Noodles industry in india with market share essay

‘Growing Up’

The minute noodles market in India is finally coming of age after over 25 years The minute noodles category in India was, in this way, created by Nestlé with all the introduction of their Maggi brand in mid-1980s. The concept of ‘2-minute noodles’, located as a quick snack means to fix children, discovered acceptance with the children and the mothers as well. Having created and nurtured the category’s evolution, the manufacturer name “Maggi” almost started to be a suggestions for the moment noodles category itself.

Through the 1990s and 2000s, Maggi faced small competition. Regardless of the entry of players just like Top Ramen (Indo Nissin Foods) in 1991, Ching’s Secret (Capital Foods) in 1996, and Wai Wai (CG Foods) in 2005, Maggi continued to maintain its dominating position.

However , in the past few years, we now have seen buyer goods leaders ITC (Sunfeast Yippee! ), Glaxo-Smithkline (Horlicks Foodles), and Hindustan Unilever Limited (Knorr Soupy Noodles) foray in to this profitable market with differentiated merchandise offerings. These types of brands have brought a competitive intensity to the space.

The forex market now as well comprises exclusive labels just like Feasters (AV Birla Retail), Tasty Deal with (Future Group), and Clever Choice (Spencers).

Even though ‘Maggi’ continues to control the market having a share in excess of 75%, the entry of multiple brands and the increasing aggression of existing brands has taken away several percentage points from Maggi’s business.

The category’s strong growth, and ever before widening consumer acceptance, causes it to be a rewarding option for several players. The minute noodles companies are estimated for ~INR 2200 crore (USD 402. six million) and it is projected to grow by a healthy gross annual rate of ~15% above the next few years.

There are several reasons behind the growth this category offers realized, in India, many of which are described below.

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Changing consumer life-style – Over the years, the change in consumers’ personal preferences and ways of eating, and their wider global direct exposure, along with an increasingly youthful population, the growth in the middle class, with more indivisible families, and the growing time-poverty (as the result of the within the number of functioning couples) offers given power up the convenience meals segment.

Because of this, the instant noodles market features charted a higher growth trajectory thanks to their availability, affordability, anytime-anywhere consumption and comfort, being a speedy meal demanding minimal cooking. Instant noodles have also emerged from being a snack food or perhaps an occasional, various eating option to a popular food item of choice featuring frequently in customers’ grocery containers.

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Developing customer base – The breakthrough of instant noodles has added a new sizing to consumers’ meals; noodles are getting consumed not simply by youngsters (who will be the core focus on audience) since an evening snack food or a ‘tiffin’ meal but by customers across all age groups, as an eating option beyond the ‘mundane’ kinds. While it continues to be a home snack, it is additionally increasingly getting consumed by workplace, colleges, etc . Geographically too, the appetite to get instant noodles is growing with players right now eyeing the semi-urban and rural market segments. The category’s penetration is usually low in India (~20-25%), as a result presenting a lucrative chance for growth.

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More options and variants: Players present in the space are finding and adding value to ascertain a unique brand proposition inside the consumers’ head. Some of the major developments with this direction contain: o

Intro of new tastes: To amazon kindle the consumer’s interest in the class and also appeal to the different and changing tastes of the consumer, immediate noodles brands constantly grow their product offerings by adding new flavors. Beyond the classic Masala and Chicken breast flavors, a wide range of flavors which include Indo-Chinese, Chinese language, tomato, etc . have been

launched.

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Growing give attention to health: In spite of their weakness for instant noodles, buyers in India hold the idea that noodles are unhealthy, being made by ‘maida’ which is seen as not being as healthy as ‘atta’. To address this concern, brands are proactively introducing ‘healthy’ offerings as part of their merchandise portfolio. Maggi and Best Ramen get their ‘atta’ noodles, while Horlicks Foodles was launched entirely on the health program, with the noodles made from wheat or multiple grains and including a vitamin-supplying “Health Maker”. Additionally , HUL has also situated its Knorr Soupy Noodles as a healthy, fun-filled munch.

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Even more packaging versions: Brands include introduced packs in different sizes, right from solitary noodle packages of 50-75 gm. to value ten noodle packages. Further, to enhance the category’s penetration, brands like Maggi and Wai Wai have got extended item offerings within an even smaller pack size, priced at INR 5.

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Category expansion from sack to cup noodles: An important development on the market was the extension from pouch noodles to cup noodles that are ready-to-eat, on adding hot water, as opposed to pouch noodles that require to be cooked. The driving aspect here is that convenience (the need for a great on-the-go meal) is increasing in prominence in customers’ lives because of the within a youthful working populace and a migrant human population, the raising population of double income households with additional working girls, etc . Best Ramen offers different flavors in glass noodles, mini cup noodles, and cup noodles. Maggi and Wai Wai have got extended to cup noodles as well.

Modern formats, which provide high product presence and good product shows, are acting as a good marketing platform for brands to advertise their item offerings through consumer schemes like value discounts, included offers, sample for new launches, etc . However , about 80-90% of fast noodles product sales takes place through traditional forms (mom and pop stores), which is not astonishing since noodles are a frequent grocery item.

Thus players need to make investments significantly in distribution and establish a widespread retail reach and utilize a larger buyer base. Therefore , distribution remains to be an important enabler for this category. Another important challenge for players is always to maintain cost points and margins presented the variances in type costs. Usually, they prefer to reduce pack sizes, while keeping prices constant, to counter the challenge.

In its voyage of 28 years, the moment noodles marketplace has gone through several adjustments, viz. the entry of several fresh players, innovative developments in products and value-addition in packaging, the emergence of modern formats, a shift in consumption toward convenience food, etc . In the years ahead, this market will continue to signup a doubledigit growth and will witness higher competitive depth.

The strength of the distribution sites and mass media campaigns in the new entrants has the probability of be a game-changer and may eventually cause Maggi to face a lot of serious competition, and perhaps even make this landmark brand battle to defend their dominance. This category is finally coming of age and promises to be a fascinating space to watch in the next few years.

Authored Simply by:

Pragya Singh – Associate Movie director, Retail

Ashima Anand- Senior Consultant, Retail

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