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Nestle plans up to 25 products with eye on Patanjali

Having 'weathered' the Maggi storm, Nestle India is embarking on a product offensive, launching up to 25 products across various categories to fend off 'disruptive competition' from new rivals like Patanjali.

twitter-logoPTI | June 20, 2016 | Updated 19:21 IST

Having 'weathered' the Maggi storm, Nestle India is embarking on a product offensive, launching up to 25 products across various categories to fend off 'disruptive competition' from new rivals like Patanjali.

The company, which now claims 55.5 per cent share in the instant noodles market, however, says financially it could take a few more quarters to fully overcome the Rs 500-crore hit it took because of the ban on Maggi last year.

"We have weathered the storm, although we still have two cases pending in the court. Now it is the time to ride the wave," Nestle India Chairman and Managing Director Suresh Narayanan told PTI.

For this Nestle India is focusing on rejuvenation of existing brands, adding new products and entering into new categories targeting a wide range of consumer segment from babies, to youth to women and adults in urban markets.

Elaborating on the company's new product launch programme, Narayanan said: "There are about 20-25 product launches, some of them have happened, some are happening and some will happen in four to six weeks time. This is probably the single largest window of new product launches in a long time."

The new products include seven variants of Maggi noodles, Greek yogurt brand 'Grekyo' and protein growth brand 'Pro-Gro' in dairy segment, besides multiple products in chocolate and confectionery, as also new offerings in coffee and tea.

"We are trying to look at product concepts that are differentiators. The launches are multi-targeted in terms of consumer base that we are looking at," he said.

Stating that the company has also shortened the time for launching new products to 4-6 months from 12-15 months earlier to keep pace with the changing dynamics in the market, Narayanan said: "Today the urban Indian consumers are changing quite rapidly, their tastes are changing."

When asked about competition from Baba Ramdev's Patanjali Ayurved, Narayanan said: "That is the kind of competition we would positively call disruptive competition. They come and redefine the rules of the game...I have said that script for the future will be written by redefining the rules of the past."

Asked whether Maggi has been able to reach the pre-ban levels, he said, "Today we have 55.5 per cent market share compared to 77 per cent before withdrawal. Our hope and effort is to get back to where we were."

The instant noodles market in India is estimated to be Rs 2,000 crore with ITC's Yippee, Nepal-based Chaudhary group's Wai Wai and Patanjali Noodles among major players besides Maggi.

Narayanan declined to share an exact timeline when Nestle India will fully overcome the financial hit due to Maggi ban.

"That impact of Rs 500 crore was quite significant in our books. As our sales evolve, and growth starts to come back it is fair to say that we will recoup that ground...We are improving sequentially quarter to quarter," he said.

Narayanan said Nestle India has already commenced production of Maggi noodles on a full scale at its plants and workers who were relocated to last year when production was suspended have returned to their original locations.

The company is tapping digital media to reach its target customers.

"We have not been as active on e-commerce as we are today... The window of opportunity came with relaunch of Maggi. Many of our existing products in the portfolio are now going in the e-commerce route. Digital media is a strategy we have embraced quite dearly. Our entire Maggi relaunching story was on digital. Our combination strategy has also changed," he added.

Nestle said it will also enter the ready to drink category with Nescafe brand.

Products launched today include, Maggi noodles no onion no garlic masala, Maggi cuppa noodles under masala, chilly chow, hot heads peri peri and hot heads barbeque pepper flavors.

Other instant noodles flavors include, peri peri, barbeque pepper, chilli chicken and green chilli.

It has also launched Maggi pazzta in masala, cheese and mushroom flavors.

Other products include passion fruit, mango and pineapple, watermelon and coconut and rose under Nestea brand, ceregrow toddler cereals and cerelac with iron fortification.

In June 2015, FSSAI had banned Maggi noodles following a Bombay High Court order, saying it was "unsafe and hazardous" for consumption after finding the lead content beyond permissible limits.

After a five-month ban, in November last year, Nestle India relaunched Maggi noodles in the Indian market.

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