Noodle makers claw back with new launches
By Dinesh Jain | September 23, 2015
The move comes even as Nestle India gears up to present findings of its Maggi re-test to the Bombay High Court
After withdrawing Top Ramen, India's third-largest instant noodle brand, in June this year, its maker Indo-Nissin Foods has relaunched the product. This was conveyed by the company in full-page advertisements in Mumbai and Delhi on Tuesday, using the occasion to not only launch new variants such as atta and oats noodles, but also drive home the message of safety. At the same time, Indo-Nissin invited interested distributors to contact the company at the earliest.The move by Indo-Nissin comes as rival Nestlé India gears up to present the findings of the re-test conducted onMaggi noodle samples to the Bombay High Court. The latter had given Nestlé six weeks to conduct the re-tests in its order dated August 13. The court is expected to give its verdict on the re-tests next month. Nestlé is internally working on a possible end-of-the-year relaunch of Maggi, implying that rival players have a small window of two months available to them to consolidate their position. "With Maggi not there, most other players are trying to grab as much of the instant noodle pie,†said Abneesh Roy, associate director, research, institutional equities, Edelweiss.
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A month ago, the country's second-largest instant noodle brand Sunfeast Yippee! from ITC had a 360-degree campaign that attempted to reassure consumers of its safety. This came in the wake of incidents of alleged contamination of Yippee noodle samples in states such as Gujarat and Uttar Pradesh, which ITC vehemently denied. While the two state food regulators were unable to substantiate their claims, negative publicity forced the company to hit back with an all-round campaign targeting consumers as well as retailers.
"There is an atmosphere of distrust,†ITC's president (FMCG business) Sanjiv Puri had said earlier. "This trust deficit will have to be bridged,†he said. This point was also endorsed by Nestlé India's managing director Suresh Narayanan in a recent interaction, indicating the recall and ban of Maggi had not only hit the brand, but also taken a toll on the company. Nestlé India reported its first quarterly loss in 17 years for the three months ended June 2015.
Taking advantage of all this, Baba Ramdev's Patanjali Ayurved recently launched an atta noodle, playing on the health and wellness platform.
According to analysts, winning back consumers' trust in instant noodles won't be easy for any player. "It will take time for consumers to gain confidence in the category,†said an executive from a top consumer goods company.
Prior to the Maggi ban, the instant noodle market in India stood at around Rs 3,500 crore, according to industry estimates, growing at a clip of around 15 per cent a year. After the ban, Rs 2,500 crore was straight away wiped out from the market. This was because Maggi noodles, which contributed 25-26 per cent to Nestlé India's Rs 9,800-crore topline was of that size. Banning it meant the category shrunk by that amount, since there were no sales of Maggi.
"There is an atmosphere of distrust,†ITC's president (FMCG business) Sanjiv Puri had said earlier. "This trust deficit will have to be bridged,†he said. This point was also endorsed by Nestlé India's managing director Suresh Narayanan in a recent interaction, indicating the recall and ban of Maggi had not only hit the brand, but also taken a toll on the company. Nestlé India reported its first quarterly loss in 17 years for the three months ended June 2015.
Taking advantage of all this, Baba Ramdev's Patanjali Ayurved recently launched an atta noodle, playing on the health and wellness platform.
According to analysts, winning back consumers' trust in instant noodles won't be easy for any player. "It will take time for consumers to gain confidence in the category,†said an executive from a top consumer goods company.
Prior to the Maggi ban, the instant noodle market in India stood at around Rs 3,500 crore, according to industry estimates, growing at a clip of around 15 per cent a year. After the ban, Rs 2,500 crore was straight away wiped out from the market. This was because Maggi noodles, which contributed 25-26 per cent to Nestlé India's Rs 9,800-crore topline was of that size. Banning it meant the category shrunk by that amount, since there were no sales of Maggi.
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