Home / Companies / Maggi noodles now has 50% market share, says Nestle India

New Delhi: Nestle India Ltd on Tuesday said Maggi noodles has regained 50% share in India’s 2,000-crore noodles market, about six months after it relaunched the popular snack. The company has based its claim on a report by market researcher Nielsen.

The local arm of the Swiss packaged food company relaunched Maggi noodles on 9 November. Nestle India was not able to sell Maggi noodles for six months in 2015 after the Food Safety and Standards Authority of India on 5 June imposed a ban after some samples of the snack were allegedly found to contain excess lead and monosodium glutamate.

“Over the past 33 years, Maggi has become the most trusted and valuable food brand in India. I am also happy that we have gained month on month and we continue to lead the noodles category with over 50% market share," Suresh Narayanan, chairman and managing director, Nestle India, said in a statement.

Maggi masala noodles were relaunched in November 2015 and the chicken variant in February. Nestle India is now bringing back the popular variants—Maggi vegetable atta and Maggi oats noodles. Like the two previous launches, Nestle India will launch the two new variants of Maggi on Snapdeal as a preview sale starting 22 April.

“We understand the changing lifestyles of generations and have constantly innovated products that add value to the favourite Maggi Noodles. With the latest relaunch, we are aiming to provide more choices to suit consumer preferences, driving greater volumes and building back our market share. We are hopeful that these two variants will also have a rapid pick-up like the masala and chicken variants," said Narayanan.

Narayanan had spelled out his intention to reduce dependence on Maggi noodles, which accounted for about 30% of total sales in 2014, immediately after he came to India as the chairman and managing director of the company in July last year.

To be sure, Maggi’s market share was much higher before the ban. According to a report by Nomura Financial Advisory and Securities (India) Pvt. Ltd, published in May 2015, Maggi commanded 80.2% of the market for instant noodles in the quarter to March 2015. During the period when sale of Maggi noodles was banned, ITC Ltd’s Yippee noodles and Wai Wai noodles from Nepal’s CG Foods gained market share filling the void created by the absence of Nestle India’s Maggi from the market. Yoga guru Ramdev’s Patanjali Ayurveda also joined the race for a share of the market by launching atta noodles.

The ban hurt Nestle India’s revenue in three consecutive quarters. “The company faced an unusual situation with Maggi Noodles that impacted its operations during the 2nd, 3rd and 4th quarters. The results for the year and for the 4th quarter ended 31 December 2015 are not fully comparable with the results of the previous corresponding periods," Nestle India said in the company’s annual earnings statement.

For the 12 months ended 31 December, Nestle’s net profit fell 52% to 563.27 crore.

“There’s still room for growth. The company is launching more variants which will help in gaining market share. In the longer term, it is likely to cross 60%, but is unlikely to reach the level where it was before the ban. Competition has picked up really well during the absence of Maggi noodles in the market," said Abneesh Roy, an analyst with Edelweiss Securities.

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