Noodle makers vary strategies, expand operations as competition thickens

As the competition for market share gets tougher, noodle makers are equally changing tactics while expanding operations to meet growing consumers tastes.

Currently, the dominant player in the industry is De-United Foods Industries Limited, producer of Indomie noodles, estimated by Eurominitor International to have about 71 percent market share. Industry analysts say much of the young generation who are the main consumers still regard other noodle products as Indomie as the company benefits from a strong brand name, having been in the country’s market for about 21 years.

However, the firm has refused to rest on its oars knowing full well the threat of competitors such as Honeywell Flour Mills (Honeywell noodles); Dangote Noodles Limited (Dangote noodles), Golden Noodles Nigeria Limited (Golden Penny noodles), May & Baker Nigeria plc (Mimee noodles); Tummy-Tummy Foods Industries Limited (Tummy-Tummy noodles), Chikki Food Industries Limited (Chikki noodles), the new entrant Doyin Investments Limited (Doyin noodles), among others.

De-United, which was a main importer of noodles by 1988, has expanded to six factories, located in Otta, Ogun State; Kachia, Kaduna; Port Harcourt, among others. Rather than import raw materials like flour or cereals, the firm has adopted backward integration, resulting in sourcing 95 percent of its raw materials locally, mainly flour and cereals.

Deepak Singhal, CEO, De-United, stated in an interview with BusinessDay last year that his firm produced 200,000 tons per annum, generating $400 million yearly while employing between 2000 and 3000 workers, and the company earned $50 million from exports yearly.

Findings have shown that Indomie has gone beyond the African market to Europe and the United States of America, appealing to Nigerians of different age groups abroad.

One of the stand-out features of Indomie is strong salty taste of its seasoning chicken flavour as well as distinguishing features on the packs, which provide sufficient information for the health-conscious consumer. The pack has nutrition information and product price boldly written on it. Apart from smaller packs, consumers with larger families have the choice to buy the 120 gram Super Pack or the 450 gram Chicken Family Pack.

If De-United feels it is a good advertiser, then it must watch Honeywell, whose products are well-packaged in four different colours – yellow, brown, blue and green, with each having a different variant/taste such as chicken flavour, curry chicken flavour, onion chicken flavour and seafood flavour, tucked in either 70 gram or 120 gram packs.

The aesthetics in the packaging is a great appeal to Nigerian children of one to 14 years whose population is estimated at 43.8 percent (CIA World Factbook).

Dangote Noodles are also packaged in green packs, while the firm has since 2008 of creation in Lagos expanded operations to Cross River and Kano. As variety is the spice of life, Dangote Noodles has variants such as Instant, Ready to Eat, Snack and Snappy Pop to satisfy different age groups. According to the company, its plants’ capacity is 10 tons per hour, while 80 percent of raw material is wheat flour.

Moreover, 95 percent of these all raw materials are locally sourced, adopting technology transfer from expatriate to local staff through on-the-job training.

Golden Penny Noodles have a very strong appeal to children and adults. Its seasoning flavour is as strong as Indomie, though with a slight distinction. With its yellow, green and red packs, the noodles are sticky, non soggy and price sensitive. Being part of Flour Mills of Nigeria, it is gaining its market share through strong advertising and promotion. High quality wheat flour, its primary ingredient, determines the colour, texture and quality of the final product, while the protein content and 70 gram, 100 gram and 150 gram packs put them in good stead.

Mimee has a different aroma that mostly appeals to children. Its chilli pepper powder seasoning is a stand-out feature, while variants of onion chicken (70 gram); hot and spicy (70 gram), crunchme vanilla flavour, strawberry flavour and boompa chicken, all packed in different colours are gaining gradual entry into the various parts of the country.

Tummy-Tummy Instant Noodles manufactured in Nnewi, Anambra State, is gaining wide acceptance in the South East part of the country, opening new production lines with installed capacity of 45,000 cartons per day.

Owned by the Cotech Nigerian Group alongside Chinese technical partners, the company has added vegetables and seafood seasoning on its noodle products, coming with blue and yellow colours.

“The competition is local. We have diversified to noodles and are yet to meet our market share,’’ according to Chijioke Anumoka of Tummy-Tummy Foods Industries Limited, in an interview with BusinessDay.

While Doyin is just a new entrant, Chikki is indeed popular among Nigerian youths and children. The firm has top manufacturing facilities that have been commended by local and international standardisation corporations. But it must keep up expansion if it must gain larger market share, say analysts.

Like other packaged foods sub-sectors, the noodles industry has continued to rise on the back of Nigeria’s 174 million population, over 70 percent youthful population as well as increase in formal employment which drives the need for convenient-based eating.

Though regarded by health experts as ‘junk food,’ noodles remain a convenient and quick way of eating as they meet the demands of time-stressed working people, including working parents, whose children are key consumers. But consumers are still watching out for innovations and a taste that will beat what they currently have.

Odinaka Anudu