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August 11, 2026
Samar Srivastava, Forbes India
11 Aug 2026
Ask someone what an exurb is and chances are you’ll be met with a blank stare. Few city slickers would have heard of the term, let alone visited one. Located about 90 minutes from Gurugram, Ateli fits the description perfectly.
The drive is deceptively easy. Wide highways, sparse traffic, and long stretches of open countryside gradually give way to a settlement that feels oddly familiar. “If you’d had shut my eyes and brought me here, I’d have said we weren’t too far from Gurugram,” says Manish Tiwary, 56, managing director of Nestlé India.
Ateli is a residential settlement that has grown around its agricultural market. Cars jostle with cattle for road space. Kirana stores spill onto narrow streets.
Labourers gather at intersections in search of daily wage work while small factories, unfinished commercial buildings, and modest homes stand shoulder to shoulder. It has the look and feel of the outskirts of any fast-expanding Indian city.
Yet beneath that ordinariness lies something far more significant. With a population of barely 9,000, Ateli represents the kind of semi-urban India that is rapidly emerging as the country’s next consumption frontier. Rising incomes, better roads, deeper internet penetration, and easier access to branded products are narrowing the divide between metropolitan India and its smaller towns.
For Nestlé India, places like Ateli have become central to its next phase of growth. Tiwary, who took Forbes India through the town on a cloudy May morning, is convinced that India’s consumption story is changing. “The aspirations are the same,” he points out. “What sells on the fringes of an urban market is similar to what sells here.”
Whether consumers live in Gurugram or Ateli, they increasingly want the same products, brands, and experiences. The challenge for companies is no longer generating demand; it is ensuring that products are available where consumers want them, and at prices they are willing to pay.
Remapping the route
The conviction is informed by experience. Before taking over at Nestlé India, Tiwary headed Amazon India, where he watched demand for smartphones, air conditioners, diapers, and other discretionary products steadily spread beyond India’s largest cities. Consumer aspirations, he realised, were travelling much faster than traditional distribution networks.
Getting Maggi noodles, Nescafé coffee or KitKat chocolates into thousands of towns like Ateli, however, is a far more complicated proposition than shipping electronics through an ecommerce warehouse. On a per item percentage basis, the cost of distribution is higher, there are also more varied stock keeping units (SKUs) and the frequency of consumption means replenishment has to be faster. Fast-moving consumer goods (FMCGs) are low-ticket, high-frequency purchases. Margins are thinner, replenishment cycles are shorter and distribution economics are far more demanding.
Nestlé’s answer has been a patient, years-long investment in rebuilding its route to market. “Earlier, the company was over-indexed on urban India but the focus has now shifted to rural India,” says Amit Agarwal, SVP, fundamental research, Kotak Securities.
The timing appears to be fortuitous. Nestlé kicked off the June quarter with another strong performance, reporting a 48 percent jump in net profit to ₹975 crore, on a 25 percent increase in revenue to ₹6,378 crore. With this the company continued the strong performance it posted in the year ended March 2026. March quarter revenue and profits were up 23.1 and 22 percent respectively. The management attributed the performance to strong volume growth, wider distribution, and continued traction across both urban and rural markets, while cautioning that inflation in commodities such as cocoa, edible oils, and sugar remains a key watchpoint.
Investors have taken notice. Nestlé India’s shares have risen around 16 percent over the past year, giving the company a market capitalisation of roughly ₹2.79 lakh crore. At about 80 times forward earnings, it commands the richest valuations in India’s consumer sector, trading ahead of multinational peers such as Hindustan Unilever (HUL) and Colgate-Palmolive as well as domestic rivals Dabur, Marico and Godrej Consumer Products.
The premium reflects more than strong quarterly earnings. Across corporate India, companies that invested early in brands, distribution and execution are beginning to pull ahead as consumption gradually recovers. Listed liquor companies such as United Spirits and Radico Khaitan have continued to post double-digit revenue growth, reflecting resilient discretionary spending. Automobile manufacturers have benefited from lower financing costs and tax relief, particularly in entry-level motorcycles and small cars. FMCG companies with a meaningful rural presence have also reported improving volume growth.
The recovery has been uneven, but the direction is becoming clearer. According to NielsenIQ, rural India has outpaced urban markets in FMCG growth for eight consecutive quarters, with improving household incomes and higher spending in smaller towns driving much of the momentum. For companies that have spent years investing in distribution rather than chasing short-term margins, the payoff is beginning to manifest.
Nestlé believes it is particularly well positioned. Its categories—coffee, chocolates, baby food and noodles—remain under-penetrated compared with staples such as biscuits, soaps and toothpaste. That gives the company a rare opportunity: Not merely to take market share from rivals, but also to create new consumers. That ambition begins in places such as Ateli.
Direct Push
Ground zero for Nestlé’s rural strategy is Rakesh Kumar’s 12-by-12-foot kirana store-cum-warehouse in Ateli. The 35-year-old, who comes from a farming family, has been running the shop for more than a decade. The biggest change, he says, is not the number of customers walking through the door, but what they are buying. Alongside soap bars now sit oats, muesli, coffee, soups and Cerelac baby food.
“These are products no one was interested in five years ago,” Kumar says. “Now we get steady enquiries because people have become far more health conscious.” The shop’s shelves tell the story of India’s changing consumption patterns. Kumar stocks products from dozens of companies—from ITC and Perfetti to Ferrero and Keya—but his store also offers a glimpse into how the country’s FMCG distribution model is being rewritten.
A decade ago, retailers like him were supplied largely through wholesalers. Consumer companies concentrated their own sales forces in larger towns where inventory turned faster, leaving intermediaries to service smaller towns and villages.
It was an efficient system: Mass television advertising created demand, wholesalers ensured products reached retailers in a cost-efficient manner, and shops became the last mile of India’s consumption engine.
That model is now under pressure. Modern trade, ecommerce and quick commerce have chipped away at distribution as a competitive moat. Digital advertising has fragmented audiences, while nimble direct-to-consumer (D2C) brands have intensified competition across categories.
Simply reaching consumers is no longer enough. Companies increasingly need to know what consumers are buying, how quickly tastes are changing and which products are beginning to gaining traction.
Nestlé’s response has been to rethink rural expansion itself.
A re-run
“It has become more holistic and comprehensive,” says Sushrut Nallulwar, sales director at Nestlé India. Distribution remains the backbone of the strategy, but it is now supported by technology, locally relevant marketing and products designed specifically for different consumer segments. “It’s not just about scaling up route-to-market infrastructure anymore.”
Tiwary has watched this move before. During his years at HUL, the company dramatically trebled its rural direct footprint after identifying villages and small towns as the next engine of growth. The then chairman Harish Manwani famously told shareholders that though competitors were creating gaps, HUL had to “continuously create new gaps”.
Nestlé is now following a similar philosophy, albeit for a very different retail landscape. Retailers such as Kumar, who once depended almost entirely on wholesalers, are increasingly serviced directly by the company.
The economics are demanding. Serving thousands of retailers, each buying between ₹1 lakh and ₹5 lakh worth of products every month, requires warehouses, technology, logistics, credit management and a large field sales force. “The number of outlets is less important than what direct distribution gives you,” says Nallulwar. “It gives you control.”
Today, Nestlé reaches roughly 6 million retail outlets across India, of which around 2 million are serviced directly. Those outlets account for nearly 75 percent of the company’s sales, giving it far greater visibility of consumer behaviour than a traditional wholesale-led model.
While distribution models vary across FMCG companies, wholesalers continue to account for a much larger share of sales for most players. Nestlé estimates that wholesale contributes about 20 percent of its business compared to an industry average of 40 to 45 percent. The company is effectively choosing to incur higher distribution costs in return for better market intelligence and tighter execution.
Buying better data
Every direct interaction with a retailer generates information. Nestlé learns which products are moving fastest, which pack sizes consumers prefer, how frequently shelves are replenished and where competitors are beginning to gain ground. If a rival noodle brand suddenly starts selling well in Ateli—or consumers begin shifting towards smaller packs—the company knows almost immediately.
