Instant noodles: Rivals turn the heat on Nestle's Maggi
Maggi has been the only show in town when it comes to noodles. Today, this space has been inundated by a number of brands. BE takes a look at what's cooking.
Which makes Maggi noodles all the more of an oddity. It’s the last man standing, a survivor, a brand that created and dominated a category throughout its existence. Along the way, it lost a few of its launch flavours like Capsica, and even made a few disastrous missteps like the ‘sweet’ noodles and the change of flavour in the flagship for a brief period in the mid-90s. But in the near two decades of its existence, Maggi has been the only show in town when it comes to noodles. Even today, it leads the pack with a 90% plus share. The brand has been successfully extended into sauces, soups and pasta.
The big difference between now and even half a decade ago is there is finally a well defined pack for Maggi to lead. Many other marketers want their forks in the noodle bowl including those that fight Maggi’s parent company Nestle tooth and nail across several other categories. There are finally signs of a battle raging in the Rs 1,000 crore instant noodle market with aggressive competitors like HUL and GSK.
HUL has entered the fray with Knorr Soupy Noodles, GSK launched Foodles and though ITC denies any interest in the space, the market is rife with rumours of the Sunfeast brand being extended into the noodle category. Other brands that may not have the huge money power of the multinational giants but which are piggybacking on the opportunity afforded by modern trade are Ching’s Secret and Smith & Jones from Capital Foods and the Future Group’s private label brand Tasty Treat. Also present in certain pockets for nearly a decade are the likes of Wai Wai and Top Ramen.
The instant noodles category is growing at +20% CAGR. The large size of the category and its growth rate presents an attractive opportunity for brands. Shubhajit Sen, VP - marketing, GSK says, “Category penetration of 40%+ indicates noodles widespread acceptance as a regular grocery item for many Indians. Noodles per se have become accepted by Indians — it can be seen in its various avatars as street food and food you serve to guests, give your children to take to school etc.” What makes Foodles unusual is that it is being offered under the Horlicks brand.
Explaining the decision, Sen says, “Horlicks was always sweet, even the biscuits and cereal bar. We wanted to extend the brand into a savoury or salty kind of product and Foodles was an opportunity to do that.” Foodles was first launched in the South and Sen says it has achieved 5% of market share within three months. According to GSK, it has managed to garner 3% within the first month in the east. Knorr’s Soupy Noodles presents a chance to accomplish several targets with just one product.
Known only for soups, which constitute a minuscule category in India, HUL is betting on the soupy noodles to expand the footprint of the Knorr brand to areas beyond urban markets. “Noodles in India is about 12 times bigger than soups and everyone who consumes soup also knows about noodles. A typical Indian family has 25-30 packs of noodles in a year, whereas soups are not too popular. It is mostly consumed by the higher SECs,” says Sidharth Singh, VP, packaged foods, HUL.
Ching’s Secret has a long, hoary history trying to take on the might of Maggi nearly a decade and a half ago with a more traditional Chinese noodle offering. While this found no takers, it is still part of the arsenal at Capital Foods. The marketer is fielding both Ching’s Secret as well as Smith & Jones, with the former aimed at a more youthful demographic. Ajay Gupta, CEO, Capital Foods suggests there’s enough room for everybody: “Maggi has not just established the category, but grown the market as well. There are a lot of consumers entering the category, which is seeing a 20-25% growth year on year.” While the main plank in urban areas is still convenience, people across small towns are hooked because of the sheer variety available.
However even before HUL and GSK, the relatively obscure Wai Wai has been very popular across the North East and the East. Wai Wai is built around the USP of being a genuinely instant noodle that can be eaten directly from the pack unlike Maggi which requires at least two minutes worth of cooking.
G P Sah, VP and CEO of Choudhary Group which manufactures Wai Wai says, “No other brand has such an option.” Sah even claims leadership in the North East, with Mi Mi a smaller variant of Wai Wai at the second position, and Maggi a distant third. Not to be left behind are retailers like Food Bazaar that launched noodles under the Tasty Treat brand. According to Devendra Chawla, head, private brands, Future Group, “In our country where taste and food preference changes every 200 km, instant noodles has crossed this journey most effectively breaking the barrier.”
Through its long history, Maggi has burnt through a wide range of positioning lines and statements. When Maggi entered the country, Nestle used TV heavily to familiarise consumers with the brand. Its initial campaign ‘Fast to Cook, Good to Eat’ became a catchphrase and ‘2 Minutes’ gesture of the Maggi mom was widely imitated. The 25th anniversary campaign around the theme ‘Mein aur Meri Maggi’ acknowledged a generation that has grown up on the brand and which is now poised to include it in the diet of its children.
