The fight for the number two spot in the estimated Rs 100 crore branded soups market is intensifying, with Capital Foods’ Ching’s brand and Nestle India’s Maggi laying claim to this position in the three-player market.
Hindustan Unilever’s (HUL’s) Knorr brand of soups is said to be the leader, with a 65 per cent market share in modern retail. However, Capital Foods, the Maharashtra-based makers of Ching’s brand of noodles and Chinese soups, launched in September 2008, says it occupies the second slot, claiming to have dislodged Nestle's Maggi soups.
Ching’s Chinese soups, according to Ajjay Gupta, managing director of Capital Foods, claims to have cornered a market worth about Rs 20-22 cr in modern retail, ahead of Maggi soups that has about Rs 15-17 cr of market share. "Since the launch of our soups, the market has seen a lot of action. Our rivals, too, have been forced to play around with the positioning of their brands. We are currently holding the second position in the soups market and hope to challenge the leader in the next two-three years," Gupta told Business Standard.
Indivision India Partners -- a $425 million Mauritius-based private equity firm -- has a minority stake in Capital Foods. Indivision has an alliance with Future Capital Private Equity, a part of the Kishore Biyani group, which runs retail formats such as Pantaloon and Big Bazaar.
But, Nestle India also claims the number two position. “Modern trade is an important channel for products such as soups. We are number two in the business, and gaining share,” says Shivani Hegde, general manager (foods), Nestle India. Nestle launched Maggi soups on the health plank in 2005 under a 'taste bhi, health bhi' slogan. Since then, it has also introduced Maggi 'Sanjeevni soups', with traditional ingredients that are “good for you.”
However, HUL's Knorr soup brand is clearly ahead in the race. Knorr is available in 17 variants, with the recent addition of the Indian soup range (launched in 2008). "Our new range is aimed at making soups more relevant with flavours inspired by the familiar Indian palate," a spokesperson of HUL said.
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According to industry experts, the branded packaged soups business, that has crossed Rs 100 crore on retail prices, is growing at 20 per cent, year on year. Five years earlier, this market stood at around Rs 35 cr.Technopak's Purnendu Kumar says, “Soups is an under-penetrated category, where the incidence of purchase is less as compared to other FMCG categories, but with the coming of modern trade, the category will only grow.”
To help their brands grow, HUL has already leveraged the Knorr brand by entering the ready-to-cook category in 2008, while Nestle India has launched the Maggi brand of 'Bhuna Masala' as a cooking aid. Capital Foods is keeping its focus on expanding the Ching’s brand. "There is no slowdown in the foods category. We are growing our Ching’s instant noodles and soups. We have already overtaken the Top Ramen brands in instant noodles, while we are the second players in the soups market," says Ajjay Gupta.