Nestle India’s rural play: Teaching customers to drink coffee, augmenting distribution

Nestle India has increased its rural reach with the help of distribution and marketing exercises, at a time when rural recovery remains weak for several other FMCG companies.

The maker of Nescafe coffee and Maggi noodles now has a presence in nearly 108,000 villages, growing from about 41,000 villages three years ago in 2020. The company has increasing distributor reach, HAAT activations, and in-shop visibility in rural areas.

“We have deepened our rural reach and we aim to cover 1,20,000 villages by 2024," said Nestle India Chairman and Managing Director Suresh Narayanan at an investor meeting.

Nestle India uses a strategy it calls ‘RURBAN’, to expand reach into small towns and villages.

Accordingly, the company has augmented its distribution infrastructure in rural areas. It has increased the number of wholesale hubs in rural areas to 8,013 units in 2023, from 3,301 units in 2020. The number of rural re-distributors has increased to 8,218 from 6,901 in 2020, the company data showed.

Among its outreach initiatives, Nestle India’s ‘Feet on Street’ programme has individuals working on the ground to boost brand awareness in rural areas. These people personally engage with customers on the ground, complementing Nestle India’s NESmitra app -- an ordering platform designed for RURBAN customers, said Suresh Narayanan.

Nestle India has increased HAAT activations to 18,331 in 2023, from 2,502 in 2022, educating customers about the usage of Nestle products. Narayanan cited an example of how customers have been explained and showed how to consume products like Kitkat and Nescafe, at stalls set up in rural areas.

Nestle India has established a network of 'RURBAN smart stores', which has expanded to 19,300 by 2023, from 3,486 in 2020, offering greater accessibility and convenience to rural customers.

Nestle India continues to expand and adapt its RURBAN product portfolio to cater to local preferences and requirements. Their most recent introduction, Maggi Teekha Masala and Maggi Chatpata Masala variants of Maggi Noodles, has been rolled out in RURBAN markets across 15 cities.