Nestlé India - Maverick of the Year

Company: Nestlé India, Gurgaon
Entry Submitted By: Crescendo Global (Agency)
Company Description: Nestlé India is one of the leading CPG companies listed on Indian bourses with a product range that includes infant food, coffee, instant tea, confectionery, dairy products, pet foods and snacks. Nestlé has presence across India with 8 manufacturing facilities and exported $ 75 Million worth of goods in 2020 to over 46 destinations.
Nomination Category: Management Categories
Nomination Sub Category: Maverick of the Year

Nomination Title: SUYASH MEHROTRA

ISSUE: Nestlé India has had an Instant Tea factory since 1967 in the famed Nilgiri region of Tamil Nadu. Nilgiris (Tamil word for “Blue Mountains”) enjoy a Geographical Indicator (GI) tag for Tea. However, unlike Assam and Darjeeling Teas, Nilgiri teas are lesser known in International Tea circles despite accounting for 15% of India’s Tea production and traditionally being more astringent and flavorful.

This factory, originally designed as a pilot plant,metamorphosed to become a 100% Export Oriented Unit engaged in production of Instant Tea powder over 50 years. Sold as a raw material to B2B clients in bulk, Instant Tea powder is used to manufacture Ready to Drink and 3-in-1 Teas. Until2018, Nestlé Instant tea factory was engaged in production of low value Instant Black Tea powder using ‘Tea waste’ - leaving little differentiation vis-à-vis competition from China. The term, ‘Tea Waste’ refers to tea sweepingsor tea stalks not including green tea leaves. Factorycapacity utilizationwas 53% in end-2018 accounting for$ 8 Million in export revenues.

SOLUTION: Suyash Mehrotra took the challenge of finding a sweet spot between the 'Mass market' & 'Premium' Instant Teas in B2B space and further leveraged his learnings to develop a one-of-its-kind proposition for consumer retail (B2C).

Differentiation between 'Artisanal vs Mass': A 5-decade old factory cannot compete with new-age Chinese facilities in terms of throughput or versatility in usage of cheaper raw materials. Suyash turned this liability into an asset by building differentiation of hand plucked orthodox leaves by marginal farmers (< 5-acre land-holding) against low priced CTC Tea as part of product communication. He boldly initiated new product development using fresh leaves instead of cheap tea waste. By deploying traditional fermentation & full solubilization techniques, even Instant black teas are now made using fresh green leaves! The new range delivers highest possible naturalpolyphenol content - a product claim that none in industry had back then!

Emotional connect with ‘Nilgiri’ origin story: In a business environment where consumers are increasingly interested in both the location and process by which theirfoods and beverages are made, brands are progressively using product origin stories to bring in more transparency for better engagement. Suyash utilized this insight to connect differently with globalB2B clients with a virgin Nilgiri origin story, bespoke claims and product attributes. Suyash even impressed Nestlé Waters to implement single-origin Nilgiri story as part of global #NEWNESTEA launch campaign in Europe - vindicating his hypothesis of turning an ingredient into a HERO PERFORMANCE MATERIAL!

‘Premiumization’ of a Commodity to BRAND:Contrary to established trade practice of blending dry leaves with tea waste sourced from multiple sources, Suyash focused to deliver single-origin promise using fresh tea leaves with verifiable product claims. Suyash junked chemical nomenclature to pioneer an Industry-first, bulk brand for B2B sales in Q4’19 and extend it to B2C sales in Q2’20. Aptly called Nestlé Choladi (‘Choladi’ refers to mountain lake adjoining thefactory),new brand captures 4 key elements:

-Actual factory illustration referenced with 5-decade long pedigree
-Fine Pluck in form of “Two Tea Leaves and Bud”
-Marginal Farmers as real heroes
-“NILGIRI” Single-Origin Promise

RESULTS:

-Nestlé India’s Instant Tea Export revenues jumped to $ 30 Million in 2020 at a CAGR% of 93%
-Exports coverage tripledto 22 International markets despite pandemic
-Nestlé India became largest Indian Instant Tea exporter with 59% value share having just 22% of country’s installed capacity
-Factory is 100% utilized for the 1st time; helping add 12 new permanent jobs in India during peak pandemic in 2020
-Industry-first proposition helped bag new business in Japan (Mitsui-Norin, Marubeni, ITOEN, DKSH), China (Damin), South Korea (Teazen), Europe (Coca-Cola, Pronto Foods, H&L) and North America (AriZona, Global Appetite)
-This 'Premiumization' of commodity enabled doubling of average price realizations from $ 6/kg to $ 14/kgfor Nestlé India;helping support sustainable livelihood for 1250 marginal farmers with average 25%-30% premium over tea auction rates

Summary:

-Nestlé Choladi is the 1st BRAND in the world in BULK INSTANT TEA categoryand1st home grown brand for Nestlé India since MUNCH Chocolates in 1999!
-Nestlé Choladi moved into B2C space in 2020,disrupting global functional tea market withsoluble tea powders. It unlocks a $ 235 Million opportunity forNestléwith given capacity in India
-Nestlé India further onboarded another Co-manufatcurer, AVT Natural to meet the growing demand for 3rd party customers as well asNestlé affiliates globally (JP, TW, TH, PH, CA)
-Nestlé Choladi launch adopted as case study by an Indian B-School
-Suyash Mehrotra awarded the prestigious "Nestlé Innovator of the Year 2020" byNestlé
-Suyash Mehrotra awarded Business Innovator of the Year 2020” by Asian-African Chamber of Commerce and Industry
-Suyash Mehrotra won 2 Gold Stevies at the 2021 Asia-Pacific Stevie Awards for Innovation in Brand Development" & Most Innovative Marketing Professional of the Year"