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INTERVIEW

“We are expecting to cross Rs 820 crore in FY 2019-20”
Monday, 09 March, 2020, 08 : 00 AM [IST]

 Instant noodles industry in the past couple of years has become a serious field with many contenders. The noodles industry has also seen many innovations and experimentation with flavours to attract the consumers.

Ashwani Maindola spoke with Varun Chaudhary, executive director, CG Corp Global, who looks after the Wai Wai business both in India & globally, to delve deeper into what makes the only ready-to-eat instant noodles brand in India click. Excerpts:

How do you analyse the state of instant noodles industry in India?
Due to the ease of preparation and convenience, instant noodles are always in demand. The market is expected to grow at CAGR of 8 to 10%. Activities  from noodle players and urban lifestyle are two catalysts for such growth momentum.

Elaborate on current key trends in the noodle industry.
RTE and cup noodles are becoming extensively popular due to the ease they offer. With the rising health-consciousness among Indian consumers, companies are extensively trying to align themselves with the healthy variations of noodles. There is a lot of focus on curating different flavours aligned with India’s regional preferences as well.
 
What is Wai Wai – the brand’s India story?
Wai Wai was first introduced in India via exports in the 1990s. We started as a packet of Nepali noodles loved by boarders and travellers which can be eaten raw, and went on to making our way into the homes of more than 48 countries across the globe. Our brand travelled through the hearts and minds of college-going students, and its growth has enhanced through word of mouth and it’s unique flavour. Given it is a ready-to-eat noodle, it gives the foodies a diverse choice of preparation. Our brand made its manufacturing debut in 2006 with its unit in Sikkim, which helped establish a convenient supply network for the region. It became an instant and massive success in North East India.

Along with factories in its foothold, the North East India market (in Sikkim, Guwahati, Silchar), we have also set up units in Rudrapur (Uttarakhand), Chittoor (Andhra Pradesh) and Purnea (Bihar). We recently expanded Silchar production line and set up a new factory in Rajasthan.  All our factories operate in 95% capacity which is a testimony of our India growth story.

Already having established ourselves as a market leader in most of the North East regions, we are now focussing on expansion in Southern and Western India to increase our market penetration. We understand our consumer preferences and the market demand and are confident that we will double our revenues three years from now.
 
How do you evaluate the current position of your brand, the only RTE noodles in India?
Our brand is in a good space with a 16% growth rate in 2019, many points ahead of the noodles industry’s growth rate of 10-12%. After the market leader in the instant noodles category, the maximum number of company owned manufacturing plants belong to us in India. As mentioned, each existing noodle line is running with more than 95% capacity utilisation. We expect our market to reach around 20% by 2020.
 
How do you see the competition within the noodles industry?
The noodles industry in India is dominated by about five major players including ours. Every brand offers a unique range of flavours and products which gives the consumers a fair choice.

That being said, what sets us apart from our competitors is that we are the only ready-to-eat noodles available in the Indian market. Being a ready-to-eat product means, that our noodles are pre-cooked and can be eaten right out of the packet. This feature enables our consumers to consume the noodles in a diverse way- You can eat it, soup it and lunch it!
 
How has been the business in India and the acceptance by consumers?
Our brand enjoys 17% market share in the country with some states having a share in excess of 60%. Its robust market share is owed not only to its unique taste but also its fierce fight for markets in urban and tier-2 India. Growth rate recorded for us is 16% in 2019 while the India industry growth rate is 10-12%. CG Foods India sales crossed sales of Rs 710 crore in FY 2018-19 and we are expecting to cross Rs 820 crore in FY 2019-20.

Owing to the growing consumer demand in India for our brand, we have set up nine manufacturing lines which run at 95% capacity. We are adding another manufacturing line in Ajmer to cater to the demand in the Western market.

Given that the brand is the only ready-to-eat noodles available in the Indian market, it hugely resonates with the millennial generation.  Unlike ordinary noodles, ours is pre-cooked, flavoured & fried and comes with three unique & complimenting seasonings: Taste enhancer, onion flavoured oil and chilli powder.  The biggest brand ambassadors of us are boarders (hostellers) for whom it’s just not noodles but a nostalgia and a staple diet.

Based on your experience thus far, How do you see growth prospects for ready-to-eat noodles and do you have any plans for further expansions?
Our first manufacturing unit was set up in 2006 in Sikkim and ever since the brand has been a massive success in North East India. Being an easy and tasty snack option, it is loved by people of all age groups and we definitely have seen the demand grow pan-India. In line with this growth, we are doubling our production for the South & West markets by adding a new manufacturing line that will cater to the West, while the existing manufacturing plant in Chittoor which catered to both South and West will purely focus on the South. We are also bringing in new flavours in our Southern markets aligned with the regional preferences.

Taking cue from the acceptance in the markets, our vision for the brand in three years from now would be doubling the revenue.
 
Do you think the regulatory and policy regulations in the country are feasible and helpful in ease of doing business? What more do you think the government should do to further boost the food industry?
I think the government is certainly actively trying to work with the industry to improve the ease of doing business. To boost investment in the current economy it plays a very crucial role. I think the onus should also be put in ease of starting up in India. With the dragging economy, the focus on the same will help drive investment having various cyclical effects on the industry.

The government should focus on promoting processing industries with reduced GST rates and making available capital at low interest rate to promote expansion of industry.
 
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