Nestlé India’s milk products and nutrition business, once the company’s primary growth engine, has seen its contribution to overall revenue decline significantly as the FMCG giant shifts focus toward faster-growing categories. According to the company’s FY26 annual report, the milk products and nutrition segment accounted for 33.4% of turnover in FY26, down from 38.1% in FY25 and nearly half (49.6%) of revenue in CY2016. The segment, which includes dairy whitener, condensed milk, UHT milk, yogurt, maternal and infant nutrition products, baby foods, and healthcare nutrition, generated revenue of ₹7,716 crore in FY26, up just 0.7% year-on-year, making it the slowest-growing of Nestlé India’s four product groups. Volumes in the segment also declined 2% to 122,958 tonnes.
In contrast, the company’s other business segments recorded stronger growth. Confectionery products, including KitKat and Munch, posted a 33% increase in revenue and a 25% rise in volumes during FY26, while prepared dishes and cooking aids expanded their revenue share from 24% in FY16 to 31.5% in FY26. Nestlé India reported consolidated revenue of ₹23,154 crore in FY26, representing 14.6% growth over the previous year, supported by double-digit volume expansion.
Industry experts attribute the changing revenue mix to intense competition in India’s dairy sector, where cooperatives such as Amul and Mother Dairy maintain strong advantages in milk procurement and pricing. Rising milk prices, lower summer milk production, and higher packaging and transportation costs have also pressured the category. At the same time, Nestlé has increasingly focused on premium and high-growth segments such as confectionery, coffee, pet care, and value-added food products, aligning with the global parent company’s strategy of prioritizing higher-margin growth opportunities.
Despite the declining share of dairy and nutrition in its portfolio, Nestlé stated that the segment demonstrated resilience and delivered steady growth during the latter part of FY26. However, analysts expect growth in the milk and nutrition business to normalize further in FY27 as market conditions remain competitive and consumer demand patterns continue to evolve.
Source: Dairynews7x7 11 June, 2026 Read full article here