Increased competition: Instant noodle market

It may not reach the level of Pepsi vs Coke "Cola Wars" of the 1980s, but the sign of major skirmish in the making are clearly visible in India's food sector. The instant noodle market in India, which has long been dominated by Swiss giant Nastle with its brand Maggi, has been seeing a flurry of activity with new entrants stocking the shelves in recent months. Be it GSK's Horlicks Foodles, HUL's Knorr soupy noodles or ITC's Sunfeast Yippee, each is out to grab a share of the consumer's palate and wallet.

History of noodles:
instant noodles were first marketed by Momofuku Ando, founder of Nissin Food in Japan on August 1958, under the brand name "Chikin Ramen" and priced around 6 time that of traditional Japanese noodles and were considered as luxury item. In 1971, Nissin introduced the cup noodles in polystyrene cup, to which boiling water could be added to cook the noodles. A further innovation added dried vegetables to the cup, creating a complete instant soup dish.

Facts about noodles:
According to a Japanese poll in the year 2000, instant noodles were the most important Japanese invention of the century. As of 2008, approximately 94 billion servings of instant noodles are eaten worldwide every year. China consumes 45 billion packages of instant noodles per year – 48% of world consumption – Indonesia, 14 billion; Japan, 5.1 billion. Per capita, South Koreans consume the greatest amount of instant noodles, 69 per capita per year.

Instant noodles are not only popular with college students, they can also be an economic indicator. In 2005, the "Mama Noodles Index" was launched to reflect the sales of Mama Noodles, the biggest instant noodle manufacturer in Thailand.The index was steady following recovery from the 1997 Asian Financial Crisis, but sales increased about 15% on a year-to-year basis in the first seven months of 2005, which was regarded as a sign of an inferior good, one whose consumption increases as incomes fall. The theory was that the increase in sales of instant noodles, which are usually cheap, occurred because people could not afford more expensive foods.

Introduction to India:

Swiss giant Nastle introduced the noodles under the brand name "Maggi" in 1984. That time Indian eating habits were totally different and there was no sign for noodles to succeed in India and so most of big giants like HUL and ITC decided not to enter in noodle market.

Maggi came up with a tantalizing promise- ready to eat in just two minutes. The combination of convinient and taste proove to be potent. Over the years, other brands like Top Rammen from Indo Nissin, Ching's Secret from Capital Food and Wai Wai from CG Food also wooed the space, but all of them played a distant fiddle to Maggi and could not make a dent in it's 90% plus market share.

Current scenario:

The data shows that Maggi's share of instant noodles, on an all-India basis, across urban markets, has slipped consistently between December '09 to July '10. While Maggi instant noodles had a 90.7% share in December '09, the share dropped to 86.5% in July '10 on an all-India basis.A regional split of the data shows that Maggi's instant noodles' value market share has fallen across the east, south, north and west zones for the same period.
Apart from HUL and GSK which have positioned their noodles as 'healthy' snacking options targeting kids and mothers, others like Indo-Nissin's Top Ramen, Capital Foods' Ching's Secret and CG Foods's Wai-Wai , though around for long, are stepping up marketing efforts to take advantage of category growth. Besides, private brands like Big Bazaar's Tasty Treat and Aditya Birla Retail's Feasters are notching up share.

What made this possible?I think it is the combination of factors that led Maggi to loose its share. The indian consumer are lot more open to the instant food categories and demanding more choices now than he or she ever was before. And the current players have both, the brand name and the muscle power. All of them are known for their strong marketing power.

I personally believe that in long run ITC will be giving the toughest competition to Maggi because they are known for its "in the eye" kind of advertising campaigns and its strong distribution network(Bingo success storey is the evidence). ITC has planned to have 10% of instant noodle market share in 1 year which will help them to compete directly with Nastle's Maggi.And Sunfeast brand equity will help them out to grab market share quickely.

while HUL is playing on its Knorr brand which also has great brand equity and so it is also going to help in gaining market share fast. While advertisement being aired are quite heart locking, soupy noodles, "Kha ke piyo ya pi ke khao".

While GSK is battaling on its USP that Foodles is available only in multi grain and wheat varient and hense being promoted as having higher nutrition value compared to other popular brands. The main USP of Foodles is the vitamin packed health maker sachet that comes with the pack. And a beautiful advertisement with punch line, "Noodles without No" getting good response from market.
Looking the market trends and growth of noodles market in India, Big retailers Like Big Bazaar and Aditya Birla Retail also jumped to the battle ground with the private brands Tasty Treat and Feaster and in current scenario private lebels are hurting big brands more than anyone else.
Nastle ofc ourse in not keeping quietand has been widening the product range with new flavours and new varients. While its hot selling varients continues to be of refine wheat flour, Maggi too has jumped onto the health platform with whole wheat and multigrain offering. Nastle also realize that noodles are no more children product and hense redefine the target customer. Product is now being positioned as snacks for all age group.

Of course Nastle has taken all the necessary actions to retain its supremacy in Indian noodle market, but I don't understand that why big marketer like Natle gone through Marketing maopia that they didn't reposition maggi for long time and it has target same children for long time? Nastle should have smelled these Muscled giants (HUL, GSK, ITC etc)move and should have been proactive. They should have read the changing habits and changed demands of indian consumer.But of course in the fight of these muscles, consumer will get more variety and quality and may be in less penny.