For its Soupy Noodles, HUL is occupying a plank that’s not dissimilar to what Maggi started with: a mini meal when children return from school and before they leave for play or tuitions. But HUL hopes to build traction for the soup habit via the already fairly well established noodle habit.
“The powder in Knorr Soupy Noodles is not simply a tastemaker or spices” says Singh, but actual soup powder, with a taste and consistency similar to Knorr’s flagship product. “It is a quick hunger filling snack. Just soup is not a good for that time and nor do kids find it particularly exciting. But when you give noodles with a combination of soup they like it. This is our position of strength as well as differentiation,” explains Singh. HUL has roped in Kajol to help push Knorr soupy noodles.
Anaheeta Goenka, ED, Lowe says, “When a kid is given something new to eat he is quite fussy about it. So to engage better with them and to make the experience fun, we used the route of a game play in the TVC. The ‘Thoda Khao, Thoda Piyo’ proposition helped the kids understand how to consume the product and made it fun at the same time.”
In the case of Foodles, nutrition is going to be the differentiator, remaining consistent with the plank already occupied by Horlicks. “We are targeting those consumers who may have hesitated from participating in this category because of any lingering doubts. We have positioned Foodles as the more nutritious noodles,” says Sen. So besides the regular flavour, Foodles will also be available in a multi-grain option. While health is a big concern, Nestle’s own Dal Atta variant was not well accepted due to the difference in taste. Maggi on the other hand is going deeper into flavour-based variants inspired. The first of these is Thrilling Curry.
“While masala is still the most popular, the thrilling moments that people shared with us as part of the ‘Mein aur Meri Maggi’ campaign has given us ideas to launch a number of new variants in the coming months,” says Shivani Hegde, GM - foods, Nestle India.
The masala flavour is being keenly contested by Captial Foods as well via its Smith & Jones brand. Ching’s Secret is aimed at youth between ages 16-25, where there is a demand for something spicier. “Maggi was the leader for kids, but as they grow up their needs change and that is the space we have tried to occupy with Ching’s Secret,” says Gupta. Another brand banking on masala is Tasty Treat that offers spicy masala and have flavours like Punjabi masala and Mumbai masala waiting in the wings to cater to local tastes.
Apart from variants and positioning, most players acknowledge that trial is the ultimate moment of truth. HUL have ‘food ambassadors’ at modern retails outlets to encourage sampling. Ching’s Secret has gone the college route to get closer to its youth demographic. “We have sponsored a large number of college shows in the country last year and are also targeting the youth aggressively through Facebook,” says Gupta. The Ching’s Secret community on Facebook has over 118,000 fans following the brand.
While the new entrants sweat it out, Nestle isn’t sitting tight. Continuing its efforts of engagement, it organised a nutrition awareness drive in the largest slum in Asia, Dharavi a few months back. “We spoke to people about the importance of health, hygiene, micronutrients and gave them an opportunity to understand the product,” explains Hegde. Nestle also does trade activities involving education of shopkeepers, direct contact programs and initiatives like the Nestle Minithon to engage with consumers.
When Nestle launched the Chottu Maggi the intent was wider reach, “we wanted more consumers to have access to the product and enjoy the Maggi experience,” says Hegde. While Nestle took this step based on insight and market research, other brands today, know the importance of a smaller SKU in pushing the brand. Wai Wai’s variant Mi Mi is in the Rs 5 space. While the product was largely targeted towards kids, Sah says it also helped get more people to sample the product. For Capital Foods, single pack sizes are important for acceptance of the brand in non-urban cities. “The aspirations are same, there is a lot more money in non-urban areas and most of it is going into foods,” says Gupta.
However in the case of Knorr Soupy Noodles, it is a case of demand being more than supply. Currently their product is available only in single packs of Rs 10, however Singh of HUL says that the demand for bigger packs is getting louder, “The bigger pack is being demanded by households with children. But we haven’t been able to get into more markets as we don’t have enough capacity to expand,” says Singh predicting nation-wide availability by the end of June.
Wai Wai will be rolling out its product across the country soon. It has set up manufacturing plants in Sikkim, Guwahati and Rudrapur to help keep up with the demand. When it moves beyond the North East into the rest of the country Sah thinks TV would be the best medium to give them the recognition. “TV is very important to help our brand be recognised across kiranas and convenience stores. Just being present in modern trade will not give us sustainable value,” he says.
While it is still early days for the category, the action in this space promises to get louder. The success of noodles has made way for other ready-to-cook products like pasta and macaroni. While Maggi has already entered the fray with its offering, the new entrants are also eyeing this space with great interest. Only time will tell if ghar ka khana can ever be substituted with pack se khana.