“Nestlé is essentially buying better data,” says Devangshu Dutta, chief executive of Third Eyesight, a retail consultancy. “That may depress margins in the short term, but it creates a much stronger competitive position over time. Better visibility of what retailers are stocking and consumers are buying allows it to react much faster than a wholesale-led model.”
Control, however, extends well beyond making sure cartons arrive on time. The backbone of that system is increasingly digital. Orders are placed through Nestlé’s retailer app. Field sales representatives capture information on stock availability, competing brands and consumer preferences during every store visit. That information flows back into the company’s planning systems, allowing it to fine-tune inventory, merchandising and product innovation market by market.
For Nestlé, distribution is no longer about moving products. It is about reducing the distance between the consumer and the company’s decision-makers. The insights frequently translate into product decisions. According to Nallulwar, nearly two-thirds of rural FMCG purchases happen at the ₹5 and ₹10 price points, making affordability just as important as physical reach. “It is not just about reaching outlets,” he says. “There has to be consumer relevance in terms of availability at the right price points.”
One example hangs right outside Kumar’s shop.
Seeding the market
Insights from Nestlé’s sales teams prompted the company to redesign its ₹10 Maggi packs. Instead of individual packets, they are now linked together in long strips that retailers hang outside stores.
The redesign wasn’t simply about affordability. In rural India, where shelf space is scarce and many purchases are made on impulse, the hanging strips function as miniature billboards. Nallulwar calls it “aerial visibility”, ensuring the product catches a shopper’s eye before they even step inside the shop.
For Kumar, the benefits are equally tangible. Orders placed through Nestlé’s app typically arrive the following day, giving him faster replenishment and, at times, better credit terms than buying from wholesalers.
On India’s next consumption battleground, speed of information may prove just as valuable as speed of delivery.
Walk around Ateli and those investments are hard to miss. Across from Kumar’s store, retailers have been provided with visi-coolers stocked with ready-to-drink Nescafé, KitKat and other chocolates. “We are still seeding the market,” says Tiwary. “But it is important to be present. Expanding the category is important.”
The opportunity goes beyond instant noodles. Coffee, chocolates and baby food are all beginning to gain traction in smaller towns, but their penetration remains far below that of more established FMCG categories.
Maggi noodles, for instance, has a rural penetration rate of just 10 percent, measured by consumers who have eaten the product during the previous month. The frequency of Maggi consumption is far below the 80 percent for biscuits or 90 percent penetration for toothpastes. When you compare the categories, the size of the opportunity is evident.
“The biggest opportunity for us is that household penetration in our categories is still significantly lower than in developed categories,” says Nallulwar. “There is a large headroom for these categories to grow.”
White Spaces
For most consumer companies, growth comes from taking market share away from competitors. Nestlé believes India’s biggest opportunity lies elsewhere. It is betting that the country’s next consumption boom will come not from persuading consumers to switch brands but from encouraging them to buy products they have never bought before.
This partly explains why the company has spent the past three years expanding its distribution network into towns like Ateli. Getting products onto shelves is only the first step. The real prize is changing what ends up in the shopping basket.
Coffee illustrates the opportunity. For decades, India has remained overwhelmingly a nation of tea drinkers. At just 70 grams per person annually, India’s coffee consumption is a fraction of the global average of 1.3 kg, according to the Coffee Board of India. Europeans consume about 4.5 kg a year, North Americans 5.1 kg, while Finns drink more than 12 kg per person annually.
The gap within India is equally revealing. According to Crisil, urban Indians consume roughly four times as much coffee as their rural counterparts, suggesting that rising incomes and urbanisation could significantly expand the addressable market.
For Nestlé, the opportunity is, therefore, not merely to persuade consumers to switch from one coffee brand to another; it is to persuade millions of Indians to drink coffee in the first place. “Coffee is still a significantly under-penetrated category,” says Sunayan Mitra, director, Coffee and Beverages, Nestlé India. “That gives us a long runway for growth.”
