Download pdf - How Maggi Noodles Became India

How Maggi noodles became Indias favourite comfort food!The noodle category has been growing over the last few years at a commendable pace and the growth is attributed to various factors like working couples, time poverty, increasing disposable income and the desire of the younger generation to try something different. Maggi Noodles was launched by Nestle India in 1982 as 'Maggi 2-Minute Instant Noodles' under the prepared dishes category. It used the tag line fast to cook, good to eat' to woo its target group, along with its catchy jingle Mummy Bhook Lagi Hai' which helped in positioning the brand. Thus, becoming the runaway favorite of children. Off late mothers across India have shown growing concerns over the empty calorie content and low nutritional value of Maggi Noodles. However, the recall power of brand Maggi is still very strong.The Swiss brand Maggi (owned by Nestl) makes a variety of productsincluding bouillon cubes, various Asian-type sauces, and powdered soupsbut in India the word is essentially synonymous with 2-Minute Noodles. Maggi noodles first appeared on the market here in 1983, and over the next 25 years, they enjoyed a 90% of the instant noodle market (that share has dropped in the last few years, thanks to the introduction of other brands like Top Ramen and Wai Wai).Maggi offered convenience to the housewife and at the same time did not undermine her involvement with the kids. The masala flavor made its way in to the minds of the consumers, and Maggi found a place in the monthly budget plan of a household. During the nineties competitors like Indo-Nissin launched Top Ramen - a similar product but with a twist in the taste. This ate into Maggis market share. Maggi tried innovating and a new flavouring agent named tastemaker was added. However, this did little to recapture their lost market share and Maggi Noodles Masala was completely phased out. For two years, Maggi experimented with its noodles and a number of new variants were tried, including the Maggi Macroni. However, none of these innovations helped Maggi regain its erstwhile glory.According to research firm Euro Monitor, Nestl India is the dominant player in noodles with a 60 per cent share of retail value sales in 2013. Brand 'Maggi' has performed very well due to the wide distribution network. It also enjoys consumer loyalty owing to the fact that it was the first instant noodle brand to be introduced in India.Finally it reintroduced the original Maggi Noodles Masala in 1999, but this time keeping in mind the market trend, they gave it a twist of healthier and tastier. This proposition did wonders for them and within a year, it went on to becoming the market leader. Nestl India has also been proactive in launching new variants, such as Maggi Dumdaar noodles, Maggi Atta noodles and Maggi Curry Noodles. Maggiuses various strategies, including the NestlMaggiHar 2-minute mein Khushiyan promotional campaign, to increase sales and maintain its undisputed leadership in the instant noodle category. The campaign gave consumers opportunity to win mobiles, cameras, vacation vouchers, microwaves, washing machines and cars. Nestl focuses on point-of-purchase displays and its visibility in the small and independent retailers is the highest compared with other brands. Nestl provides better credit solutions to retailers which other companies fail to provide.However, it has been facing competition from new entrants like Hindustan Unilever's Knorr and ITC's Yippie who are looking to take a significant share in the Rs 2,200-crore instant noodles market. The manufacturers are targeting rural consumers with smaller pack variants and also the urban consumers with health and wellness offerings such as wholegrain, atta (wheat flour), real vegetables and recent one like oatnoodles. Noodlesin India saw value growth of 19% in 2014, taking sales to Rs52.8 billion. This growth was slightly lower than that seen in 2013. However, the category is still showing a strong double-digit performance. Demand fornoodlesis credited to the hectic lifestyles of consumers asnoodlesprovide a quick meal with nutrition, whilst most Indian food take a long time to prepare. Secondly, with consumers getting more heath conscious,noodlesmanufacturers launched healthy variants in 2014.Competitors are increasing distribution and penetration into smaller cities and rural India will continue to grow at a rapid pace. Focus on health and taste by manufacturers will drive growth in the coming years in urban India. Disposable incomes and modern trade will also help, and the government outlook for the next five years is very vibrant.Now it is for us to see how Maggi manages to retain its market share in the face of rising competition from FMCG majors.Category DataTable 1 Sales ofNoodlesby Category: Value 2009-2014INR million200920102011201220132014

ChilledNoodles------

FrozenNoodles------

InstantNoodles14,401.0219,273.8324,961.7331,028.0737,809.6245,561.89

- Cups/Bowl InstantNoodles206.94240.27274.00312.45352.91396.26

- Pouch InstantNoodles14,194.0819,033.5624,687.7230,715.6137,456.7145,165.63

PlainNoodles4,368.964,849.935,344.375,904.426,502.227,227.56

SnackNoodles------

Noodles18,769.9824,123.7730,306.1036,932.4944,311.8452,789.45

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table2 Sales ofNoodlesby Category: % Value Growth 2009-2014% current value growth2013/142009-14 CAGR2009/14 Total

ChilledNoodles---

FrozenNoodles---

InstantNoodles20.5025.90216.38

- Cups/Bowl InstantNoodles12.2813.8791.48

- Pouch InstantNoodles20.5826.05218.20

PlainNoodles11.1610.5965.43

SnackNoodles---

Noodles19.1322.97181.24


Table 3 Brand Shares ofNoodles: % Value 2011-2014% retail value rspCompany2011201220132014

MaggiNestl India Ltd60.5859.6761.6463.11

SunfeastITC Ltd3.405.308.3110.81

BambinoBambino Agro Industries Ltd6.435.845.435.10

Top RamenIndo Nissin Foods Ltd4.693.913.352.50

MTRMTR Foods Ltd1.591.471.351.31

Wai WaiCG Foods India Pvt Ltd0.420.500.671.26

Ching's SecretCapital Foods Ltd1.471.351.271.19

KnorrHindustan Unilever Ltd2.492.081.790.83

Smith & JonesCapital Foods Ltd0.250.330.430.65

Taii-PaiiMaruthi Quality Food Products Ltd0.240.300.420.60

SavoritSavorit Ltd0.640.600.580.56

NissinIndo Nissin Foods Ltd0.600.530.510.50

BluebirdUnited Agro Industries0.620.520.440.40

HorlicksGlaxoSmithKline Consumer Healthcare Ltd1.591.160.850.38

Mom's ChoicePrayag Foods Pvt Ltd0.330.330.280.25

LeongLeong's Food Products0.100.080.060.04

SamsSams Food Products Ltd0.080.060.050.04

Wai WaiNepal Thai Foods Pvt Ltd----

Private labelPrivate Label1.161.191.231.26

OthersOthers13.3214.7811.339.21

TotalTotal100.00100.00100.00100.00


Table 4 Forecast Sales ofNoodlesby Category: Value 2014-2019INR million201420152016201720182019

ChilledNoodles------

FrozenNoodles------

InstantNoodles45,561.8950,607.0156,045.9361,674.4667,497.0271,983.56

- Cups/Bowl InstantNoodles396.26407.72417.71427.57436.67438.72

- Pouch InstantNoodles45,165.6350,199.2955,628.2261,246.8967,060.3571,544.84

PlainNoodles7,227.567,385.937,558.367,747.107,941.008,036.52

SnackNoodles------

Noodles52,789.4557,992.9463,604.2969,421.5575,438.0180,020.08

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources