Grocery

S U P E R M A R K E T

B U S I N E S S

Constant innovation –
width-wise and depth-
wise – will drive growth
for instant noodles.

Tap your noodle

O
By Juhi Sharma
ver two decades ago, Indians were
introduced to the phenomenon
of two-minute meals. And for
long, the first mover has reaped
the fruits of an instant revolution.
Now, however, more and more companies are put-
ting on thinking caps to tap the cross-functional
appeal of instant noodles.
As Maggi turns 25, it also marks the brand quickly became a name
the silver jubilee of a category-chang- synonymous with instant noodles,
ing journey. In the mid ‘80s, when much as Xerox is with photocopying.
Nestle India pioneered the conve- Enthused by Maggi’s tremendous in-
nience food segment in the coun- roads into Indian households, over
try with the introduction of Maggi, the years, a number of players have
jumped onto the bandwagon, add-
ing innovation and offering more
choice in the category.
Until 1988, the Indian instant
noodles category was clearly monop-
olised by Maggi in the absence of any
local competition. Until Japanese
noodle giant – Nissin Food Products
Co. Ltd – entered the domestic mar-
ket through an Indian subsidiary,
Indo Nissin Foods Ltd.
Later in 2005, CG Foods India
Pvt Ltd, a member of the Nepal-based
Chaudhary Group of Companies,
launched its instant noodles brand
nationally. Further populating and
adding excitement to the category is
Capital Foods, the leading processed
food and private label manufacturer,
which forayed into the segment in as
recently as 2008.
Besides these, the category today
also accommodates a host of pri-
vate labels offered by modern food
and grocery retailers such as More,
Spencer’s, Food Bazaar, Reliance
Fresh etc. Besides them, imported
brands such as Wan Thai Foods In-
dustry Co., Ltd.’s Yum-Yum instant
noodles, Ko-Lee instant noodles etc.
also share retail space in the category
now.
Category status
According to Euromonitor In-
ternational’s statistics in the report
‘Noodles in India’ published in
September 2008, the market size
of instant noodles was around Rs
11346.3 million in 2008, of which
Rs 11171.7 million was the share

46 • PROGRESSIVE GROCER • May 2009 AHEAD OF WHAT’S NEXT WWW.PROGRESSIVEGROCER.COM

led by pouch instant noodles and re-
maining Rs 174.6 million was held
by instant cup noodles.
Euromonitor further forecasts
that the pouch instant noodles sub-
category will grow to Rs 14263.8
million and cup instant noodles’
market share will touch Rs 209.3
million, resulting in overall category
innovation has been reasonably good.
“However, the market is still highly One of the biggest
dominated by the masala variant of
instant noodles. But encouragingly, innovations has been
other variants and new launches are
also picking up,” he notes. the extension of
Commenting on the pace of in-
the instant noodles
category from pouch
novation, Ajaay Gupta, MD, Capi-
tal Foods, opines, “Over the last few

size growing to Rs 14473.2 million,
in 2009.
The report also highlights that
the segment witnessed a growth rate
of 23.5 percent in 2007-08 and was
expected to grow at the rate of 27.9
percent in the year 2008-09. It can
be safely assumed that this accelera-
tion in growth will be driven primar-
ily by value addition and innovation,
relaunches and makeovers coupled
with convenience, taste and afford-
ability features.
Visible trends
In its initial days, instant noodles
were available with taste making gar-
nishes of only two flavours – masala
and chicken. A quarter of century
hence, the category has evolved – not
just in pack sizes but also flavours and
garnishes. The segment can now be
clearly segregated into pouch instant
noodles and instant cup noodles.
Going by the market trends, one
finds that almost every player has
added an ingredient of innovation to
the segment. So, what has been the
pace of innovation and value-addi-
tion that has helped in leveraging the
category?
According to M N V V Prasad,
DGM, sales and marketing, Indo
Nissin Foods Ltd., the pace of
years some great movement and in-
novation has taken place in the cat-
egory. With increasing number of
players, more competition has been
added, which gave birth to aggres-
sion, which is turn propelled inno-
vation. In simple words, when one
player introduces an innovation,
typically another tries to compete
and innovates further, which leads
to a very exciting cycle of innovation
being unleashed.”
Speaking for retailers, Thomas
Varghese, CEO of Aditya Birla Re-
tail, points out that the key audience
for the instant noodles category con-
tinues to be children. “Keeping that
in focus there has been a high level
of innovation as novelty is an impor-
tant ingredient for the growth of any
category.”
One of the biggest innovations
has been the extension of instant
noodles category from pouch to cup
noodles, which are almost like ready-
to-eat noodles. Unlike pouch instant
noodles, which require cooking, cup
instant noodles merely require the ad-
dition of hot water to the cup. Indo
Nissin Foods ensured a first-mover
advantage with the launch of instant
cup noodles under the brand, Cup
Noodles. Today Indo Nissin’s Cup
Noodles are available in five variants
– Spicy Veg, Mast Masala and Tangy
to cup noodles.
Chicken in 80g cups for Rs 25, To-
mato in a 50g cup for Rs 18, and two
recently added variants – Pani Puri
and Manchurian – in 50g packs at
Rs 18 each. It also offers a sub-brand
called Mug Noodles – available in a
50g pack for Rs 11 – under the Cup
Noodles range.
In 2008 category leader Nestle
India extended the Maggi brand to
the cup instant noodles section with
the launch of Maggi Cuppa Mania
instant cup noodles in two variants –
Masala Yo and Chilli Chow Yo – in a
serving of 75g cup for Rs 25.
Following Maggi’s product ex-
tension, recently CG Foods India
Pvt Ltd launched their cup noodles
in two flavours – Veg and Chicken
– under their Wai Wai-1-2-3 pouch
instant noodles brand in a 65g cup
for Rs 20 each.
Expressing his views on the in-
vention of cup noodles, Gupta says,
“It has been a great innovation and
movement from pouch/bag to cup
noodles. However, our belief is that
price sensitivity is very strong for cup
noodles. In terms of need, cup noo-
dles are more of product consumed
by people on the move. At this point
of time, Indians as consumers are
not consuming a lot of noodles on
the move; noodle consumption is
largely restricted to homes. So, for
consumers, paying a premium for
cup noodles doesn’t make sense, as
they are priced slightly higher than
pouch noodles.”
Commenting on the acceptance
level of cup noodles, Varghese shares,
“Cup noodles were introduced on a
convenience plank, and are yet to
gain mass acceptability. However,

Revenue contribution by companies operating in the instant Revenue contribution by companies operating in the instant
noodles category at More food & grocery stores noodles category at Spencer’s food & grocery stores
90

80 Wai Wai
ital Imported
Cap s 1.70% 1.30%
d
Foo Others
70 0% 0.10%
4.6
Cup instant noodles
Bag/Pouch instant noodles

60

Priva
50 te La
bel
8.80%
Indo Nissin
Foods
40 10.90%

Nestle India
30 72.50%

20

10

0
Nestle India Indo Nissin Foods CG Foods India

WWW.PROGRESSIVEGROCER.COM AHEAD OF WHAT’S NEXT May 2009 • PROGRESSIVE GROCER • 47

in modern trade channels, take off
for cup noodles is higher by around
seven percent than in traditional gro-
cery stores, where cup noodles’ sales
are around three percent of the over-
all instant noodles sales. The seg-
ment has been growing steadily but
the penetration levels are still low.”
Another form of innovation has
been introduction of more variants
and flavours in the pouch noodles
segment. Euromonitor states that
the major flavours in instant noodles
segment in the domestic market
are still Masala and Chicken. These
two flavours were among the first
launched in the market, and have re-
tained their share due in part to their
first-mover advantage. Masala is the
most popular flavour, simply because
most Indian consumers prefer to eat
spicy food, and the flavour makes
no distinction between vegetarians
and non-vegetarians. Chicken is the
second most popular, but has a re-
stricted consumer base because India
has a high proportion of vegetarian
consumers.
Over the years, besides these two,
there have been many other flavour
launches as well. For instance, Maggi
has widened its pouch noodles port-
folio with two additional flavours –
Tomato and Curry. In recent years,
the brand has renovated its offerings
to provide 20 percent of the RDA
(Required Dietary Allowance) of
48 • PROGRESSIVE GROCER • May 2009 AHEAD OF WHAT’S NEXT WWW.PROGRESSIVEGROCER.COM
calcium and protein for the core tar-
get group.
Meanwhile, continuing on its
DNA focus of wellness and nutri-
tion, Nestle India also launched
healthy whole-wheat noodles, la-
belled as Maggi Vegetable Atta
noodles. One 85g pack of Vegetable
Atta  Noodles  provides dietary fi-
bre equal to three prepared chappatis
(20g each). Following Vegetable Atta
noodles, the company also rolled
out Dal Atta Noodles. Maggi in-
stant noodles’ standard variants are
available in several apck sizes – a
50g pack for Rs5; 90g pack for Rs
10, 360g pack for Rs 40, 540g pack
for Rs 59 and a pack of 720g for
Rs 78. Maggi Atta Noodles 85g pack
is priced at Rs 15 and 360g pack is
for Rs 55.
A relatively recent addition to
the Maggi portfolio is rice noodles,
labeled as Maggi Rice Mania Noodle
in two exciting flavours of Lemon
Masala and Shahi Pulao. The Rice
Mania range offers goodness of rice
and at least 60 percent energy from
carbohydrate, 10 percent from pro-
tein and not more than 30 percent
from fats.
To be sure, credit for diversifying
the category doesn’t belong to only
Maggi, though it is clearly the seg-
ment leader. Other brands – such
as the second oldest player and the
inventor of the method of produc-
ing instant noodles, Indo
Nissin Foods – fur-
ther enlarged the
segment with
its basket of in-
novations. The
company cur-
rently offers pouch
noodles under the
brand Top Ramen
in Macho Masala,
which is available
in pack sizes of 80g,
160g, 320g and 480g
for Rs 9, Rs 18, Rs
32 and Rs 50 respec-
tively; Funky Chicken
and Oye Tomato in
80g and 320g packs
for the same price as
Macho Masala, and a
Category king Maggi’s
Cuppa Mania is a trendy
ally of today’s multi-
tasking generation.
The most-preferred
flavours in the
instant noodles
category in India
are still Masala and
Chicken.
sub- brand called Top Ramen Curry
veg, premium vegetarian noodles in
rich gravy, for Rs 14 in pack size of
80g and Rs 35 for a pack of 320g.
On the topic of innovation, CG
Foods deserves special mention be-
cause of its unique offerings. The
company offers brown ready-to-eat
noodles that can be eaten without
cooking, just with the addition of
taste maker and a small sachet of
edible, flavoured oil available in the
pack. In the RTE format, the com-
pany offers brands and variants such
as Wai-Wai 1-2-3 noodles in Veg,
Spinach and Chicken flavours in
75g packs for Rs 10; Wai-Wai Quick
noodles in the flavours of Chicken
Curry, Pizza and Masala Curry in
75g pouches for Rs 10; Golmol noo-
dles offering veg and chicken vari-
ants in a pack of 65g for Rs 7; and
Mimi noodles in Veg and Chicken
flavours for Rs 5 in a 50g pack. CG
Foods’ brand portfolio also has Wai-
Wai X-Press instant noodles, which
is an easy-to-cook format similar to
Maggi and Top Ramen. It is avail-
able in Veg and Chicken flavours in
100g packs for Rs10 and 50g packs
for Rs 5. wards more flavours, though there is
Reecent entrant Capital Foods
has gone a step ahead on innovation,
