Nestlé takes food fight to local rivals with ready-to-eat poha, upma
Premium- Maker of Nescafe and Munch chocolate adds ready-to-eat poha and upma to take on local home-grown consumer goods companies, diversify portfolio
- The Indian arm of Swiss food and beverage firm launched the products earlier this month, with packs starting at ₹20
Maggi, the flagship brand of the Indian arm of Swiss food and beverage company Nestlé, famed for its instant noodles, is going ethnic with ready-to-eat poha and upma.
The move is expected to help the maker of Nescafe Coffee and Munch chocolate compete with local home-grown consumer goods companies such as MTR Foods, iD Fresh Food and Gits.
Nestlé India launched the products earlier this month, with packs starting at ₹20.
The launch is in line with the company’s efforts to diversify its portfolio, and keep apace with new launches. It has introduced 61 new products for the Indian market since 2016.
“With the advent of modern lifestyles and changes in consumer behaviour, Maggi has expanded its offering in the ready-to-eat segment in India with the launch of Maggi Ghee Tadka Upma Express, and Maggi Masala Onion Poha Express, providing convenience and taste to our consumers, especially millennials," said Nikhil Chand, director, foods and confectionery, Nestlé India.
The products have been launched in a phased manner. In the first phase it was launched in Delhi, Gurgaon, Mumbai, Pune, Indore, Ahmedabad, Surat, Vadodara, Chennai, Bengaluru and Hyderabad, Chand said.
The upma and poha will be sold under its popular Maggi brand that falls under its prepared dishes and cooking aids’ category.
The category also includes Maggi ketchup, a variety of spice mixes used to cook Indian dishes, apart from instant noodles and contributes about 29% to the company’s domestic business, according to an August 2019 investor presentation.
India’s ready-to-eat market is split between home-cooked meals and packaged preparations, but is largely fragmented. That’s because Indians typically prefer freshly cooked preparations, such as hot idlis, paranthas, eggs or poha, rather than relying on packaged foods. But growing urban consumers have prompted companies, such as PepsiCo and Marico, to launch packaged masala oats and instant upma mixes among other such items.
Consumers often seek authenticity in taste when it comes to packaged food options, said P.C. Musthafa, CEO, iD Fresh Food, which sells south-Indian staples such as idli and dosa batter. Consumers in India, he said, are unwilling to compromise on taste for convenience. “They are also more likely to pick formats and flavours familiar to them," he added, explaining the popularity of ethnic meals that have been launched over the past few years.
The entry will help Nestlé leverage and play in a largely unorganized breakfast market, said Abneesh Roy, senior vice president, institutional equities, Edelweiss Securities. “The brand recall of Maggi and Nestlé’s wide distribution are likely to work in its favour." But taste will be a key determinant, as Marico is also testing this category via Saffola in Delhi, he added.
The company’s push to launch new products comes at a time when it has stepped up efforts to diversify its portfolio amid changing consumer preferences and its own experience with the ban on Maggi Noodles in 2015, which resulted in the product being shelved for a few months. The company has since been on an innovation drive, launching new variants of Maggi noodles, relaunching beverage brand Milo, and adding more upscale chocolates to its offerings.
