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How is instant noodles brand Wai Wai staying relevant in a Maggi dominated market?
For starters, one can eat it straight from the pack. For the rest over to GP Sah, global business head - FMCG, Chaudhary Group (Wai Wai's owner).
Wai Wai, the Nepal-based instant noodles brand (from CG Foods), is telling Indians that they can eat noodles without cooking it, like a crunchy snack. Over the last few decades, the brand has been actively strengthening its presence in India and has found strong footing alongside brands like Maggi (Nestle) and Yippee (ITC).
Unlike the category code of instant noodle advertising, Wai Wai’s ads give ‘ad moms’ and the steaming bowls a clear miss. The brand has been pushing the snack format of consumption.
The noodle cakes of its flagship product Wai Wai are flavoured and brown in colour. They can be eaten straight out of the pack. Wai Wai also sells a broken down noodle version in a ‘bhujiya’ format. While the bhujiya sachets (price) start at Re 1, the noodle packs start at Rs 5. The Rs 5 and Rs 10 packs sell the most.
It also has regular noodles in its portfolio that need to be cooked. Apart from the regular flavours, it has the atta variant. Wai Wai evenoffers a Jain noodle variant which does not include garlic and onion in the ingredient list.
The company claims that it commands 20 per cent of the instant noodles market (in volume terms) in India. Market research agencies peg Wai Wai’s value share at around 11 per cent. Reports suggest that the Indian instant noodles market is valued at around Rs 8,000 crore to Rs 10,000 crore. The market is currently dominated by Nestle’s Maggi.
However, there’s a rather interesting story about how the brand actually entered India. It has a lot to do with the friendly relations between India and Nepal. Wai Wai was brought to India by the Nepali nationals, who were travelling to the country, thanks to the limited border restrictions in the past. The brand went wherever Nepalis went.
Looking at the growing appetite for the product in India, the company decided to initiate its export business in the early 1990s. Export-backed distribution expanded across north and east India. However, repeated blockades due to insurgency and the cost of exporting forced the company to opt for a better solution – local manufacturing.
CG Foods set up a manufacturing unit in Rangpo, Sikkim (in 2005), with an office in Siliguri (West Bengal). This was followed by units in Assam (Chaygaon and Silchar), Uttarakhand (Pantnagar), Andhra Pradesh (Chittoor), Bihar (Purnia), and the latest one being in Rupangadh, Rajasthan (in 2020).
In terms of consumption, India currently consumes 25 per cent more Wai Wai than Nepal. The opportunity lies in the under-penetrated noodles market in India. Nepal, a country of around 30 million people, has an annual per capita noodle consumption of 55 packs. For India, which is a country of 1.3 billion-plus people, it is a meagre five packs.
GP Sah, global business head - FMCG, Chaudhary Group, expects the consumer spending on Wai Wai brand to cross Rs 1,000 crore in FY 20-21. The brand recently appointed Havas Media as its media agency, and has allocated Rs 10 crore for advertising for the ongoing financial year (apart from on ground promotions).
As far as distribution goes, it is driven by general trade, followed by presence in modern trade outlets like Reliance, DMart, Big Bazaar and Spencers. Wai Wai entered e-commerce by listing on platforms like BigBasket, Grofers, Amazon and Flipkart last year.
The company had to drop its plans to export from India due to cost issues. It now has manufacturing plants in Bangladesh, Serbia and Kazakhstan. CG Foods sells Wai Wai in more than 35 countries, including the US, UK, Japan, Australia, and the Middle East.
The brand is currently putting into motion plans to expand the Wai Wai brand beyond noodles, into categories like sauces, vinegar and other ready-to-cook products.
Edited excerpts:
Unlike Nepal, India is a large and diverse country. What kind of challenges have you faced due to its geography and culture?
India has its own traditional food and snacking habits, and noodles still have a long way to go in terms of acceptance. Apart from that, the appetite for spices and flavours also vary. Noodles compete not only within the category, but also with other Indian food options.
The language is a barrier when it comes to advertising. The southern states are clubbed as South India, but they are very different. It poses a challenge in terms of allocating resources for four different states.
