Nestlé looks set to take on Kellogg's and PepsiCo in India

By Jane Byrne

- Last updated on GMT

Related tags Breakfast cereals Breakfast

Nestle India, a subsidiary of the Swiss giant, is set to enter the breakfast cereals market and take on competitors in the category there such as Kellogg’s and PepsiCo, according to newswires.

Nestlé India chairman and managing director, Antonio Waszyk, told reporters that the breakfast segment, which Datamonitor claims is expected to achieve sales worth $2.8b this year, was one of eight food categories the company was reviewing but he did not announce the intended date of any such launches. sought a comment from Nestlé in this regard but it was not forthcoming prior to publication.

The usual North Indian breakfast consists of stuffed paratha breads but with two income families on the increase there is less time to prepare the traditional meal, boosting demand for ready-to-eat cereals.

Indeed, market analysts Mintel’s Global New Products Database (GNDP) notes a hike in breakfast cereal launches in India from 43 in 2005 to 124 in 2009, with 70 registered so far this year.

Low-fat options

According to Datamonitor, who recently published a report on the bakery and cereals sector in Asia-Pacific, demand in that region for healthy low-fat breakfast cereals with more fibre or fortification with vitamins/minerals and claims pertaining to weight management, are some of the factors stimulating growth in the category.

The bakery and cereals sector in Asia-Pacific will be worth $68.5bn, with an expected CAGR of 6.4 per cent between 2008 and 2013 according to the market researchers.

Nikhil Aggarwal, senior consumer goods analyst at Datamonitor notes: “An affinity for healthy offerings is a key trend that reflects global consumer packaged goods (CPG) sentiments, and the bakery and cereals segment in Asia-Pacific is no exception,”​ continued the analyst, who is based in India.

She added that the appeal of convenience, increased urbanization, rising levels of disposable incomes, as well as exposure to Western culture dietary habits are some of the other reasons for buoyancy in the category.

Furthermore, the developing organized retail system within the Asia-Pacific region will increase both product visibility and availability, which is expected to act as a growth stimulus.

Cereal innovation

Nestlé has been investing significantly in its cereal division to boost the segment globally as well as to improve their quality through the setting up an a new innovation centre for breakfast cereals in Switzerland in collaboration with General Mills under the Cereals Partners Worldwide at a cost of CHF 50m (€33m).

CPW said the innovation centre will work on breakfast cereals that provide consumer benefits, like improved nutritional content, as well as freshness, taste and texture.

Related topics Markets Kellogg Nestlé PepsiCo

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