Not a Two-Minute War - Business Standard

Not a two-minute war - Business Standard

January 17, 2011

The Rs 1,300-crore instant noodles market in India is in a state of war, with three new players having thrown their hats in the ring over the last one year. Who will win the battle for the consumer's heart?

The year 2010 marked the end of the instant noodle market as we know it. For two decades, consumers had a single brand of noodles to dig into - Maggi - giving Nestle over 85 per cent share of the market. Players such as Indo-Nissin's Top Ramen, Capital Foods' Ching's Secret and Smith & Jones and CG Foods' Wai-Wai tried to make a dent but failed to take up more than 10-15 per cent of the Rs 1,300-crore market.

Now food companies seem to have woken up to the potential of the category growing at a consistent 20 per cent for the last few years. Three new entrants have thrown their hats into the ring over the last one year: Hindustan Unilever (HUL), GlaxoSmithKline (GSK) and ITC with Knorr Soupy Noodles, Horlicks Foodles and Sunfeast Yippee! respectively.

So is the appetite for instant noodles growing in India? How will the latest entrant Sunfeast Yippee! make its presence felt? First let's look at how each of these brands stacks up.

ITC's over Rs 2,500-crore food business (with blockbusters such as Bingo for finger snacks, Aashirvaad for staples and Sunfeast for packaged foods) has a supply chain beginning right at the farm, giving it cost and quality advantages. This, among other things, helped catapult it to the league of top companies in packaged foods - such as HUL and Nestle - in the country in less than a decade. It is not new to marketing offensive either, having shaken PepsiCo Frito-Lay's stranglehold on the packaged snack market with Bingo. In biscuits, ITC has claimed the third spot, with Sunfeast competing against the bestseller brands of Britannia and Parle that have been around for 30 to 40 years in the market.

ITC's over Rs 2,500-crore food business (with blockbusters such as Bingo for finger snacks, Aashirvaad for staples and Sunfeast for packaged foods) has a supply chain beginning right at the farm, giving it cost and quality advantages. This, among other things, helped catapult it to the league of top companies in packaged foods - such as HUL and Nestle - in the country in less than a decade. It is not new to marketing offensive either, having shaken PepsiCo Frito-Lay's stranglehold on the packaged snack market with Bingo. In biscuits, ITC has claimed the third spot, with Sunfeast competing against the bestseller brands of Britannia and Parle that have been around for 30 to 40 years in the market.

HUL has extended its Knorr franchise to combine noodles with soup that is often seen as healthy. GSK is betting on its legacy of health to launch the multigrain Horlicks Foodles, pegged as a healthier alternative to maida noodles (the most popular Maggi variant). Nestle has reacted without delay with the launch of Maggi multigrain noodles. It also tied consumer anecdotes with a bevy of new flavours such as Curry and Capsicum.

Will the consumer bite?

Consumers