The strategy begins with affordability. Consumers are introduced to the category through ₹2 Nescafé sachets sold at neighbourhood kirana stores and tea stalls. As incomes rise, Nestlé hopes consumers will graduate to jars, ready-to-drink cold coffee, and eventually premium offerings such as Nescafé Gold Blend and Nespresso.
That journey—from an impulse purchase to a premium brand—is shaping how the company thinks of growth. “Ultimately, if I don’t have anything new to offer the consumer, why would they upgrade?” says Tiwary.
The same philosophy applies to other products as well. Take chocolates. Per capita chocolate consumption in India remains among the lowest globally, despite rapid premiumisation over the past decade. Baby food continues to be significantly under-penetrated. Pet food, while growing rapidly, remains a tiny category compared with the developed markets. Even Maggi noodles, as mentioned earlier, reaches only around 10 percent of rural consumers despite being Nestlé’s biggest brand.
Finding these categories has become a business in itself. Nestlé Professional, the company’s out-of-home business, has evolved into a testing ground for identifying such opportunities. Instead of waiting for consumer demand to emerge, the division increasingly searches for fragmented local markets that can be organised around trusted brands.
Two years ago, for instance, the team identified an opportunity in Kerala’s coastal belt, where coconut milk powder is used by restaurants and institutional kitchens. The market was dominated by regional manufacturers with varying quality standards.
Leveraging the familiarity of the Maggi brand and working closely with chefs and caterers, Nestlé began to push its own coconut milk powder. “It was a roaring success—we hit the jackpot,” says Saurabh Makhija, director, Nestle Professional, declining to disclose sales numbers.
The Kerala experiment has since become a template. In Hyderabad, where Irani chai is woven into the city’s food culture, Nestlé segmented bakeries into premium, mainstream and economy outlets before introducing Milkmaid as an alternative to locally produced sweetened milk. Rather than attempting to change consumer habits, the company sought to formalise a fragmented market.
The lesson, says Tiwary, is that India can no longer be viewed as a single consumer market: “It is many different Indias.” A category that barely exists in one state may be mature in another. A product that succeeds in Bengaluru may fail in rural Bihar. The challenge is no longer creating national brands but identifying the thousands of local opportunities. That is where Nestlé believes its investment in distribution begins to pay off.
Every retailer visit, every digital order and every conversation between a salesman and a shopkeeper adds another piece to the puzzle. The next ₹10 product, the next regional launch or even the next national brand may not emerge from a Mumbai boardroom. It may emerge from a kirana store in Ateli.
The Next HUL?
Nestlé’s distribution push, its search for white spaces and its willingness to create entirely new categories have not gone unnoticed by investors. At nearly 80 times forward earnings, Nestlé India trades at a substantial premium to its rivals. The valuation implies investors are looking well beyond the next quarter.
For decades, HUL has been the benchmark for Indian FMCG companies—a business built on unmatched distribution, category breadth and extraordinary execution. Nestlé is unlikely to rival HUL on size anytime soon. But the question is: Can it become India’s next great consumer compounder?
Its investment case increasingly rests on three pillars. The first is distribution. Over the past three years, Nestlé has built one of the country’s deepest direct distribution networks, which gives the company not just reach, but information.
The second is category creation. Unlike many FMCG companies whose biggest brands enjoy near-universal penetration, several of Nestlé’s businesses—coffee, Maggi noodles, pet food, chocolates and baby—are in the early stages of their growth curves, giving Nestlé an unusual advantage: It is not competing for market share, but trying to expand the market itself.
The third pillar is moving up the value chain, or premiumisation. A consumer who begins with a ₹2 Nescafé sachet may graduate to a coffee jar, ready-to-drink coffee and maybe a premium blend. The same logic applies to much of Nestlé’s portfolio.
Veteran investor Bharat Shah, erstwhile co-founder at ASK Asset & Wealth Management and now in the process of setting up his own fund, has owned Nestlé’s stock for 30 years before exiting recently. He points out that years of rich profits and fat balance sheets have taken consumer companies’ attention away from adequate innovation and continued adaptability, whether in product or category creation, distribution platform innovation or technology adaptation. This is particularly true for MNCs where decision-making happens in headquarters and so they are behind the curve.
