Middle class consumption may have been lacklustre in the past few quarters, but the India consumption story is far from over, says Nestle India chairman and MD, Suresh Narayanan. "India still has 60% share of GDP coming from consumption, albeit a little lower in the last couple of quarters. The things companies need to watch out for is recalibrate some of their brands and offerings in order to make the affordable segment more prominent in their marketing plan. Secondly, accelerate the journey of premiumisation, because there is clearly an opportunity there."

Narayanan attributes the consumption slowdown down to the food inflation, which has compelled consumer companies to increase prices. "Food inflation has impacted household budgets. The second is real wages. As published in various surveys, wages have either been stagnant or have grown marginally. Third is, we seem to be seeing post COVID, a K-shaped recovery. So, the premium end of the market is growing quite well and strongly. The belly of the market, mid-stream and popularly priced products seem to be languishing in terms of relative growth. This has manifested itself in an overall volume decline as well. As a result of this overall organic growth has also languished in the last couple of quarters."

Narayanan, however, is optimistic about consumption bouncing back. "With expected good monsoons, one is expecting that the rural sector, which has been relatively better, starts to improve further. With the overall economic growth coming back, in the coming quarters there will be more disposable income and there can be an improvement in overall consumption."