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Changing Habits: Finding a New Recipe for Success in India's Food Markets Published : February 24, 2011 in India Knowledge@Wharton
It may not reach the levels of the Pepsi vs. Coke "Cola Wars" of the 1980s, but the signs of a major skirmish in the making are clearly visible in India's food sector. The instant noodles market in India, which has long been dominated by Swiss giant Nestle with its brand Maggi, has been seeing a flurry of activity with new entrants stocking the shelves in recent months. Be it

GlaxoSmithKline's Horlicks Foodles, Hindustan Unilever's Knorr Soupy Noodles, or ITC's Sunfeast Yippee, each is out to grab a share of the consumer's palate and wallet.
Devendra Chawla, business head for private brands at the Future Group, one of India largest retailers, puts it succinctly: "The instant noodles market [in India] is set to grow from Rs. 1,300 crore (US$288 million) at present to around at least Rs. 3,000-3,500 crore (US$666 million to US$776 million) by 2015 and therefore all the big FMCG [fast moving consumer goods] players have their eyes set on it." With producers spending far more money on the category than they are earning from it, "marketers can safely assume that the noodle wars have begun," Chawla notes. He should know. Tasty Treat, a private label from the Future Group, is one of the contenders in this space.

Instant noodles have been around for over half a century on the global menu card. They are believed to have been invented by Momofuku Ando, the founder of Nissin Food Products in 1958 in Japan. Packaged under the brand name Chikin Ramen, they were priced around six times that of traditional Japanese noodles and were considered a luxury item. In India, they were made popular by Nestle, which introduced its product here under the brand name "Maggi" in 1984.

Maggi Noodles came with a tantalizing promise -- ready to eat in just two minutes. The combination of convenience and taste proved to be potent. Over the years, other brands likes Top Ramen from Indo Nissin, Ching's Secret from Capital Foods and Wai Wai from CG Foods also wooed the space. But all of them played a distant fiddle to Maggi and could not make a dent in its overwhelming 90%-plus market share.

Ready for More
So what is different this time round? What makes the current crop of new entrants a more formidable competitor to Nestle's Maggi? Industry analysts say that it's a combination of factors. The Indian consumer is a lot more open to the "instant food" categories and far more demanding of more choices now than he or she ever was before. And the current players have both the brand and muscle power: All of them are known for their strong marketing prowess.

Brand consultant Harish Bijoor, CEO of Harish Bijoor Consults and visiting faculty at the Indian School of Business at Hyderabad predicts that the noodle wars will become more apparent, "especially with ITC -- known for its 'in the eye' kind of advertising campaigns -- launching its version of the product.... With Indians more amenable to changing their eating habits, instant meal categories like these are set to witness a lot of action."

Shubhajit Sen, executive vice president for marketing at GlaxoSmithKline (GSK) concurs. In an interview with the daily newspaper, The Economic Times, Sen said GSK decided to enter the segment because "consumers were looking for a choice in instant noodles; combined with that, the equity of This is a single/personal use copy of India

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