He also points to the dramatic changes in the consumer landscape—the emergence of local brands that chip away national brands, changes in the terms of trade due to the rapid advent of Q-commerce and modern trade, and the need to innovate and premiumise. Many categories have high penetration and so volume growth is hard to get.
On the drive back towards Gurgaon, it is tempting to think of Ateli as just another small town on the edge of India’s economic map. But for Nestlé, it represents the future of Indian consumption.
(Published in Forbes India)
admin
May 15, 2026
The ET Now Swadesh panel discussion focussed on the dual challenge facing the Indian economy: a weakening rupee and rising crude oil prices, which together are driving “imported inflation” and straining household budgets. Devangshu Dutta (Founder, Third Eyesight) put forth the following key points during the discussion (the video link is under the text summary below):
1. Dual Impact on Industry and Consumers:
2. Vulnerability of Small Businesses (SMEs):
3. Income vs. Expenditure Strain:
4. Ripple Effect of Crude Oil Beyond Logistics:
5. Shifts in Consumer Spending Patterns & “Shrinkflation”:
The panel noted that while the Reserve Bank of India (RBI) has adequate foreign exchange reserves to defend the rupee temporarily, the definitive solution relies heavily on the cooling down of global geopolitical tensions (such as the Middle East conflict affecting the Strait of Hormuz). Until then, Indian consumers will need careful financial planning and smart spending adjustments to navigate this inflationary phase. [Video below.]
admin
February 14, 2026
This episode of theUpStreamlife is a freewheeling conversation between Vishal Krishna and Devangshu Dutta, founder of Third Eyesight, with insights into the growth of modern retail and consumption in India, brand building and M&A, the balance of power between brands and retailers/platforms, sustainability vs growth and many other aspects, and is well-suited for founders and teams who want to be building for the long run in India.
admin
January 28, 2026
What does it actually take to build a fashion brand in India?
This panel (“Beyond the Noise- How D2c Fashion Brands Are Reinventing Retail”) at the 25th Edition of India Fashion Forum focussed on some real answers, in a refreshing, down-to-earth conversation moderated by Devangshu Dutta (Founder, Third Eyesight), with the founders of DeMoza (Agnes Raja George), The Mom Store (Surbhi Bhatia), Miraggio (Mohit Jain), BeyondBound (Tejasvi Madan), and Bari (Sameer Khan Lodhi).
No fluff, no “disrupting the industry” talk. Just founders being honest about what’s worked, what hasn’t, and what they’d do differently. A few things that struck a chord:
• Every single brand started because the founder couldn’t find something they personally wanted: inclusive activewear, affordable handbags that didn’t look cheap, good maternity wear. Sometimes the simplest observation is the best business idea.
• Inventory management came up often. One founder took their inventory cycle from 6 months down to 4. Another re-shuffles stock every 15 days based on what’s selling where. Unglamorous? Yes, but this is what actually keeps a business alive.
• The marketing conversation highlighted a move away from traditional advertising toward things that actually make people feel something. One founder talked about turning a farmhouse into a full “apricot colour” experience for customers. Another shoots content with real customers, not influencers.
• And the most memorable line of the whole discussion came from the most experienced founder in the room sharing a learning: “I won’t open stores fast.” No explanation needed, really.
Building a brand is exciting. Keeping it alive is the harder, quieter work. This panel was a good reminder of that. Worth a watch if you’re building something in this space.
admin
December 15, 2025
By Saumyangi Yadav, Entrepreneur India
Dec 15, 2025
India’s D2C ecosystem has grown rapidly over the past five years, but scale remains elusive. While thousands of brands have launched and many have crossed early revenue milestones, only a small fraction manage to break past INR 100 crore in annual revenue. According to a new report by DSG Consumer Partners, based on a survey of over 100 Indian D2C founders and operators, the problem is not demand or product-market fit, it is how brands attempt to scale.
