Contents

Contents..................................................................................................................... 3 Executive summary.....................................................................................................4 NESTLE........................................................................................................................ 5 Introduction............................................................................................................ 5 Nestle India................................................................................................................. 6 Scope of the report.................................................................................................... 7 PEST analysis ............................................................................................................ 7 Political.................................................................................................................... 7 Economic................................................................................................................. 8 Social....................................................................................................................... 8 Technology.............................................................................................................. 8 SWOT Analysis............................................................................................................ 9 Strength................................................................................................................... 9 Weakness................................................................................................................ 9 Opportunity ........................................................................................................... 10 Threat ...................................................................................................................10

Executive summary

In India Retail industry for pet food is an untapped market although now many global brands are trying to launch their products in India. Nestle which is the worlds largest food and beverage company, is the most trusted brand in India. Though Nestle subsidiary company Nestle Purina pet care has not make a big hit in the pet food market. Report tells about the present condition of pet food market in India and depicts the future prospects, analyzing the pet food market by using techniques such as SWOT, PESTEL

NESTLE
Introduction
Nestle which is the world biggest food and beverage company, with turnover of 109.9bn Swiss francs, was founded by Henri Nestle in 1866. Henri Nestle was a pharmacist and in a situation where a premature infant couldnt tolerate mother milk or any conventional food, he found an opportunity, he developed a product combining cows milk, wheat flour and sugar and named it Farine Lactee Nestl, this product was to help the infant mortality who were facing malnourishment. Thus the first product of Nestl was being marketed in Europe. Nestle was latter purchased by Jules Monnerat in 1875 and collectively they launched a condensed milk product of its own. Anglo-Swiss Condensed Milk Company was a big competitor for Nestle during that period. Latter on both companies in 1905 merged. Nestle got fully established in Europe as its operation were properly functioning and its brands were gaining fame all-around Europe, then Nestl decided to set up production plants around the globe to ensure the growth of the organization and to become multinational. In order to expand its network, Nestle has to setup industrial operation in new market and for that lot of research will be needed. In this process various factors affect the growth of company such as The availability of raw material Cost factor Economic climate Consumer purchasing power Consumer tastes

The decision to become multinational turned fruitful for Nestl and today Nestl has its own operations and products in America, England, India, Brazil, Australia, Pakistan, Hungary, France, Belgium, Italy, Spain and various other countries around the globe .

Nestle India
Nestls relationship with India dates back to 1912, when it began trading as The Nestl AngloSwiss Condensed Milk Company (Export) Limited, importing and selling finished products in Indian market. After Indias independence in 1947, the economic policies of the Indian Government emphasized the need for local production. Nestl responded to Indias aspirations by forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the Government wanted Nestl to develop the milk economy. Progress in Moga required the introduction of Nestls Agricultural Services to educate advice and help the farmer in a variety of aspects. From increasing the milk yield of their cows through improved dairy farming methods, to irrigation, scientific crop management practices and helping with the procurement of bank loans. Nestl set up milk collection centers that would not only ensure prompt collection and pay fair prices, but also instill amongst the community, a confidence in the dairy business. Progress involved the creation of prosperity on an on-going and sustainable basis that has resulted in not just the transformation of into a prosperous and vibrant milk district today, but a thriving hub of industrial activity. Nestl has been a partner in India's growth for over nine decades now and has built a very special relationship of trust and commitment with the people of India. The Company's activities in India have facilitated direct and indirect employment and provides livelihood to about one million people including farmers, suppliers of packaging materials, services and other goods. Nestl India manufactures products of truly international quality under internationally famous brand names such as NESCAF, MAGGI, MILKYBAR, MILO, KIT KAT, BAR-ONE, MILKMAID and NESTEA and in recent years the Company has also introduced products of daily consumption and use such as NESTL Milk, NESTL SLIM Milk, NESTL Fresh 'n'

Natural Dahi and NESTL Jeera Raita. Nestl India operates as a responsible organization and facilitates initiatives that help to improve the quality of life in the communities.

Scope of the report

In India Nestle has just entered the pet food market under a subsidiary company known as Nestle Purina pet care company. This report consults to bring a new product as pet Cerelac which will be balanced diet of nutrition for the pets.

PEST analysis
Political
Retail industry of India is much unorganized. In 1947 government of India emphasize economic policy of local production. Nestle formed Indian company and set up a factory at Moga, Punjab. Government wanted Nestle to develop milk economy, and they were successful. Today Pet food industry is in its nascent stage and there is huge potential in this market. The Indian government had laid down policy for import of pet food in India. As per the import policy no consignment of pet food product of animal origin shall be imported into India without a valid sanitary import permit issued by Department of Animal Husbandry, Dairying and Fisheries. All consignments must be accompanied by the following documents: A Valid copy should be there of the Sanitary Import Permit (SIP) issued by Government of India. There should be Animal health certificate in original issued by the official veterinarian of the exporting country. The labeling of the products should be done in local/or regional language. The label should clearly indicate that at no point of time, the imported product shall find way to animal food chain other than the dogs and cats. Most of the mid-priced and premium pet food brands in India are imported. The government reduced import duties on pet foods in 2007 which provides a boost to foreign manufacturers and retailers.

