Korean Is The Hottest Trend In India's Noodles Market, But FMCGs Aren't Banking On It For Growth

Indo Nissin Foods Private Limited, the Indian subsidiary of Japanese noodle maker Nissin Group, has been making instant noodles in India for the past 36 years. Their popular products have been Cup Noodles and Top Ramen. While these products remain their mainstay, Indo Nissin has now launched Geki, their version of Korean instant noodles.

With Korean TV dramas and K-pop, a music genre, gaining traction in India since the early 2020s, the company figured that it was the right time to jump into the Korean instant noodles space. 

“The masala instant noodles category is a very saturated one… which is Yippie, Maggi and us, (and it) has not been growing very fast for the past two to three years. It took leaps and bounds during the pandemic because people were at home. After that, growth is not that high,” Sandeep Bakhshi, managing director of Indo Nissin Private Limited told The Core.

Indo Nissin reasoned that it might be better to hew its own path with Korean noodles rather than "fighting with these two giants” in a narrow product lane.

While Nestle makes Maggi, Yippie is an ITC brand. And Korean instant noodles were the forte of imported brands. Indian FMCG companies are now looking to diversify into Korean noodles for two reasons. One, the masala noodles market is saturated and leaves little room for new players or fresh growth. Two, those who buy Korean noodles, which are much more expensive than regular Indian noodles, are willing spenders, which means there is an opportunity to experiment. 

Noodle Hallyu

Go to any supermarket today, and you’ll find a mix of Korean flavours on the shelves, imported as well as locally made. Geki’s packet noodles come in four flavours, and the cup noodle version comes in two. 

The September 2023 FMCG Pulse report by market intelligence firm Kantar said that the penetration of Korean noodles had jumped from 2% in July 2020 to 5.7% in July 2023. According to Mintel Global New Products Database (GNPD), 53% of Indian consumers say they are willing to pay more for instant noodles that come in new flavours.

“Nobody wants to buy another masala noodles brand,” Sidhanth Madan, co-founder of Pan-Asian food brand Masterchow told The Core. While the brand already had a Korean sauce, a bestseller in the category, the brand launched Korean cup noodles in 2022.

South Korean brands like Nongshim, with its Shin Ramyun range of instant noodles, and Samyang, with Samyang and Buldak range of ramen, were the largest players in this market. However, they were prominently sold on e-commerce platforms and had pockets of growth in a few metro cities. 

Of late, imported as well as locally produced brands like Indo Nissin’s Geki have seen an increase in demand. This has gotten fast-moving consumer goods (FMCG) majors to look at Korean noodles as an important market.

FMCG majors like Nestle and Hindustan Unilever began to explore the Korean noodles market late last year. Nestle launched a Korean BBQ noodle variant in vegetarian for Rs 55 and chicken for Rs 60, while HUL brand Knorr launched a Korean Meal Pot in two flavours as well at Rs 300. 

What Are Nestle, HUL Doing Here?

While imported products are banking on the authenticity of their products’ taste, FMCG companies are hoping their distribution network will do the magic. The customer base is also clearly defined because of the wide price difference between imported Korean ramen and Korean noodles made by traditional noodle makers like Nestle and ITC. 

Aseem Asrani of Suresh Kumar & Co, which imports Samyang’s Korean noodles in northern India, said that while the flavours of the two instant noodles may be similar, he doesn’t see these two products in competition with each other.

The consumers of the imported brands are already familiar with the product and taste and are willing to shell out more money for authenticity. Those picking up products made by the mass brands are experimenting out of curiosity.

“Those who are buying the Rs 150 packet know what they are buying. And it is a pack of 5. So they just don't buy Rs 150 packets, they are buying a Rs 750 pack of five. They are not experimenting,” Asrani told The Core. “They (FMCG majors) will have to Indianise it and make it less spicy, according to what will appeal to the mass market.”

Maggi has launched two Korean flavours — Korean BBQ Veg and Korean BBQ Chicken. Madan believes that while this may be to expand its offerings and cash in on this trend, smaller brands have an opportunity here. “Unfortunately for them, Maggi, for example, the masala variant is 95% of their revenue. And Korean (flavours) will never get as big as Maggi. So, it ends up getting ignored. That's why there's an opportunity for brands like ours,” he said, “There's no one to give strong competition to a Nongshim or Samyang. Because no one's focused on that core SKU. That's where our thought process is.”

There is unlikely to be product impact with Maggi entering, according to Bakhshi, “as Geki has the first mover advantage in the korean noodles category.” However, Maggi will still likely see the product sell because of their existing distribution network. According to consumer intelligence firm NielsenIQ Maggi has already chalked up 17% of the Korean instant noodles market share, next only to Indo Nissin’s Geki. 

A few distributors The Core spoke to said that the response for the Korean variant of Maggi was “good” but did not offer any specifics.

Where Do Imported Brands See This Going?

According to NielsenIQ, the Korean noodles market in India saw substantial growth, growing from Rs 2 crore in 2021 to over Rs 65 crore in 2023. 

“In the last year that we have started doing it (importing Samyang instant noodles), the sales have at least doubled. They are expecting the sales to double every year,” Asrani said. Nongshim launched two exclusive flavours for the Indian market in September last year. 

However, neither of these brands is manufactured locally. “Maybe if the volume goes up that much, it makes total sense if they (Samyang) start producing in India,” Asrani said.

The major barrier to their growth was the higher price point. The imported variants of Korean noodles in India are priced in the range of Rs 100 to Rs 150. Compare that to the masala instant noodles variants that cost somewhere between Rs 10 and Rs 15 a pack. 

A Nongshim instant noodle packet is priced at Rs 129 for a 120 gms packet, putting its per gram cost at Rs 1.075. In comparison, a traditional 70 gms Maggi masala instant noodle packet is priced at Rs 13, costing Rs 0.185 per gm

Is Korean Cuisine Here to Stay?

Small brands and FMCG majors alike are investing in Korean instant noodles hoping that the category will expand just the way the East Asian country’s film and music exports became popular in India. 

Madan said that if his brand had to diversify, they wouldn’t put all their bets on just Korean noodles, but it would only be part of the strategy. “If we're developing 20 SKUs in tandem, five are Korean. So, 25% of our bandwidth is going towards Korean food.”

For many brands, Korean noodles is one of their core products today as the market demands it, but it may not be in the coming years. Brands often discontinue products depending on the business they bring. 

Bakhshi believes that Korean noodles will keep finding a place on store shelves till another flavour takes over. He said that while it could happen in the next five year, it was unlikely to happen in the short term. 

Editor's Note:  Some parts of this article have been changed upon a source’s request.

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