The report shows that around 60–65 per cent of Indian D2C brands remain stuck in the INR 1–50 crore revenue band, with very few reaching the INR 100 crore mark. This stage marks the point where early traction exists, but growth begins to strain unit economics, teams, and operating systems.
Insights from over 100 D2C founders reveal that India’s fastest-growing brands win on fundamentals rather than speed alone. Clear product-market fit, disciplined data tracking, strong unit economics, creative velocity, and an early focus on retention consistently separate scalable brands from those that plateau. Founders also admit that performance marketing mistakes, pricing missteps, and weak creative systems slow growth far more than budget constraints. In a booming D2C landscape, capability gaps in operations, brand-building, and supply-chain depth are widening the divide between breakout brands and those stuck in the performance plateau.
Industry observers argue that this is where many brands mistake rapid online growth for sustainable scale.
As Devangshu Dutta, Founder & CEO, Third Eyesight, explains, “Scaling up online can be very rapid, but is also capital-hungry in terms of CAC. Given the intense competition, the lack of customer stickiness and the power of platforms, there is a constant churn of marketing spend which is a huge bleed for growing brands.”
CAC Inflation is The Real Constraint
One of the clearest findings from the playbook is that acquisition efficiency, rising CAC and unstable ROAS, is the single biggest blocker to growth, cited by more founders than funding or category expansion. Moreover, over 70 per cent of brands rely on Meta as their primary acquisition channel, increasing vulnerability to auction pressure and platform-driven volatility.
Dutta links this directly to the limits of a digital-only mindset. “Limited offline expansion can trap brands in narrow urban digital markets, blocking broader scale,” he said.
This over-reliance on online performance marketing often leads to growth that looks strong on dashboards but weak on cash flow.
Highlighting their report, Pooja Shirali, Vice President, DSG Consumer Partners, said, “Across over 90 consumer brands we’ve partnered with at DSGCP, one truth is clear: brands that master Meta’s ecosystem don’t just grow, they change their entire trajectory through strategic clarity and disciplined execution. The real drivers of scale have less to do with viral moments, and everything to do with the long-term fundamentals that make milestones like the first INR 100 crore predictable, not accidental.”
Why Omnichannel is Unavoidable
The report suggests that brands that scale sustainably are those that reduce overdependence on paid digital acquisition and expand their distribution footprint. However, offline expansion brings its own complexity.
Dutta stresses that omnichannel is not an optional add-on, but a strategic shift. “D2C brands must adopt an omnichannel approach, blending online with offline retail for sustainable and scalable reach. Clearly the channels work very differently and management teams have to be prepared and capitalised for the long haul to tackle acquiring customers with channel-appropriate strategies,” he adds.
This aligns with the DSGCP report’s broader insight that scale breaks down when brands fail to adapt operating models as they grow.
Even within digital channels, performance weakens over time. The playbook finds that 62 per cent of founders report creative fatigue, where repeated creatives fail to sustain ROAS despite higher spends. At the same time, 55 per cent admit to under-investing in CRM and retention, with most brands reporting repeat purchase rates of just 10–30 per cent.
Both the data and expert opinion point to a common theme: brands that cross the INR 100 crore mark are structurally different. They obsess over unit economics, processes, and capital efficiency rather than topline growth alone.
As Dutta puts it, “Scalable brands that cross the growth hump have leadership obsessed with unit economics and omnichannel execution rather than chasing vanity metrics. Cash always was and is king, especially at early stages of growth.”
He adds that execution strength matters as much as strategy. “They are able to grow and steer teams that build and replicate processes fast rather than spending time, effort and money reinventing all the time, and do so without constant CXO intervention.”
As competition intensifies and capital becomes more selective, the next generation of INR 100 crore D2C brands is likely to be defined not by speed, but by the ability to compound cash flows, institutionalise processes, and scale distribution beyond digital platforms.
Saumyangi is a Senior Correspondent at Entrepreneur India with over three years of experience in journalism. She has reported on education, social, and civic issues, and currently covers the D2C and consumer brand space.
(Published in Entrepreneur India)