which has led to a shift from regular
or standard masala, chicken and to-
mato flavours to authentic Chinese-
flavoured noodles. Capital Foods
currently offers two instant noodles
ranges. One is a premium Chinese
range under the Ching’s Secret brand,
which offers three scrumptious Chi-
nese flavours – Schezwan, Manchu-
rian and Hot Garlic – in 75 g packs
for Rs15 and 300g packs for Rs 59.
Recently, it added a Chicken Roast
Garlic variant to the Ching’s Chi-
nese range in the same pack sizes and
price tags. Capital Foods also offers
Masala, Chicken and Curry Noodles
under the popular range, which is
branded Smith & Jones. This range
offers instant noodles in pack sizes of
75g and 300g for Rs 10 and 39 re-
spectively. In February ’09, the com-
pany introduced another variant,
namely Masala Tadka Marke, under
its popular instant noodles range.
Elaborating on the recent
launches, Gupta remarks, “Our big-
gest innovation has been the intro-
duction of Chinese instant noodles.
We actually created a sub-category
within the instant noodles category
by expanding the consumption base,
as our offerings target grown ups –
individuals aged between 14 to 25
years. We have been able to establish
that there is market beyond masala
noodles, and this has partially helped
the category to grow by moving to-
still a long way to go.”
“We have innovated under both
our ranges – premium and popular.
In case of Ching’s Chicken Roast
Garlic, we first decided to introduce
an innovation in the chicken variant.
We undertook a wide-ranging con-
sumer survey – to understand the
changing consumer preferences, the
fatigue levels they face with the regu-
lar variants etc. The idea behind in-
troducing Chicken Roast Garlic was
to enhance the appeal of the chicken
flavour. So, what more could we
add to it? We realised that garlic as
a herb is relished by most Indians,
so we infused roasted garlic with the
chicken to add some edge and offer
something clearly above the done-to-
death chicken instant noodles.”
Gupta points out that a similar
philosophy drove Capital Foods’
introduction of the Masala Tadka
Marke variant. “We wanted to of-
fer more than a conventional masala
pack. So we spiced up our regular
masala variant with the addition of
more spices and flavour, add some
edge to the offer, so to speak.”
The popularity of instant noodles
is certainly unquestionable. That is
evidenced by retailer interest in the
category as well. All major modern
food retailers now offer private la-
bels in the category, though only
in pouch packs. For instance, the
Aditya Birla Retail-promoted More
chain of supermarkets offers instant
noodles under the Feasters private
label, which includes variants such
as Masala in a 80g, 320g and 480g
packs for Rs 8, Rs 30 and Rs 43 re-
spectively; Chicken in serving sizes
of 80g, 320g for Rs 8 and Rs 30; Veg
Atta Noodles priced at Rs 12 and Rs
45 for pack sizes of 80g and 320g,
and more recently, Hot and Sour
Noodles for 12 and Rs 45 for packs
of 80g and 320g, respectively.
“The private label initiative
at More is focused on delivering
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exceptional value and providing a
comprehensive range to our custom-
ers,” says Varghese at Aditya Birla
Retail.
RPG Group-promoted Spencer’s
food and grocery stores offer instant
noodles under the in-store brand
named Smart Choice. Smart Choice
instant noodles are available in four
SKUs – a triple joy pack of 75g for
Rs 10; a 100g pack of Masala vari-
ant for Rs 10; a 200g pack of Masala
variant priced at Rs 20 and a 400g
pack of the same variant priced at
Rs 40.
Value addition in terms of pack-
aging has played an equally impor-
tant role in pushing consumption
in the category. Packaging introduc-
tions have added convenience, excit-
ing graphics, shelf stable functional-
ity, nutritional information about the
product and most of all, variations in
serving sizes to suit cross-functional
needs. It has also helped in pushing
impulse purchases, thereby generat-
ing awareness and wider consump-
tion. Today, pouch instant noodles
are available in a varying pack sizes
to suit varying needs – from small
pack sizes of 50g to 65g, to single-
serve pack sizes of 70g to 100g; a
pack of two noodle cakes or in pack
size that serves two of 150g to 200g;
large family pack sizes, serving four
of 300g to 400g; large value pack
sizes serving six of around 480g to
540g and a larger pack size serving
eight of around 720g. Cup noodles’
consumption is also being driven by
convenient and durable packaging
(available in a serving size of 50g to
More’s private label portfolio
not only offers popular flavours
but also an atta variant and a