Economic
India's pet industry is valued at around 45 million dollars annually; according to research firm Euromonitor. Experts say that thanks to the economic boom of the past decade, pets have become status symbols in a society undergoing seismic changes that have undermined the traditional extended family .Pets are becoming big business in India, a country of more than a billion mostly poverty-stricken people, and industry figures said they see no slowdown in annual growth of 10-15 percent. Indians spent US$20 million on pet food in 2004 - a figure that rose to US$29 million in 2007. Pet stores are catering for the new obsession by stocking herbal shampoos, digestive tonics, scent, designer beds, knitted coats, mufflers, dog shoes and raincoats, as well as regular items such as flea spray.

Social
In India factors for impressive growth in demand of pet food is because of increase in pet ownership. People are fond of keeping pet for various reason such as security of their house, pet popularity in media advertisement, movies, pet shows like heavy petting (NDTV good times). This has encouraged people to buy pets. International quality and Indian pricing have increased propensity among consumers to feed their pets branded food as changes in lifestyle in the form of the rise in nuclear families, double income households, and lesser number of children have led to the increase in household products. Grooming trends, feeding trends, and training trends have rapidly changed in India during the past few years. This has led to a remarkable increase in the manufacture of pet products throughout the country .

Technology
High temperature, short time extrusion cooking has been utilized to process pet foods for many years. Extruded products have been engineered to provide optimum nutritional balance and functional properties while maintaining processing costs which are lower than many other thermal processes known today. The unique features of extrusion cooking (high shear and elevated pressures and temperatures) present an interesting challenge in the assessment of nutrient retention.

Ingredient selection has a tremendous impact on final product texture, uniformity, nutritional quality, economic viability, and the ability of the product to accept high levels of liquid coatings when desired. Raw material utilization and cost-effective formulation are key operational factors. Raw material quality standards will continue increasing because of the demand by consumers for higher quality final products. The ability to alter processing conditions and raw material formulations to keep formulation costs at a minimum, while maintaining high quality standards and minimum operating costs is a challenge for every processor .

SWOT Analysis
Strength
The increasing consciousness of people regarding the health of their pets leads to a focus on nutritious food which helps increasing the life span of their beloved animals. This benefits the pet food industry greatly as it leads to increased demand and allows manufacturers to set their prices for selected products at a high level. Increased competition has lead to greater effort for developing new products in order to meet customers demand .Therefore a lot of money has been put into Research and Development strategies, stimulating technical progress in this industry. Scientific evidence about the increased life of pets eating healthy and high quality food is well known amongst the people. Owner of pets gain health benefits, encouraging people to hold a pet . Nestle has its loyal customer following. Nestle has pet food product in many countries and has all range of brands in pet food. Nestle has huge lab research centre. Nestle pet Cerelac is a new product for pets and so less competition.

Weakness
Nestle Purina pet care company was late in entering the pet food market in India. Pedigree of Mars has dominated the market by entering early. Nestle pet food product is costly because of importing the product. Locally manufactured economy brands such as Pedigree and Nutripet cost Rs 70-100 per kg while imported premium brands such as Nestle Purina are priced Rs 100 and above. Super

premium brands such as Royal Canin (imported from France and also owned by Mars Inc) and Pro Pac are priced at about Rs 200 per kg. The retail penetration is low and the market is concentrated in urban areas. Pet shops are small in size and often our distributors have to double up as sales agents. Despite the availability of an assorted range and a fairly steady growth, the dog food market is largely scattered and untapped, and has marketers grappling with distribution challenges and using below-the-line strategies.

Opportunity
The pet food and pet care products market in India is estimated to be worth over Rs 908 million out of which the Indian pet food market is large estimated to be in the tune of Rs 150 million. It is estimated that India has around 4 million pet dogs and the consumption of pet foods is at 4 lakh tons per annum. That is a big market and is expected to grow at around 35% per year. The percentage of households owning a dog has increased steadily over a period, rising from 14 per cent in 1998 to 16 per cent in 2002. That said demand for prepared pet food remains largely untapped, as only about 10 per cent of dog owners feed their pets prepared food.

Threat
Due to the bird flu scare the government cut down the imports and it was difficult to survive the market as all the product is imported to India. Nestle Purina pet care company is trying to have beef free products in India as per the norms. Supermarkets offering own-brand pet foods, thus contributing to competition. Pet owners feed their pet home food and thus cutting the market share. Indian government can change the policy any time as they have done it before .