Despite of Maggi controversy, the instant noodles market in India is set to grow double by 2021:


25/05/2018

Players targeting semi-urban and rural areas, increasing penetration, new entrants intensifying competition, growing time-poverty and rising younger population will drive the category growth.
Due to India’s proximity to China and Nepal, noodles have been a part of the urban Indian diet for some time now. In its journey of three decades, the instant noodles market has undergone several changes, viz. the entry of several new players, innovations in products and value-addition in packaging, the emergence of modern formats, a shift in consumption towards convenience foods, etc. In 1982, when Maggi instant noodles arrived for the first time in India, they instantly caught the nation's imagination. The idea that anything could be cooked in just two minutes had an immediate impact on people that had invented slow food centuries before it became fashionable in fast food cultures.

According to recently published report of Stats and Reports “India Instant Noodles, Pasta & Soup Market Outlook, 2021”, instant noodles market is anticipated to get double by 2021 registering a CAGR of more than 17% over next six years. Nestle’s Maggi is a leader in the category with highest market share whereas other major players include CG Food’s Wai Wai, ITC's Sunfeast Yippee, Bambino Agro, Indo Nissin’s Top Ramen, Capital Food’s Chings Secret and Hindustan Unilever's Knorr Soupy Noodles. Baba Ramdev's Patanjali Ayurved recently launched an atta noodle to take advantage of the gap left by Nestle's Maggi noodles.

In June 2015, the country's food safety regulator FSSAI banned Maggi after excessive amounts of lead and monosodium glutamate (MSG) were reported in samples tested in Uttar Pradesh. Prior to the Maggi ban, the instant noodle market in India was growing at a very healthy rate. After the ban, sales were straight away wiped out from the market as Maggi noodles contributed 25-30 percent to Nestle India's revenue. Banning it meant the category shrunk by that amount, since there were no sales of Maggi. Other brands selling instant noodles were also hit by this ban as consumers stopped purchasing noodles for some time. But Nestle India is back with its brand and even other players like Indo Nissin who exited the category are back with their brands and products. Winning back consumer’s trust in instant noodles won’t be easy for any player.
It will take time for consumers to gain confidence in the category but the crisis will not affect negatively in the long run as consumers are sensible people. They choose the categories that benefit them and they choose brands which add value to their lives. On the other hand, consumers have become smarter over the years and will continue to buy brand they have faith in. As long as the category they participate in, adds value to their lives and as long as the brand is able to build on brand trust, with pure intentions, the brand in the categories will grow.

An increasingly younger population, the growth in the middle class, with more nuclear families, and the growing time-poverty as a result of the rise in the number of working couples will give a boost to the convenience food segment. Today, instant noodles are being consumed not only by kids as an evening snack but by consumers across all age groups, as an eating option. While it continues to be a home snack, it is also increasingly being consumed at colleges, workplace, etc. Players are now eyeing the semi-urban and rural markets which will increase the penetration of the category in India. Going forward, this market will continue to register a double digit growth and will witness higher competitive intensity.