BENGALURU: Noodles is back on the menu in a big way. The country’s noodles market has breached its pre-Maggi crisis level after a two-year hiatus, helped by a slew of new launches and increased advertising push that mainly reiterated product safety.
The segment clocked Rs 990 crore in sales for the quarter ended June, a sharp recovery from the Rs 190 crore recorded in the corresponding quarter of 2015, industry executives said, citing data from market research firm Nielsen.
Nestle‘s noodle brand Maggi was declared unsafe and hazardous by the food regulator in June 2015 after samples were found to contain excessive lead. The action reduced the category’s sales to a fifth as several other brands were also taken off the shelves in its aftermath. Before the Maggi fiasco, the category had quarterly sales of Rs 900 crore.
“Since the comeback of Maggi Noodles, the category which had seen a significant reduction has revived once again and is at very encouraging levels of recovery, said Nestle India’s spokesperson. The Indian unit of the Swiss food giant recently launched four flavours – Amritsari Achari, Mumbaiya Chatak, Super Chennai and Bengali Jhaal.
Online retailing, newer players including Patanjali, and retailers’ own labels added to the growth, according to a report by Euromonitor, which said sales of rice, pasta and noodles grew 36 per cent in 2016.
“The market took two years, but has successfully touched its pre-crisis level at around Rs 4,000 crore,” said Gautam Sharma, managing director at Indo Nissin Foods, which holds 10 per cent market share through its brands Top Ramen and Cup Noodles.
After the clampdown on Maggi, the Food Safety and Standards Authority of India (FSSAI) rejected product approval requests by companies, including Tata Starbucks, Ferrero SpA, Field Fresh Foods, Kellogg’s and McCain, on the ground that they were either unsafe or mislabeled.
The situation forced most companies to focus on regaining consumer confidence by launching what they claimed are healthier variants—vegetable, atta and oats. ITC launched television advertisements last April highlighting that its instant noodles are safe for consumption. The company’s market share has grown to 22.5 per cent from 15 per cent two years ago.”We are witnessing a revival in demand and encouraging consumer traction by expanding distribution to semi-urban and rural markets and enhancing consumption in urban households through large packs,” said Hemant Malik, divisional chief executive of ITC Foods. “In certain markets, like south and Odisha, YiPPee! enjoys a higher market share (37-38 per cent),” he said.
But consumers have also moved to adjacent food categories, something that could dampen the fast pace of growth in this segment.