After Nestle, ITC's Yippee Noodles Makes A Comeback In Popular Rs 10 Pack

Days after Nestle, ITC Ltd.’s instant noodles brand Sunfeast Yippee is making a major comeback at the Rs 10 price point in a bid to ward off competition and gain market share, especially in smaller towns and villages.

The packaged goods maker has unveiled a new variant—YiPPee! Wow Masala Noodles—priced at Rs 10 for a 50 gm packet. ITC’s flagship Magic Masala variant is priced at Rs 12 for a 55 gm packet. Like most companies, ITC raised the price of its noodles to account for rising raw material costs.

"Our flagship Magic Masala variant continues to be our key growth driver since launch," Suresh Chand, vice president and head of marketing for snacks, noodles and pasta at ITC Foods, said in a statement on Monday.

"However, with YiPPee! Wow Masala, we are looking to satiate consumers with a differentiated and delicious flavour of instant noodles."

The Rs 40,000 crore instant noodles market is dominated by Nestle India Ltd.'s Maggi. ITC is the second-largest player in the instant noodles segment, with a market share of 25%, after Nestle, which has a 55% share. Hindustan Unilever Ltd.'s Knorr, Nissin Foods, and CG Corp Global's Wai Wai brand are among the big names looking to be significant players in the segment. Patanjali Ayurved Ltd. is also in the market with its atta noodles.

ITC's latest launch comes closely after the market leader introduced a new variant of Maggi noodles for Rs 10. It also coincides with rising competition from regional players who are eating into the market shares of big companies. To be sure, the Rs 10 price point draws big numbers for packaged goods makers. This is true not just for the food category but also for non-food categories like shampoo.

The 12-month rolling sales or moving annual total of Rs 10 packs rose 6% in August as compared with 5% growth for Rs 20 packs, according to data shared by Kantar Worldpanel. It further pointed out that while the growth of Rs 5 packs has decelerated, it remains a popular price point, generating about 32% of all food category volume.

"Price-point packs are extremely important to a product mix," according to K Ramakrishnan, managing director-South Asia at Kantar Worldpanel.

"The Rs 20 pack has seen steady growth over the last couple of years; however, it's far from being as popular as Rs 5 or Rs 10 yet."

The low-unit pack size is the dominant route to consumers in rural markets," according to Nitin Gupta of Emkay Global.

Smaller local peers have emerged stronger as the effect of the Covid-19 pandemic wanes and inflation cools. Taking advantage of a drop in prices of some raw materials used in the consumer goods sector, including milk and barley, they were competing with deeper-pocketed giants such as ITC and Hindustan Unilever.

HUL, for instance, has come on record to say that it lost some market share in its mass segment, comprising lower-priced products, due to competition. Over the 12-month period ending April, the volume growth of local brands has surpassed that of national brands significantly, according to researcher Kantar. The latest move by the noodle maker is likely to help the company keep local competition at bay.