The Hindu Business Line : Indo Nissin launching own distribution network

Indo Nissin Foods Ltd (INFL), the makers of Top Ramen and Cup Noodles, is setting up its own distribution network with an initial investment of Rs 2 crore and hopes to increase its presence in the North and West, while consolidating business in the southern market. The company will also be launching new flavours for its instant noodles, Top Ramen, as well as for Cup Noodles very soon.

The company, a subsidiary of Japanese noodle giant Nissin, recently parted ways with its distributor of nearly 10 years, Marico. It will now set up its own distribution network, reaching out more aggressively to 1 lakh plus towns as well as to towns with populations of 20,000. Nissin is also hoping to get other Japanese companies to use the channel in the future. The required supply chain and IT initiatives will follow that along with a significantly bigger advertising campaign.

“ We are thankful to Marico and we have parted in the most friendly manner with mutual understanding of each other’s future needs,” said Mr M. N. V. V. Prasad, Sales and Marketing Manager, INFL.

Mr Prasad was confident of not only matching, but improving the distribution reach that the brand enjoyed last year. Nissin is stronger in the South (28 per cent of revenues) compared to the North (23 per cent) with a total market share just short of 10 per cent. But with a dedicated team of its own, it’s betting that sales will soon justify the North-South market share of 30 and 25 per cent respectively in the instant noodles category.

Nissin, which also enjoys 90 per cent share of the cup noodles market, is also upbeat about the segment itself growing with the entry of other brands like Maggi. Noodles in cups contribute only about 3-4 per cent of total noodles sales, however, with 85 per cent contribution from metros.

The Rs 60-crore company saw a growth of 40 per cent last year, ending March 2008. A campaign, designed by Hakuhodo Percept, with more than 70 per cent enhanced budget will support the business plans.

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