Marico Ltd. want’s a piece of India’s growing instant noodles market, and the owner of Saffola is targeting the premium end. That will bring it in direct contest with Nestle Ltd. and ITC Ltd.
Saffola Ooldes, oats and wheat noodles, is the latest in the series of launches—from a kadha and honey to chyawanprash—in the food category that Marcio estimates will generate up to Rs 500-crore revenue in the fiscal through March 2022. While only available online yet, the noodles will eventually be sold at offline stores as well.
Instant noodles is a fast-growing Rs 8,973-crore segment within the food category. Nestle’s Maggi controls more than half of it. Euromonitor International expects it be worth Rs 12,394 crore by 2022.
“The aim is to expand the share of stomach for branded packaged snacks within the snacking occasion,” Koshy George, chief marketing officer at Marico told BloombergQuint in an emailed response.
Saffola’s Oodles. (Source: Marico Ltd.)
Marico is pitching the Oodles as a healthier option. “Saffola is focused on enabling consumers to eat healthier,” George said. “The trend of healthier eating is on the rise, and the focus is on building a healthy segment within the overall market, as there is headroom.”
Yet, both Nestle’s Maggi and ITC’s Sunfeast Yippee come in wheat and oat versions—the so-called healthier category that Marico is targeting. And they are cheaper.
Marico has priced Saffola oodles at Rs 20 for a pack of 46 grams. Maggi costs Rs 25 for a pack of 73 grams, while a 70-gram stock keeping unit of Sunfeast Yippee Is sold for Rs 20.
Nirmal Bang said in a report that Marico is looking at categories with one or two dominant incumbents to make space for itself.
According to an ICICI Securities report, the premium end is about 10% of the market, ICICI Securities in its report on Marico. “Let’s say, if it achieves a 20% share in this segment, it will reach its objective of Rs 100 crore revenue from this new business line.”
Dhanraj Bhagat, partner at Grant Thornton India LLP, said Soffola’s strong brand name and Marico’s “solid distribution network” will help. The company has a distribution reach of 5.1 million outlets.
But the success will depend on taste, he said. They will have to test the product in the first six months and if it fails the taste test, they be back to the drawing board, he said.