Competition in the Rs 1,000-crore instant noodles market in India is hotting up, with FMCG company Hindustan Unilever Ltd (HUL) getting ready to launch an offering under the ‘Knorr’ brand (made popular by its soups). The launch follows GlaxoSmithKline Consumer Healthcare (GSKCH) launch of the noodles brand ‘Foodles’ yesterday.
HUL plans to test-market the product in western India. Worldwide, HUL has been extending the Knorr brand to various kinds of foods, and Knorr noodles are already available in Pakistan. Asked to comment on the development, an HUL spokesperson said: “As a policy, we do not comment on market speculation.”
HUL is the second-largest player in packaged soups, which Nestle's Maggi tops. Its noodle launch will also bring it up against Maggi, which created and then dominated this category for years. Today, Maggi's market share is approximately 70 per cent.
For HUL, launching noodles under the Knorr brand is expected to help it grab market share faster, since the name has strong brand equity.
Analysts add that HUL’s plan to introduce noodles could be aimed at strengthening its food business, in which it also has such brands as Kissan, Annapurna and Kwality Walls. Food contributes approximately 20 per cent to HUL’s total business and grew just 9 per cent in the third quarter (October-December, 2009).
The noodles market has been growing at 10 to 15 per cent annually, presenting significant potential despite the presence of large players. GSKCH, for instance, is riding on the popular Horlicks brand for its Foodles sub-brand. The company plans to capture 10 per cent of the organised noodles market within a year.
HUL had launched a snack similar to noodles under the name of 4 O’Clock Tiffin in 2001. It was a rice-based snack that came with a chutney mix, and was popular in South India. But, the product failed and the company withdrew it.