By spending the same amount of money, the geography we can cover with Hindi communication is pretty big. You can’t communicate Malayalam in Karnataka, but can still manage with Hindi in the western markets like Maharashtra.
The price of Wai Wai bhujiya sachets start at Re 1. Isn’t it a challenge to maintain that price point? Also, the states have their own version of the bhujiya snack...
Its (bhujiyas) contribution to our revenue is 15 per cent, but we hardly make money there. We are continuing it because it introduces the brown ready-to-eat noodle to consumers at an early age. A child can easily pick up the Re 1 pack.
The innovation came not just from the idea to propagate RTE noodles, but also out of compulsion. The underweight noodle cakes from the manufacturing process can’t be sold as noodles. Those are turned into bhujiya.
Certain markets haven’t accepted the Wai Wai bhujiya. It is probably because of other readily available alternatives. Like, in Rajasthan, people have their own bhujiyas, snacks, etc.
Why did Wai Wai choose to remove the ‘mom’ layer from its ads? Also, they don’t highlight the noodle format…
The positioning is a strategic decision. Wai Wai has always been targeting the 13-30 year olds (age group), who are the actual consumers. Also, it is because of the unique feature of instant consumption. It can always be eaten straight from the pack, but it is difficult to get people to eat it that way.
It can be a snack for a student, or someone who is working late at night, or is travelling every day. You don’t have to cook it, and it is a more filling snack than a pack of potato chips. A Rs 10 chips pack offers 20 gms, and this pack of noodles offers 70 gms for the same price.
"Today, our manufacturing footprint is bigger than Maggi."
Your rivals Nestle and ITC have popular brands and deeper pockets. Marico has also entered the market with its Saffola Oodles. How are you countering it?
This is good competition. Today, our manufacturing footprint is bigger than Maggi. We are trying to play in a category which is still under-penetrated. Any new entrant, which brings in some interesting variant and communicates noodle consumption, is always welcome. That’s how it will grow.
Our brand has been growing at a CAGR of over 20 per cent. We are beating the market growth rate, which is between eight and 11 per cent. We are growing in terms of not just volume, but also market share. We are at par with all global noodle companies, in terms of experience or standards.
Wai Wai leads the market in the Northeast and West Bengal, ahead of Maggi, Yippee and others. It is a strong challenger brand in states like Bihar, Uttar Pradesh, Uttarakhand and Himachal Pradesh. We have single digit share in the southern and western markets, which also happen to be the fastest growing ones (at 30-40 per cent).
"Only those flavours that are successful in Nepal, are introduced In India."
You have a fairly wide portfolio apart from the brown noodles, how are they performing? Also, are there any similarities with your offerings in Nepal?
The brown noodle is the best performing product and contributes to around 60 per cent of our revenues. White noodles contribute another 30 per cent, and are doing fairly well, particularly in the Hindi speaking belt, West and South India.
We don’t tweak the national-level product, but we introduce region-specific flavours from time to time. We had a fish flavour for West Bengal.
We have the most diversified noodle portfolio in all of South Asia, and haven’t even introduced all of our variants available in Nepal. We have variants like chicken curry, pizza, shrimp, chicken pizza, etc. Only those flavours that are successful in Nepal, are introduced In India.
"There has been a slowdown in consumption post-September (2020)."
COVID has had a negative impact on business. Are your expansion and launch plans still in place?
COVID caused a jump in the consumption of instant noodles. It did have a negative impact on operations, manufacturing, etc., but it was back on track, post-June. Since we already had our expansion plans in motion and our machineries, etc., had arrived at the premises before the lockdown, we could set it up quickly. We doubled our capacity in Purnia (Bihar).
We have launched some exotic sauces and will be entering certain other product segments that match our brand profile. We have a red chilli sauce, which is based on Bhut Jolokia from Assam. The green chilli sauce is based on the Jwala chilli from Gujarat. Similarly, the dark soya sauce will be closer to the original Japanese variant. We also have plans for relevant extensions, like poha and pasta.
But there has been a slowdown in consumption post-September (2020). It is probably because of inflationary pressure, or a dip in people’s income generating activities. The disposable income in the hands of the people has gone down. This is putting pressure on the consumption of FMCG products.