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While brand Maggi may have resurrected itself post its ban last year, growth in penetration and size of noodles as a category is yet to bounce back to the pre-ban levels.
Penetration growth in the overall noodles category between January and May 2015 stood at about 40 per cent. This dropped to 15.5 per cent when the ban was imposed from June to October 2015. Though the growth climbed back to 30.1 per cent after the ban was lifted (Nov-April 2016), it is still not back at normal levels, according to data by market research agency, IMRB.
“Noodles as a category had a very sharp decline in penetration on account of the crisis. Once the ban on some of the brands was lifted, penetration growth is getting back, but still it is nowhere near what is was. It will take at least another six months, if not more, for the category to go back to its original levels,” said K Ramakrishnan, General Manager and Country Head, Household panel, IMRB Kantar World Panel.
In terms of absolute volumes, growth in volumes before the ban period (January to May 2015) was at 89,869 tonnes and it dropped to 20,511 tonnes during the ban period. After the ban was revoked, it recovered to 62,867 tonnes.
“Volume growth can come and go as stocks are piled up but penetration needs to be higher, which is an area of concern for the noodles category, since it shows the number of households which bought into the category and made repeat purchases. It is light and infrequent buyers who make for consistent brand growth momentum which is yet to be seen in the category,” added Ramakrishnan.
While Maggi continues to be the leader in the noodles category with a 58 per cent volume share, ITC’s Sunfeast is the nearest contender with a 23 per cent share as of April 2016.
The new MD of Nestle Suresh Narayanan has been on a fire fighting mission to resurrect the beleaguered Maggi brand.
Having taken a hit ₹450 crore after the ban of its noodle brand due to reports of high lead content, Nestle re-launched its flagship brand last November after it had been out of the market for nearly five months. Last year the Maggi franchise had sales turnover of ₹2,500 crore.
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