Nestle Maggi

Size of ready to eat market is approximately Rs 600-700 million. ITC: In 2002, when we entered the food business, if you wanted to enter almost any food product you would have competition that had already established itself. Nestle had a fairly large range of products, they have been in India about 60 years, Parle is about 60-70 years old, Britannia has been around for almost a 100 years. Then take tea or coffee, you had Tata, HLL or instant mixes, there was MTR and Gitz. Pasta has been introduced by us for the first time in India. If you say that we compete with noodles, then noodles have been around for 25 years or more. We are late entrants which is a fact of life. And as a late entrant you don't want to get into chocolates. Cadbury and Nestle are already there in that space.

Nestle steps up efforts to grow market share Sindhu J. Bhattacharya New Delhi , April 22 THE difficult operating conditions across the fast-moving consumer goods (FMCG) industry have affected sales performance of some products of Nestle India last fiscal. Though the company says that it has maintained its market share in most of the product categories by taking a few measures, including managing input costs and price points, improving distribution network as well as market penetration and making more effective use of its supply chain, sales of some key products remained below expectations in 2004. Take for example liquid UHT (long shelf-life) milk. The Nestle India Chairman, Mr Martial G. Rolland, said in the latest annual report that the market performance of this product has been below expectations and a full review is being undertaken. And even as Maggi noodles continue to have the highest sales volume in India, among all Nestle companies, Maggi sauces have performed below expectations during 2004 due to aggressive competition, he added. Milkmaid Sweetened Condensed Milk did not perform as per plan, and Mr Rolland said the company is taking corrective action to improve the performance of Milkmaid Squeezy. Similarly, in confectionery, Nestle Chocostick is being reviewed, even as the company said products such as Nestle Milkybar Eclairs, Nestle Eclairs and Polo lozenges have performed well. In the recent past, Nestle has been reviewing the performance of Milo Chocolate Energy Food Drink and it launched Milo with `Badam Shakti' in select cities of Tamil Nadu during last fiscal. The Chairman said performance of the new variant is being monitored.

Among the products that continue to perform well from the Nestle stable are Nestle Munch and Nestle Kitkat chocolates, Nescafe instant coffee and Everyday Dairy Whitener. Mr Rolland said in the annual report that the company is aware of the fact that with changing lifestyles, consumers are seeking food products that provide greater convenience, along with taste and pleasure, and that Nestle is working on several initiatives to provide consumers with products of their choice. Among new products that Nestle launched last year are Nestle Coffee Eclairs, Nestle Chocolate Eclairs, Nestle Sweet Lassi and Nestum 123. The company reiterated its commitment to the `value for money' and affordability planks and retained investments in brands, while refraining from passing on the entire increase in commodity prices to consumers.

Earlier competition from HUL and Top ramen.

The World's Top Food Companies by Food Revenues in 2004 Nestle ($33.8bn) Unilever ($28.1bn) Kraft Foods ($25.7bn) PepsiCo ($16bn est) ConAgra ($14.5bn)

General Mills ($11.1bn) Kellogg Co ($9.6bn) Danone Group ($8.5bn) HJ Heinz ($8.4bn) Sara Lee Corp ($7.6bn)

Maggi Today

The year 2003 saw India leading in worldwide Maggi sales. The brand has grown to an estimated value of Rs 160-170 crore and contributes at least 8– 9% to Nestle India’s top line. All the same, some FMCG analysts feel that the brand has not done much to expand the noodles category. Even after 20 years of its launch, the size of the instant noodles market is yet quite small at Rs 200 crore. But yes, the parent company, Nestle India Limited has certainly encouraged the brand to enter into other culinary products. Carlo Donati told a leading newspaper that he wants to sell two and a half times of what he is selling today, in the next 10 years.

Of course, being a first-mover - or even a market dominator - counts for nothing if marketers let their guard down. Maggi noodles, which built itself on the taste-andconvenience platform through the 80s and early 90s, started facing the heat from Indo Nissin’s Top Ramen brand around 1995. The latter began pushing forward aggressively on a combination of taste variants, smart audience segmentation and Shahrukh Khan’s brand endorsement.

Nestle promptly re-jigged its offering with a new taste - which didn’t go down well with the consumer. In 1999, Maggi was relaunched with its original taste, and sustained efforts saw the brand reclaiming lost ground. Since then, the brand has been innovating constantly to keep share. “Maggi adapted to local tastes and withstood competition over the years and has continuously sensitised itself to the evolving Indian consumer,” says Martial Rolland, chairman and managing director, Nestle India.