686.3 61487.8 56518.1 51876.3
Nutrition
Prepared dishes and 53005.7 45813.1 39108.2 34981.8 31052.5
Cooking Aids
Powdered and 20187.8 16918.2 14762.5 15017.9 15226.1
Liquid Beverages
Confectionery 26544.5 21231.4 17543.1 16434.9 14007.4

Total Sales 167,895.3 416,649.0 132,901.6 122,952.7 112,162.3

Double-Digit Growth Across All Categories

14.8% Domestic Sales Growth
• Volumes plunged sharply in CY15 due to the Maggi crisis. Volume growth in CY16 and CY17 may
be attributed to the recovery from the trough of CY15 (the company started emerging
completely out of the crisis only in 2HCY16). Amid a weak operating environment, NEST’s 5.2%
volume growth in CY22 (despite a high base of 10.2% growth) is rather commendable.
 Market Share of the Product Groups of Nestle India

Product Lines of Nestle India Relative Market Share

Milk Products and Nutrition 20%
Prepared Dishes and Cooking Aids 12%
Powdered and Liquid Beverages 25%
Confectionery 15%

Relative Market Share of

Nestle India's Product Lines

25%

20%

15%
12%

MILK PRODUCTS & PREPARED DISHES & POWDERED & LIQUID CONFECTIONARY
NUTRITION COOKING AIDS BEVERAGES

Relative Market Share

As you can see from the table above, Nestle has the largest relative market share in the
powdered and liquid beverages category, followed by milk products and nutrition. The
company has a smaller relative market share in the prepared dishes and cooking aids and
confectionery categories, but it is still a major player in these markets.
Overall, Nestle is a global leader in all of the product categories listed above. The company's
strong market share is due to a number of factors, including its wide range of products, its
strong brand recognition, and its global distribution network.

Source: Euromonitor International

 Nestle India has a number of star products with top market share in
India. Some of these products include:

Maggi instant noodles

• Maggi has a market share of over 60% in the Indian instant noodles market. Its closest
competitor, ITC's Yippee, has a market share of around 20%.

KitKat chocolate
• KitKat is the leading chocolate brand in India, with a market share of over 20%. Its closest
competitor, Mondelez's Cadbury Dairy Milk, has a market share of around 15%.

Nescafe coffee
• Nescafe is the leading coffee brand in India, with a market share of over 60%. Its closest
competitor, Hindustan Unilever's Bru, has a market share of around 20%.

Cerelac infant cereal

• Cerelac is the leading infant cereal brand in India, with a market share of over 90%. Its closest
competitor, Abbott's Similac Infant Cereal, has a market share of around 5%.

Lactogen infant formula

• Lactogen is the leading infant formula brand in India, with a market share of over 20%. Its
closest competitor, Abbott's Similac Infant Formula, has a market share of around 15%.
Sales Forecasting from last 5 years
NESTLE’S HIERARCHY

DISTRIBUTION PROCESS IN INDIA

DISTRIBUTION HIERARCHY IN INDIA
 Productivity of the Salesforce

As observed the Sales data from the Annual Report of Nestle India 2022:

Nestle India's total sales in 2021-22 were INR 167,895.3 million.

Nestle India has around 8,000 salespeople.

Therefore, the estimated productivity of the sales force of Nestle India in 2021-22 is:
INR 21 million per salesperson.
MRP CALCULATION OF NESTLE PRODUCTS
 • Productivity of Sales Force

Total Sales force (2022) 2,80,000

Total Sales (FY 2022) 102.59 Billion
Sales Force Productivity 102,590,000,000 / 2,80,000
366,392$

• Debt-Turnover ratio calculation

Debtor Turnover Ratio = Net Credit Revenue/Average Bills Receivables; wherein –

Average Bills Receivables = (Closing amount of bills receivables + Opening amount of bills receivables) / 2

Credit Period = 360 / Debtor Turnover Ratio

Sales for the year 2021 102.59 Billion

Average accounts receivable 1,255
DTR 81.2
Average collection period 360/98.5 = 4.43

From this we can see that the efficiency in converting account receivables to cash is high and the credit
period is relatively low.