With premium coffees and pricey hair serums, FMCG firms woo the well-heeled

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coffee consumption. The company said India is one of its fastest-growing coffee markets. Today, premium products account for 12-13% of the company’s sales—Nestle expects this number to touch 15-16% in the medium term and 20% in the long term, said Suresh Narayanan, chairman and managing director, Nestlé India said.

Nestle has identified premiumization as one of the growth engines that will accelerate its India business, the company had said earlier. Also read: FMCG cos expect plentiful rains, new govt to drive consumption: Nestle India CMD Emerging categories such as premium coffee, health science, nutrition and pet care will drive Nestle's premium play in India. The company is now present across all these categories in India, apart from selling mass-market brands such as Maggi and KitKat.

“The market outlook is that quite clearly, premiumization is here to stay. The bottom end of the pyramid is also doing relatively well... I think brands have to fight for mindspace because of the bandwidth of choice between organized players, regions regional competition, and D2C (direct to consumer) has become wider," Narayanan told reporters earlier this week.

More companies are now chasing such consumers, and it is easy to understand why. A recent report by venture fund Elevation Capital said India’s top five million households, comprising 2% of the population, spend approximately $40 billion every year in discretionary purchases. Over the next decade, this pool will expand to $100 billion as their incomes grow, it said.