recently-added Chinese Hot
and Sour option.
80g) and its RTE nature.
Elaborating on the importance
of pack sizes, Gupta at
Capital Foods
says, “Typi-
cally, pack
sizes de-
termine
the con-
sumption
pattern;
initially, one
starts with a
single-serve
pack or an
even smaller
pack for trial
and then gradu-
ates to large
family packs.”
“We entered
the segment only
about six months
ago, so at this point
of time it is the sin-
gle-serve pack that
constitutes most of our
sales revenue. But, since
instant noodles’ consumption
is growing by leaps and bounds, it
will be the family pack that will be A pioneer of cup noodles, Indo
purchased more in the days to come. Nissin offers varying serve sizes.
Just to illustrate this point, during
the first four months of our rollout, also safe and suitable for the product.
single serve packs accounted for 90 However, there is certainly room for
percent of our sales; in the last two improvement.”
months the ratio has transformed to “Cup noodles are specifically
50:50 for single-serve and large fam- package-driven products, as in its
ily packs.” case it is the package that serves as
“The family pack size that serves a preparing utensil and serving dish.
four constitutes approximately 40 Since cup noodles is a budding sub-
percent to our sales revenue pie in the category as of now, more packaging
instant noodles category,” discloses innovations are expected to take
Varghese at Aditya Birla Retail. place in the future,” he adds.
Gupta notes that along with On this, Manoj K Sharma, GM
pack size choices, appearance of the of sales and marketing at CG Foods
pack and material used in packaging India Pvt. Ltd, says, “Packaging defi-
(which is also an innovation) also nitely plays a key role in any product’s
drive considerable consumption by growth. We have recently launched
grabbing eyeballs in retail stores and pouch instant noodles enriched with
inducing purchases. “We have added vitamins and minerals in metallic
innovation to the packaging of our packs. And our Wai-Wai cups are the
brands by using multi-layered metal- only microwave-safe product in the
lic laminate packaging with more ap- segment currently.”
pealing food graphics,” he says. Varghese agrees that packaging is
Endorsing the importance of a key differentiator. “One typically
packaging, Prasad says, “Attractive finds brands using bright colours
and safe packaging is very important and exciting food shots to differenti-
for any food brand. Considering the ate. Above everything else, however,
volume base and price sensitivity in what has boosted growth in the cat-
this category, the options as of now egory is the sheer simplicity of its of-
are limited in terms of packaging in- fer. The ‘two-minute noodles’ plank,
novations but existing packaging is first communicated by Maggi, is
• PROGRESSIVE GROCER • 49
now an adjective for all instant noo-
dles. From students to budget travel-
ers and time-pressed executives, the
instant noodle is the simplest – and
possibly the cheapest – meal option
to carry and consume.
Let us analyse just what the ap-
peal of instant noodles is for a single
individual living away from home.
At lunch or dinner he or she could
most likely consume a single serve
pack priced between Rs 10 to Rs 15
for any regular to premium variant.
Even if instant noodles are consumed
twice a week, the total monthly ex-
penditure would range between Rs
80 to Rs 120 for one meal a day. If
he or she purchases a value pack for
eight servings, it would cost around
Rs 78 for Maggi’s standard variants.
As a snack option, this person
could even opt for a smaller pack size
priced between Rs 4 to Rs 7, which is
cheaper than any other option., such
as cook-up soups that would cost
somewhere between Rs 29 to Rs 30
for a pack that serves four. Spread-
ing its consumption across four days
would result in an expenditure of be-
tween Rs 7.25 to Rs 7.5 per bowl of
soup. Though a miniscule difference,
it is still pricier than a small pack of
instant noodles priced at Rs 4.
However, in the case of cup
noodles, which are available in serv-
ing sizes of 50g to 80g for Rs 11 to
Rs 25, it is their on-the-go feature
that has been driving consumption
among students in hostels, rushed
executives, outdoor-activity enthusi-
asts, besides children.
Even though it’s a convenience-
driven product, cup noodles’ pricing
as compared to many other options
CG Foods is the only company to offer microwavable cup noodles.
50 • PROGRESSIVE GROCER • May 2009 AHEAD OF WHAT’S NEXT WWW.PROGRESSIVEGROCER.COM
is relatively reasonable, along with
its hygienic and travel-friendly
packaging.
Instant marketing
Innovation, affordability, conve-
