Maggi wins back market share on sustained recovery

Global food and nutrition giant Nestle today said Maggi noodles in India has reported sustained recovery, regaining market share in the country almost a year after it was relaunched following a five-month ban in 2015.
"India grew strongly as the Maggi noodles business continued to gain back market share and comparatives turned favourable. The sustained recovery of Maggi noodles in India was also encouraging...Chocolates, driven by KitKat, also did well," Nestle said in a statement.
At present, Nestle enjoys 57 per cent market share in the instant noodles market in India as against 75 per cent before the crisis had hit the company. The instant noodles market in the country is estimated at Rs 2,000 crore with ITC's Yippee, Nepal-based Chaudhary group's Wai Wai and Patanjali Noodles among major players besides Maggi.

In June 2015, FSSAI had banned Maggi noodles in India following a Bombay High Court order, saying it was "unsafe and hazardous" for consumption after finding lead content beyond the permissible limit.
After a 5-month ban, in November last year, Nestle India relaunched the instant noodles in the market.
Earlier this year, Nestle India launched up to 25 products across various categories in a day to fend off competition.

The company today reported a total sales of CHF (Swiss Franc) 65.5 billion for the nine month period ended September 2016. It also cut its outlook for 2016, saying it expects organic growth of around 3.5 per cent for the year, which was earlier pegged at 4.2 per cent.

"In an environment marked by deflation and low raw material prices, we continued to privilege volume growth, resulting in real internal growth at the higher end of the industry in both emerging and developed markets. Our growth was broad-based across categories, allowing us to gain or maintain market share in most of our businesses," Nestle CEO Paul Bulcke said.
Besides, Nestle has decided to focus on ready-to-drink
segment saying India is one of the fastest growing markets for on-the-go and out-of-home consumption as number of millennial youth is increasing.
"In the next stage of engagement we will have both, ready to-drink and chilled dairy businesses. There are properties on which we can work," Narayanan said.

However, Nestle, which sells juices in some geographies including neighbouring Pakistan, would not them here as the segment is crowded.
Besides, Nestle which presently exports to around 40 countries, expects it to contribute more this year from the current 5 per cent.
"We are looking at that, as to how to increase our global foot print and here some global accounts might be interested in sourcing from India. Let's not forget that the Indian diaspora is present in Europe and US in a big way," Narayanan said.
Presently, exports contributes five per cent to Nestle's turnover and is expected to go up as it is introducing more products.

"Unfortunately while we started our exports after the Maggi crisis, the pace was not as brisk because many of these countries were still having the kind of...Effect of the crisis. Now all that is behind us and we would be more definitive on that," he said.
Nestle is expanding its footprint in India, primarily in top 600 cities of India, and would continue to invest as it senses great opportunity.
However, Nestle will continue to cater to rural India, which contributes around 25 per cent to it sales, with noodles, coffee, confectionery with redistributors which feed those regions.
"Whatever relevant portfolio we have got, I would have representation in the rural market. But with a very clear focus on the fact that the top 600 cities which are going to be hub of consumption...," he said.