In August, Nestlé, the country’s largest foods company, launched Maggi Multigrainz instant noodles with corn, wheat and millets like ragi and jowar. The pack retains the brand’s flagship colour, yellow, but has been modified to highlight these ‘healthy flours’. “The traditional ingredients in the product used are a rich source of fibre, calcium and protein,” says Nestlé India General Manager (foods) Shivani Hegde.
The television commercial for Maggi Multigrainz thus emphasises the nutritional benefits of noodles made from traditional flours. The advertisement aims to tug emotional strings by comparing the multiple benefits of the ingredients to the several qualities of a mother who plays an important role in deciding the nutrition of her family.
Is it just another variant? It is actually a strategic move to fortify Maggi’s leadership in the market. It had joined the health bandwagon a few years ago when it rolled out atta (whole-wheat) noodles and came out with the brand promise of “taste bhi, health bhi”(taste as well as health). Instant noodle is after all a large market — Rs 1,137 crore in 2009 market (source: AC Nielsen) — in which Maggi has a share of above 85 per cent. Naturally, rivals too want a piece of the action.
Thus, GlaxoSmithKline and Hindustan Unilever have come out with Horlicks Foodles and Knorr Soupy Noodles, respectively. New entrants felt the ‘health’ platform was a key point of differentiation, and used it to flank the leader. Foodles is available in two variants: ‘Regular’ and ‘Four Grain’, both of which are available with a ‘health-maker’ sachet that contains a multi-vitamin-enriched spice mix. Hindustan Unilever has played to Knorr’s brand strength, differentiating its product by offering instant noodles in soupy gravy. Maggi Multigrainz looks like Nestlé’s answer to the challengers.
Hegde says the decision to launch Maggi Multigrainz was driven by research which showed increased consumer awareness for balanced nutrition. KPMG Analyst (consumer markets) Anand Ramanathan concurs. According to him, the move was expected and seems like a natural extension of the atta variant. Ramanathan also attributes the launch to the global pressure on food companies to produce healthy foods in the RTE (ready-to-eat) segment. “This is simply an investment the brand is making for the future,” says he.
But how has atta done since its launch? While rivals and analysts say the numbers are still small, Nestlé says it has done well. Also, is Maggi Multigrainz good enough to steal the limelight from rivals? “GSK’s Foodles, which has been riding on Horlick’s strong brand equity in the health food segment, already has leverage,” says Kotak Institutional Equities Analyst (consumer division) Manoj Menon. Maggi will also have to balance its portfolio so that its products complement and not cannibalise each other.
The instant noodles market is driven by differentiation. A me-too product cannot work. ITC, for instance, has tried hard for some time now to come out with a product to take on Maggi, but its cooks have not been able to come out with something that stands out. This is because Nestlé has plugged almost all the gaps in the market with several variants and flavours. Analysts say that in spite of the large portfolio, the bulk of Maggi instant noodles sale comes from one flavour, Masala. The others are obviously meant to block out rivals. Menon believes that the brand must not lose sight of its core market, and a little a bit of competition eating into its market share should not deter the company from losing focus. “Nestlé should ensure competitors operate only in the niche segment and continue to stay afresh with new products,” says Menon. As healthy competition breaks out among food companies, consumers definitely seem to be the ones benefiting.