nience and taste differentials offered
by any product category have little
relevance until consumers are aware
of their existence. Instant noodles
as a category have been established
for more than two decades now
and media promotions have played
an immensely important role in its
establishment.
“It’s to the credit of Nestle In-
dia’s intensive media advertising and
promotional activities for its brand
Maggi that today instant noodles are
treated as an option second to staples
and consumed as meals and snacks.
They have done an incredible job in
making noodles a popular food op-
tion in the country,” Gupta says.
When Nestle India launched
Maggi in India, it used the tagline,
‘Fast to cook and good to eat’, to not
only promote the product, but also
to educate the ever-growing aspirant
consumer about the advantages of
using it. Among its most iconic mes-
sages was of course, the ‘2-minute
noodles’ legend to highlight the in-
stant nature of the product. At that
point of time the target audience
for Maggi was children. The brands
commercials always highlighted
Maggi noodles as an instant snack
option for children, and one that was
easy for mothers to prepare.
The segment evolved, in sync
with changing consumer preferenc-
es, the company altered its product’s
“Nestle India’s media
advertising and
promotion activities
positioned instant
noodles as an option
second to staples.”
– Ajaay Gupta, MD, Capital Foods
recipe and enriched it with essen-
tial nutrients and even introduced
healthy wheat and rice variants,
thereby shifting its brand positioning
to ‘Taste bhi health bhi’, highlighting
the health and wellness quotient and
signifying Maggi’s maturity. Healthy
Maggi was positioned as a healthy
meal or snack option for the entire
family with variants to suit every-
one’s taste palates.
For Maggi Cuppa Mania, which
has been positioned as an ideal offer-
ing for new generation youth pressed
hard for time trying to juggle mul-
tiple roles all at once, the tag line is
‘Just add garam paani … Carry on
jaani.’ This tag line highlights the
convenience of just adding hot wa-
ter to the cup to prepare a fulfilling
snack.
As Maggi celebrates 25 years of
its runaway success, the company
has rolled out a new marketing drive
called ‘Me and meri Maggi’. The gist
of the campaign is to celebrate the
consumers’ bond with brand Maggi;
taking on a reminiscent character,
the campaign is specifically designed
to showcase the special and non-rou-
tine moments and circumstances in
life consumers associate with Maggi.
The company has designed a 360-
degree brand promotion across tele-
vision, print and internet, apart from
various on-ground activities.
Similarly, other players have also
banked on multiple marketing exer-
cises, including both ATL (Above-
the-Line) and BTL (Below-the-Line)
vehicles. Supporting the vital role of
media promotion, Gupta says, “Me-
dia has so far, and will, continue to
play a big role in the category growth,
as it helps the brands tap a large con-
sumer base by communicating about
their offerings and USPs.”
“We have undertaken extensive
media advertising, in-store promo-
tions and lot of sampling of our
products. Also, as schools reopen
after the summer break, we will be
doing a host of cross promotions
for the Smith & Jones range among
school students. For the Ching’s Se-
cret brand, we are rolling out cross
promotions at colleges, nightclubs,
wherever there is the target audience
for the brand.”
Speaking about Indo Nissin’s
brand USP, Prasad says, “Our USP
is good quality product at a lower
price. Competition has always been
very stiff and our communication
has always addressed our USP at
point-blank range. We started com-
municating our instant noodle in-
vention story on all our packs, and
this has definitely given us an edge
over competitors.”
Elaborating on Wai-Wai’s pro-
motional strategy, Sharma says, “Ba-
sically, up until now we have largely
communicated our brand’s USPs
through BTL activities and PoP
material such as posters, danglers,
handbills, DPS boards, steamers etc,
along with direct consumers’ contact
programmes, which includes events
sponsored at public places, activities
organised at school level and in-store
promotions in modern trade.”
Modern trade – partners
or rivals?
Euromonitor’s findings suggest
that a majority of noodles sales take
place through small independent
grocery stores, which dominate the
retailing landscape in the country. In
2008 around 86 percent of noodles
sales were accounted for by tradi-
tional grocers. Modern supermar-
kets/ hypermarkets are still emerging
channels and contributed only 14
percent of sales in the category.
Also, modern retailers themselves
