Nestle India uses a multi-level distribution system to distribute its products throughout India. Products move from Nestle factories to regional warehouses called "mother godowns" and then to distributors, re-distributors, wholesalers, and finally retailers where consumers make their purchases. Distributors are a key part of the system and must meet criteria like capital investment, experience in FMCG, and infrastructure for storage. They earn margins of 5-6% and sell to wholesalers and retailers who also earn margins. Nestle trains salespeople throughout the system and uses schemes to promote sales to consumers and trade partners.

1. CHANNEL & DISTRIBUTION
SYSTEM OF NESTLE INDIA LTD
Presented By:
Geeti Gourav Pati
Anshuman Nanda
Ashish Trama
Sourav Raj Singh
Ashwini Mahakur
Damrudhar Sahu*

2. COMPANY PROFILE:
 A Swiss multinational food and beverage company headquartered
in Vevey ,Switzerland.
 Products include baby food, bottled water, breakfast cereals,
coffee and tea, confectionary, dairy products, ice cream, frozen
food, pet foods, and snacks.
 Beverage Partners Worldwide with The Coca-Cola Company
 Nestlé with Colgate-Palmolive.
 Biggest competitor Cadbury.

3. Nestle's Principle:
Nestle is based on the principle of decentralization,
which means each zone is responsible for the
efficient running of its business - including the
recruitment of its staff.

4. Nestle India:
Milk Products &
Nutrition
Beverages Prepared Dishes
& Cooking Aids
Chocolates &
Confectionary
Nestle Milk Nescafe Classic MAGGI 2-MINUTE
Noodles
Nestle Kitkat
Nestle Slim Milk Nescafe Sunrise
Premium
MAGGI Imli
Pichkoo
Nestle Munch
Nestle Dahi Nescafe
Cappuccino
MAGGI Sauces Nestle Bar One
Nestle Bhuna Jeera
Raita
Nescafe Sunrise MAGGI Healthy
Soups
Nestle Milky Bar
Nestea Nestea Iced Tea MAGGI CUPPA
MANIA
Nestle Polo
Nestle Milkmaid MAGGI Vegetable
Atta Noodles
Nestle Eclairs
Nestle Everyday
Whitener
MAGGI Pazzta Nestle Alpino

5. Distribution Channel
Mother
Godown
Carriage & Forward Agency
Super Stockist
Distributor
Re-Distributor
Whole salerRetailer
End Customer Retailer

6. Criteria to be a channel member:
Capital Investment
 Distributor:40-50 Lakhs
Relevant experience
 3-5 year experience in FMCG sector is preferred
 Distributor should not be dealing in Competitor’s product
 Should handle entire (stock keeping unit )
Infrastructure
 Godowns/Storage space with appropriate refrigeration as per product
needs
 Delivery vehicles, Salesmen, ETC.

7. Distribution margin:
DISTRBUTOR WHOLESALER RETAILER
5-6% 1.5-2% 7-8%

8. Distribution point in
Bhubaneswar:
 Shree Ram Enterprises
 Distributor:Mr. Bikram Kumar Jain (Proprietor)
 Products Distributor-Nestle tea, coffee machine, maggi,
sause, coffee, milk made, chocolate
 BADAGADA BRIT COLONY ROAD, BHUBANESWAR ,
KHURDA

9. Order Delivery System:
 Take the order in morning and delivery takes
place in evening or next day morning by
delivery boy.
 Appoint 8 delivery boy to deliver
 Having 6 delivery van

10. Counter Analysis:
Types of Counter
 Super Market
 Small Grocery Store
 Big Grocery Store
 Convenience Store
 Betel shop
 Medicine store

11. What are Schemes for retailer &
consumer?
 Promotional schemes to consumers & Trade Partners Such as
free packs for Consumers, gifts, bundling, price off etc.
 For retailer they provide some Coupon, Bulk discount ,
Additional Margin , Free packs

12. How they distribute?
Sales force of distributor is divided into 3
heads
1. Milk Products-A
2. Chocolates-B
3. Other products-C
• All the 3 teams visit the retailers once in a week on
different Days
• Sales executive of the company visit once in week
to each distributor to train sales man.
• Idea is to keep an eye in the distribution by
wholesaler and in certain specific cases to push
extra stock in the market.

13. Credit Policy:
• Distributors are termed as Cash Distributors because
the company charges the distributors before the stock
is delivered
• Company has connected the distributor online and
All the transactions happen online
• The distributor sells goods on credit; the period of
credit ranges from 1-2 week
• The wholesaler allows discount of 1% on cash
payment (company policy followed by the distributors).

14. Stock Policy:
 As per the company regulations the distributor is supposed to
maintain a stock of 3 weeks which monetary value is equals to
Rs. 30 lakhs for the distributor.
 A distributor place an order before 8 days & they received conformation
after 2-3 days & in that period they can negotiate.
 Distributor come under slow moving SKU’s clubs & retailer are in fast
moving SKU’s
 Company DUMPS significantly on the distributors, the distributor
has to mange the supply by the company

15. Lead period:
 Lead periods in providing stocks to the distributors, differs
from the SKU and quantity ordered (3-5 days)
 Some SKU’s like dairy products are delivered
correspondingly with taking order but some are sent from the
warehouses
 A higher quantity ordered has to be reload from the
Warehouse.
Return Policy:
 Company follows a policy of return when the product has
past its expiry date, damaged or has a defect
 Replenishment is done with cash and happens at the end of
every six months

16. Return on Investment:
 Company does not give any guarantee to the distributor
Storage policy:
 Distributor maintains Cold Storages and Deep Freezers for the
storage of the products.
 Distributor has to bear all expenses pertaining to Infrastructure
requirements.
Sales Force:
 The remuneration and all other expenses for sales force are
carried by the distributor.

17. How they give training to salesman?
Training programs for sales man of distributor:
 Nestle Quality System
 Good Warehousing Practices (GWP)
 Good Distribution Practices
Major aspects of the training program are:
1. Stocking as per norms
2. Good Warehousing practice
3. Accounting
4. Handling of Bad goods
5. Temperature control for chocolates and dairy products

18. Thank You