Nestle pins hopes on rising consumer class

Bangladesh sees a rising consumer class due to more than 6 percent annual economic growth and improvements in the country's position in various social indicators.

The progress offers prospects to businesses, especially those engaged in food, nutrition, healthcare and wellness, said Suresh Narayanan, chairman and managing director of Nestle India Ltd.

Bangladesh is going through a period of rapid economic and social changes, which indicate that consumer behaviour has also evolved, he told The Daily Star in an interview last week.

Narayanan was in Dhaka to meet stakeholders and visit the factory of the company.

In the consumer class, the “seekers” and “aspirers” are those who are clearly more affluent, he said, adding that the number of such seekers is almost half the country's 160 million people.

In the last decade, the middle class in Bangladesh rose substantially, Narayanan said.

All these things tell about a positive trend to a nutrition and wellness-based company like Nestle, which recorded double digit growth in its Bangladesh business in the last couple of years. "I think the growth story in Bangladesh has been quite encouraging.”

Headquartered in Switzerland, Nestle started commercial production in Bangladesh in 1994.

The company now operates in four to five segments such as nutrition, milk, food and confectionary in Bangladesh and plans to introduce new products.

The 150-year-old company has more than 2,000 brands globally.

"Around 35 percent people in Bangladesh are young. Obviously consumers are aspiring not only for affordable products, but also for products that reflect their personalities and their lifestyles -- slightly expensive, premium brand products."

The official said the overall food market registered around 10 percent growth a year in Bangladesh in the last few years. The entry of more firms with new products also helps expand the size of the market.

He said Nestle never compromises the quality of its products. If there are more companies that put emphasis on both quality and safety, it will be very good for the country, he added.

"As a result, the market will in fact expand because consumers will start having more trust, saying what I am consuming is actually a safe product, and a high quality product," Narayanan said.

He also talked about the Maggi noodles issue in India.

In May last year, Indian food safety authorities banned the production and sale of Maggi amid claims they contained high levels of lead.

Nestle relaunched the popular brand after the ban was overturned in the Bombay High Court.

Narayanan said the Maggi issue in India also impacted their Bangladesh business and the overall results of the company.

"But we are back in the market and sort of encouraged by the positive consumer response that we have received," he said.

Nestle has been investing for the last couple of years -- both in creating new categories and expanding facilities. "I think this process will continue in the coming years as well."