offer private labels instant noodles.
Confirming private label growth in
the category, Varghese says, “Our
Feasters instant noodles has wit-
nessed a very high level of consumer
acceptance and has grown steadily in
revenue share contribution. Feasters
is the second largest brand within the
category at More grocery stores.”
For Spencer’s, instant noodles is
the most profitable food category of-
fered under its private label – Smart
Choice. The sales of instant noodles
private label at Spencer’s contribute
around 8.80 percent to the overall
sales revenue pie.
So, is there a conflict of interest
here, given the pricing dynamics that
are skewed in favour of lower-range
private labels? While the advent of
modern supermarkets did help in
leveraging overall growth for the seg-
ment, do their competitively priced
private labels now offer serious com-
petition to suppliers’ brands?
Supporting the evolution of mod-
ern retail formats, Gupta says, “Mod-
ern retail stores provide manufactur-
ers with a platform to propagate their
innovation. They have also helped in
boosting consumption due to shelf
Maggi is celebrating 25 years with nostalgia-themed marketing.
WWW.PROGRESSIVEGROCER.COM AHEAD OF WHAT’S NEXT May 2009
visibility, as consumers get to see and
compare competing products, along
with their price points and pick the
one that suits them best.”
“In a country of a billion people
we can’t expect one or two brands
to cater to everyone’s demands.
Yes, there are a few manufacturers’
brands and some private labels in the
category, but they are not eating into
each other’s market share. In fact,
private label along with supplier’s
brands are together helping the cat-
egory to expand and grow. My be-
lief is that competition always forces
brands to innovate and distinguish
themselves, thereby enhancing cat-
egory growth.”
On this point, Prasad notes,
“Modern trade channels are especial-
ly a boon for emerging categories due
to the larger shelf display and visibil-
ity offered by them in comparison
with traditional grocers. Yes, private
labels are also growing but are offered
by only a few retailers as of now.”
“And even though some retailers
can claim some private label share in
the category, it will take more time
for in-store brands to establish them-
selves as serious competition. Until
now, there has been no significant
sales loss for national brands in any
of the retail chains who also offer pri-
vate labels of instant noodles.”
Sharma feels that while private
labels do offer a certain degree of
competition, in the long run in-store
brands will only help in enlarging
the consumer base in the category.
On the horizon
By 2013, the instant noodles
market size is expected to be around
Rs 30260.3 million but the year-on-
year growth rate will be less than 20
percent, while maintaining a double
digit growth, predicts Euromonitor
In 2008, 86 percent
of noodles sales
were accounted
for by traditional
grocers. Modern
channels contributed
only 14 percent.
International’s report.
The report further points out
that instant noodles are likely to wit-
ness price increases with the launch
of newer variants, which will be
healthier and will offer a wider range
of flavours.
Sharing his views about the fu-
ture prospects of the category, Shar-
ma opines, “As Indian consumers
become increasingly busy, and adapt
to hectic lifestyle schedules, fast food
consumption will definitely rise,
which may compel more companies
to enter the segment and increase
category penetration.”
Agreeing with Sharma, Prasad
feels, “In future more players are ex-
pected to foray in the segment as it is
a high-volume business, and one that
is growing at a good pace. Growth in
the category has two angles – firstly,
by growing the category by making
the most-popular Masala flavour a
Capital Foods’ Smith & Jones range is targeted at schoolchildren.
spearhead for driving frequency of
consumption, as most Indians fa-
vour this standard flavour.”
“The other option is to propel
growth in the category by creating
other variants and adding more in-
novation, which can broaden pen-
etration. If the second option is ful-
filled by the new entrants, it will help
existing players as well.”
“We believe with more and posi-
tive competition expected over the
next three to four years, we will wit-
ness 100 percent growth in the cate-
gory; consumers can expect a shower
of innovations. We can expect to see
more players entering the segment as
well,” Gupta nods.
“In fact, by July, the market
would witness another set of innova-
tion from Capital Foods in the cat-
egory, though I would like to keep
things under wraps for now,” he con-
cludes. n
• PROGRESSIVE GROCER • 51