Rivals gear up for competition to come from Maggi relaunch

Rivals gear up for competition to come from Maggi relaunchYippee noodlesYippee noodles/ Facebook

Rival brands, which have benefitted from a ban on Maggi noodles, are gearing up with new initiatives to face the competition arising out of its re-launch.

Nestle India, the maker of Maggi noodles, announced that it has restarted the production of instant noodles in three states, while it is widely that the noodles will be back on shelves in the first week of November.

Last week, state governments in Karnataka and Gujarat had lifted the ban on sale of Maggi noodles, after Nestle India announced that the Bombay High Court-mandated labs haven’t found harmful levels of lead and presence of monosodium glutamate (MSG) in the sample tests.

The resumption of Maggi sales is expected to infuse stiff competition to other players in the instant food market, as Nestle India had occupied a significant share before a ban on Maggi in early June.

Maggi had a market share of over 80% in the instant noodles segment in the quarter ending March 2015, according to a Nomura report.

Following a ban on Maggi noodles by the country’s food regulator, Yippee noodles has seen a noticeable increase in its sales and significantly increased its market share by focusing on campaigns that centered quality and safety.

Yippee noodles, which had only just 10-12% of the market share before the country-wide ban on Maggi sales, gained popularity in recent months. Analysts’ estimates show that Yippee noodles maker ITC’s share now accounts for over 50% of instant noodles market in India.

To take on the competition from Maggi re-launch, ITC is now planning to roll out new variants of Yippee noodles soon besides “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,” V L Rajesh, divisional chief executive, foods division, ITC, told Business Standard.

ITC will also launch the second phase of a “reassurance” campaign, which was introduced a month ago, he said.

“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.

On the other hand, Lalitpur (Nepal)-based Chaudhary Group (CG), the manufacturer of Wai-Wai noodles, wants to focus on its current products by improving distribution and marketing channels.

CG, which has also benefitted from a ban on Maggi, is looking to kick off a nationwide advertising campaign and carry out promotional initiatives in malls and housing societies, according to Nirvana Chaudhary, managing director of CG.

“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.

Experts said that rivalry for market share between Wai-Wai and Yippee was “inevitable” as both the companies aimed to benefit from Maggi’s absence in the market.

Besides, the two companies did not much competition from Indo-Nissin Foods’ Top Ramen noodles in the months following the Maggi recall.

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