Nestle India slashes ad budget 25% but boosts digital marketing

Nestlé India’s strategic pivot to digital storytelling and ecommerce comes amid a significant 25% reduction in advertising spend for FY25. Despite financial headwinds, the FMCG giant has maintained brand investment through focused digital transformation initiatives and targeted campaigns for flagship products like Maggi and KitKat, demonstrating how major consumer brands can sustain market presence even with constrained marketing budgets.

The big picture: Nestlé India slashed its advertising and promotional spending to Rs 965.86 crore in FY25, down from Rs 1,287.68 crore the previous year, while simultaneously experiencing a 15.7% profit decline.

• The company reported Rs 3,314 crore in profit, down from Rs 3,932 crore, alongside a revenue drop to Rs 20,077 crore from Rs 24,275 crore in FY24.
• Despite financial challenges, Nestlé remained committed to strategic brand investments, prioritizing digital storytelling, collaborative partnerships, and ecommerce-focused campaigns.

Key marketing wins: Nestlé leveraged emotional storytelling and targeted campaigns to maintain brand strength across its portfolio, with notable success for legacy products.

• The company celebrated Maggi’s 50th anniversary with the emotionally resonant “Rishtey Maangein Bas 2 Minute” campaign, helping the Prepared Dishes and Cooking Aids segment contribute over 31% to overall sales.
• KitKat achieved double-digit growth through its “Break Pe Sirf Break” campaign, while Nescafe gained traction among Gen Z through specialty launches like Ice Roast and social media storytelling.

Digital transformation: Nestlé’s embrace of technology and ecommerce has become central to its growth strategy amid reduced marketing expenditure.

• The company deployed an AI-driven retail execution platform called RACE to optimize its market presence.
• Quick Commerce now represents 45% of Nestlé India’s ecommerce business, with overall ecommerce contributing 8.6% to total sales.

Behind the numbers: Since 2015, Nestlé India has more than doubled its annual turnover from Rs 8,100 crore to Rs 20,100 crore, with innovation playing a crucial role.

• The company has launched over 150 new products, now accounting for 7% of total sales.
• Capital expenditure increased to 10% of sales in FY2025, signaling continued investment in growth infrastructure despite marketing budget cuts.

Leadership perspective: Outgoing Chairman Suresh Narayanan highlighted the company’s cultural shift toward agility and innovation speed.

• “We no longer fear failure. We prioritised speed and significantly increased our innovation pace,” Narayanan reflected on the company’s transformation.
• Manish Tiwary is set to assume the role of Managing Director effective August 1, 2025, potentially bringing fresh perspectives to the company’s marketing approach.