Rival brands up the ante as Maggi relaunch nears

Rival brands are bracing up for the re-entry of Maggi after Nestlé announced it had resumed production of the instant noodles in three states.

ITC, maker of the Yippee! brand of noodles, is gearing up to introduce new variants soon apart from focusing on customer-engagement programmes. "Our products are innovative and differentiated. The Yippee Magic Masala variant has driven growth, but we will launch more variants that are under development,” said V L Rajesh, divisional chief executive, foods division, ITC.

According to him, the company will kick off the second phase of a "reassurance” campaign launched a month ago. "The instant noodles category witnessed a significant decline in sales after the (Maggi) controversy. It was imperative to reinstate consumer trust in this category through a campaign, which we did,” Rajesh added.

While ITC has adopted a multi-pronged strategy to increase its sales, Lalitpur (Nepal)-based Chaudhary Group (CG), which manufactures Wai-Wai noodles is focusing on its existing products. CG which had gained from the absence of Maggi, is planning a distribution and marketing push. Nirvana Chaudhary, managing director of the Chaudhary Group, said the company would soon launch a national advertising campaign and undertake on the ground initiatives in malls and housing societies.

"Developments in the past few months made us realise the trust consumers have on Wai-Wai. This prompted us to come up with a new marketing strategy to increase our visibility,” Chaudhury said.

Sector sources said this was the first time that Wai-Wai was undertaking such a massive exercise.  

Experts said the fight for market share between Wai-Wai and Yippee! was inevitable because both wanted to capitalise on Maggi's absence.

The two companies also did not have competition from Indo-Nissin Foods' Top Ramen noodles for three months following its recall from the market in June. Top Ramen has now been relaunched.

The Rs 3,500-crore instant noodle industry in India shrank after the recall of Maggi to Rs 1,000 crore. Maggi noodles, which contributed 25-26 per cent to Nestlé's  Rs 9,800 crore revenue, was a Rs 2,500-crore brand, analysts said.

The challenge for existing players is not only to protect their market share but also grow quickly before Maggi stages a comeback.

"Nestlé was quick to tap into the latent demand for Maggi right after the August 13 verdict of the Bombay High Court. Excitement is predictably high, which will result in good sales for the brand after its relaunch,” said the chief executive of a consumer goods firm. "The pressure on existing players only grows,” he added.