Fascinated by retail. Avid follower of Retail news. Keen observer as a customer.

(IMP: All comments and opinions voiced in this blog are purely based on my understanding of things. I do not intend promote or defame any particular brand/company.)

Saturday, September 25, 2010

A cup of noodles

Note: The statistical data mentioned in this post was taken from various newspaper articles.

Instant noodles segment in India seemed to have reached a phase of saturation with only one dominant player and a struggling runner up. Suddenly something happened and the instant noodles segment found its rebirth with many biggies flooding the retail outlets with new brand of Instant noodles. The Indian customer seemed to have grown demanding and was desperately seeking for alternative options. A ideal Indian family is now exposed to various kinds of information. An average Indian family spends 1.02% of their annual income on eating out. This makes the kids aware that there is more to noodles than a yellow yummy ‘Maggi’. This seemed like an ideal time to hit the market for companies waiting patiently for the maggi madness to reduce.  The instant noodles market in India is valued at around Rs 1,000 crore. The category is growing at 20 per cent annually. The main players are Maggi, Knorr Soupy Noodles and Foodles. Other competitors are Capital Foods (Ching’s Secret and Smith & Jones), Future Group (Tasty Treat), CG Foods (Wai Wai), Cup noodles and Nissin Foods (Top Ramen). Entering the competition is ITC with its Sunfeast Yippee noodles. The noodle leader isn’t keeping mum and is investing Rs 950 crore to set up two units to manufacture instant noodles and infant foods in Karnataka and Haryana.

While the new entrants are just filling in the market gaps with different flavours and exciting new alternatives, maggi is saddled with the old flavour as it is caught in the dilemma of catering to existing huge loyal customers and redefining itself with new flavours. It had changed the flavour of the classic maggi and was faced with strong opposition from its customer base. It reverted back to the old flavour but managed to slip in the “Healthy calcium” tag and added a variant “Atta noodles” to avoid blows from the health watch groups in the country.  It later introduced “Rice noodles” and now has introduced cup noodles. All this to remain in the market and guard its market share.  It also did a ‘meri maggi’ campaign to reinforce the brand loyalty.

But, did it wait too long to introduce new variants? Somehow the idea of cup noodles and ‘maggi’ don’t gel well. Its classic taste is so strongly positioned in the minds of the consumers that it new flavours might find it difficult to get accepted. My supposition is that the customers will retain the classic maggi purchases but reduce the quantity in their monthly basket to replace it with the new entrants catering to the same segment. This means maggi is likely to lose its ground. But, maggi will be a tough fight with its 70% market share.

PS: Instant noodles were first invented in Taiwan in the 1958. For reading about the history of Instant noodles click here


  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP