Rising commodity prices are burdening the profit margins of Indian FMCG brands. Nestle India is reportedly planning 'small' price hikes on its products to counter rising costs in coffee, cocoa, and edible oil. According to reports, the price increase will be kept 'as low as possible' to avoid impacting sales volume. Company shares gained over 1 per cent following the reports.

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Inflation pressures weigh

Inflationary pressures are weighing on corporate earnings. As per the Karnataka Planter Association, coffee prices have surged by up to 30 per cent. Global supply chain disruptions have pushed brands to explore alternatives and probably pass on the cost to the consumer.

Nestle India's powdered and liquid beverages, including the Nescafe brand, contribute 14 per cent to the company's revenue, making coffee inflation a major concern. Other commodities such as Cocoa, Wheat, and Palm oil also remain expensive. Nestle, along with other brands, is focusing on strategic stock management and cost efficiencies before resorting to price hikes.

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Brands remain cautious as sustained demand trends are yet to be confirmed. Meanwhile, hyperfast delivery platforms like Blinkit, Instamart, and Zepto continue to gain traction, reshaping consumer spending habits. The upcoming income tax cuts in Fiscal 2026 may boost disposable income, potentially driving higher consumption.