Nestle to sell 40 gm Maggi packets for Rs 10 to expand market share

In a bid to expand market share and stave off competition, Nestle's popular product Maggi will be sold in Rs 10 packets, Mint has reported. The decision has been taken to gain the lost market share in smaller towns and villages with an attractive price point.

The Indian arm of the Swiss company, which used to sell 100 grams of Maggi for Rs 10 had raised the price to Rs 12 in December 2014, which was further revised to Rs 14 in February 2022 to offset the rise in input costs, the report said. The latest Rs 10 pack targets "Rurban" markets (rural and small markets) in 15 states and will weigh just 40 grams.

The attraction of Rs 5 and Rs 10 price points

Price points such as Rs 5 and Rs 10 are easier to remember and are perceived as being affordable by customers. This is especially true for low-priced consumer items such as quick snacks, biscuits, and shampoos.

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A Nestle India representative was quoted in the report as saying, "There is an increasing preference for spicy products all across India. Maggi has always been in tune with what our consumers that meet this need. We already have Maggi special masala, Maggi spicy garlic and Maggi manchurian noodles in urban markets. For "rurban markets, we recently launched "Teekha Masala" and "Chatpata Masala" variants of Maggi noodles for Rs 10."

What do the experts think about the decision?

Industry experts have said that Nestle India's renewed push towards Rs 10 stock-keeping units (SKU) is seen positively by channel partners, the Mint report said. Expanding smaller packs to newer markets comes as Nestle pushes attempts to push deeper into the country's markets. The company expanded its presence by adding around 55,000 villages and 1,800 distribution touch points in 2022, Nestle said in its annual report.

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The latest decision is expected to keep local competition in check as smaller companies have gained ground due to cooling inflation. Volume growth of local brands has been more than national brands over the 12-month period that ended of April 30, the Mint report cited a research report. Brands that operate in a single market are defined as local brands.

Maggi's contribution to Nestle's portfolio

In 2022, Maggi noodles contributed 32.2 per cent to the company's domestic sales, according to the annual report for the year. Maggi has more than 60 per cent market share in the packaged noodles market in the country.