14 November, 2010

Much ado about noodles!

After much resistance, I finally tried the latest entrant in the market – Yipee from ITC. For the uninitiated, it is the brand name of Noodles launched by ITC Foods recently. While the launch saw a full page ad on Times of India a few days ago, the product was virtually unavailable at smaller shops. Reason: the brand had tied up with Food Bazaar for the launch, India’s largest Supermarket chain from The Future Group including the Retailer’s name in the full page Ad. JND – Just Noticeable Difference, taught my professor of Marketing at B-School was something that the brand had to do or rather outdo itself from competition. And that’s what Yippee has done too. To begin with, the name resonated with a start-up internet lookalike of Yahoo! Well, actually it isn’t obviously. Then, the noodle was a single twin cake, unlike others who have two cakes. And the most important difference was that it was not a cube! It was a small circular piece and looked different. The reasoning, according to many “experts” who follow this segment was that the Indian households cook noodles on flame and the “kadais” or the vessels that are used are also in the same shape. Well, the microwaveable vessels that are rampant at Supermarkets and Hypermarkets are no different – similar shape (if it was thought that consumers in the West used microwave to cook Noodles!). Well, Change is the only constant and so is the shape of the noodle.

But what makes Yipee different from say, Maggi from Nestle or Foodles from Horlicks? Nothing. All are noodles that are ready to cook and the category is getting increasing importance from marketers, brands and even Retailers so much so that this category is a favourite for many supermarkets to have their own private labels. The reason for this sudden popularity: in my opinion – speed of delivery. The 2 minute promise offered by Maggi two decades back won the hearts of many home makers and mothers and the taste of the wonderful product saw almost a generation growing up with the snack. I heard someone recently confess that during their hostel days, she and her friends would save some hot water (provided only during the weekends) meant for bath being used to cook Maggi in a vessel. Someone somewhere meanwhile founded “Cup Noodles” which needed just hot water to be poured in it to munch the snack readily. I know of someone else who has been having Maggi for lunch 2-3 times a week for many years now! Such is the popularity of snack that Maggi asked its “fans” to send their “Maggi stories” to the company and win prizes!

The only distinctive factors or rather THE factor among these many brands is “taste”. Now, this is a very subject topic, so to say. Taste, as they say is acquired by the individual over a period of time whether it is that of Coffee or Tea, Noodles or Dosa, Wine or Single Malts, Cigarettes or Cigars. So, when it is so distinctive, how come Maggi is almost interchangeably used for “noodles”? To a large extent, it is the first mover advantage that the brand enjoyed. Until recently, there weren’t too many similar brands in the space. There were ready to cook raw noodles from local players and then came Top Ramen from Nissin, Wai Wai and many others who wound up – atleast from competing on the shelves with Maggi. Nestle’s distribution strength ensured that Maggi was available right across the length and breadth of the country. In a way, Nestle changed the way we consume noodles. Maggi was the perfect “in-between” meal alternative for breakfast, lunch, evening snack, supper, late night, etc. (It is quite similar to the way Kellogg’s encouraged consumers to much Corn Flakes – but more about that later in yet another column).

There is fierce competition to conquer the mind space of consumers for top of mind recall of noodles by the brands. The good part is that the market is so large that the share for these brands would only grow in times to come. Look at the automobile market – ten years ago there were six brands in all and about 15 variants. Today, there are more than 20 car makers and over 70 variants and the market is only growing.  Maruti which had a market share of over 70% is still the market leader even today with every second car being sold in the country coming from its fold. But Hyundai, with its Santro made owning a car simpler, easier and affordable. I can imagine a similar state of affairs in this category too. Maggi was, is and will remain the undisputed leader, except that its share will reduce. Newer brands will bring more innovation (Read: Flavors) and the market would accept these changes faster. Who had imagined that a small pack of noodles, from the heartland of Chinese culture, popularised by the ever increasing faster lifestyle of the West would be stocked in almost every urban household today! 

The Head of Operations of a leading Supermarket chain (who requested anonymity since he is not the official spokesperson of the company) confirms that there is more than 50% penetration of noodles across the number of bills during the first week of the month when the pantry shopping happens. He also exclaims that the average pack size is 3 per bill which means the product would be for multiple uses or there are multiple users at home. Such facts only confirm the strength of the category! Whichever way, noodles are here to stay in times to come and the biggest beneficiary of the fierce competition is none other than “you” – the consumer. So enjoy the variety, happy snacking... 

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