Mr. Tsutomu Yoshimura interviewed by Anurag More - FNB News

"Lower tax could bring more benefits"

About two-and-a-half years ago, Ajinomoto Co., Inc. and Toyo Suisan Kaisha, Ltd signed a joint venture agreement to establish instant noodle business company in India. The new company Maruchan Ajinomoto India Pvt Ltd is strengthening its India forays with Toyo Suisan supporting product development/production, and Ajinomoto Co., Inc. handling marketing (product planning/sales). Tsutomu Yoshimura, managing director, Maruchan Ajinomoto India Pvt. Ltd, offers a deeper insight into the company’s India plans as well as the challenges and solutions for the Indian market going forward in an email interaction with Anurag More.

How big is the noodles market in India?

Although a handful of different market data is available, we estimate that the market size of instant noodles in India should be roughly around 360 crore units (-70g/unit conversion).

What innovations are taking place in the Indian noodles market?

Nowadays innovation in both noodles ingredients and flavours can be seen in the Indian market. In noodle ingredients, the variation typically happens by using different flours such as atta and oats with flour. In seasoning mix for flavourings, the innovation occurs according to target customers such as introduction of plenty of spicy masala flavours to appeal to teens and young people, and the customised geography-specific flavours to suit the local regional taste. As far as cup instant noodles are concerned, the market is still very nascent in India.

How do you see the Indian market for noodles in the coming years?

What we have seen so far is that no too many authentic noodle recipes, especially noodles in soup broth, exist in India. For us, it is not only challenging, but also an interesting experience to experiment with more local flavour varients in the prevalent stir fry type of noodles. Although the noodle market in India may take a bit longer to evolve compared with Japan and other Asian countries, but the Indian customers preference over choosing new food varieties is changing rapidly, so we firmly believe that Indian noodles market is going to expand in the long run.

Do the flavours of noodles differ in India compared to those in Japan?

The flavours and recipes of Japanese noodles are totally different from Indian noodles. Even the spicy variation of Japanese noodles differs from the Indian ones. In Japan, usually the noodles are served in flavoured soup broth with toppings, but in India, the flavour or seasoning mix is marinated with the noodles itself. So the way of flavouring the noodles changes the taste. Being a staple food, Japanese noodles come in several forms based on use of flour such as Ramen, Yakisoba, Udon and Soba. There are plenty of soup broth flavours, such as Soy Sauce, Miso, Chicken, Pork, Fish Broth etc. In some cases, the broth comes in hot or cold variation.

How do you plan to compete with other players in the Indian market in this segment?

We have successfully introduced in India two varieties of instant noodles, namely unique Veggie Masala, which is originated from Japanese Yakisoba and Tasty Masala, which caters to those who have southern India tastes. For the time being, focussing on south Indian Market is the key strategy to expand our customer base. A lot of efforts are being made to manufacture products with global standards to provide safe and enjoyable products for the customers.

What are the key drivers and challenges for the noodles market in India?

India is ranked fifth in the world in total market size of instant noodles, followed by China, Indonesia, Japan and Vietnam in 2016. However, the per capita consumption of India is 32nd that is less than 4 units per capita. The unit per capita is just 1/10 of other Asian countries. It shows that big potential exists for the Indian market to grow in the future according to 2016, The World Ramen Association market data.

The reason behind very low per capita consumption may be due to lack of noodles eating culture in India. Introduced in India by Nestle in 1983, the instant noodle has only 34 years of history. Therefore we believe that there are more business opportunities for instant noodles manufacturers having expertise to create and launch varieties of products in the Indian market.

Of course, it is imperative that all manufacturers supply tasty and enjoyable products under strict management of safety and hygiene factories.

What are the market trends and developments that you have witnessed in India?

With no variants of flavours for quite a while, instant noodles category in India has been growing with variants of pack size, 4-pack, 6-pack, 8-pack etc. Recently, this category is moving towards right direction when the category leaders launched new products and also announced to introduce new products with fortified wheat flour, reducing 10% of sodium content from the current products. Those activities by market leaders will stimulate the category in better ways and the consumers will reap benefits of having more choices from different products.

How do you find the government policies on noodles?

We welcome the government policies and initiatives to protect consumers by setting up new safety and hygiene regulations not only for noodles category, other processed food, bottled and canned beverages but also restaurants and food and beverage stalls on every corner of streets.

What impact is GST likely to have on the noodles market in India?

We think that 18% or higher taxation on most processed foods is a little higher than other countries. If lower taxation applies on processed foods as well as instant noodles, it could bring more benefits to customers and increase consumption. As a result, we think the whole market may grow faster and could increase more tax income for the country.

Brief us about the products offered by Maruchan Ajinomoto in India. In order to provide flavourful and smooth texture, we offer flatter noodles in two different flavours. The one is very typical South Indian Tasty Masala and the other is Veggie Masala. Veggie Masala is originated of Japanese favourite sauce Yakisoba flavour arranged to fit Indian taste.

Do you plan to launch any new product in the near future?

We need to keep improving the products by seriously listening to customer’s voice and working continuously to meet customer’s needs. We would like to make the product better with the support of our valued customers in the long term.

What steps are being taken by Maruchan Ajinomoto for the distribution of the products?

We are focussing on traditional trade as well as modern trade by effectively using our direct sales teams to distribute the products to valuable customers. We also use distributors channel to take care of retailers who are located in outside of our direct reach.

Tell us about your manufacturing facility.

With over 40 years of successfully producing instant noodles in Japan and in the United States, we intend to bring those know how to Chennai. We also pay great attention to choose safe and quality ingredients supplied by carefully selected suppliers in order for us to provide high quality products. Our motto is not only producing safe and quality products but also bringing tasty and enjoyable products for our customers to make them smile.

Newspaper Article in The Hindu - Business Line

Japanese noodles with South Indian spices - Chennai firm ties up with Japanese noodle maker

CHENNAI, MAY 22: Chennai-based Japanese noodle maker Maruchan Ajinomoto India Pvt Ltd will use flavours that are hotter and spicier with a dash of Japanese punch to win over consumers in Tamil Nadu.

The company entered Tamil Nadu through joint venture partnership with Japanese noodle maker Toyo Suisan Kaisha and food seasoning maker Ajinomoto at an investment of ₹127 crore. It launched its two products under brand A&M in December 2016.

Market size: After their six-month journey in the state, the company leaders say they find Tamil Nadu full of potential and challenges. Currently, noodle market in India accounts for about 360 crore units and 90 per cent of the market is occupied by bigger players like Nestle and ITC. But the potential is huge, as per capita consumption in India is only four units, unlike in the US and Japan where per capita consumption is 14 and 49 respectively.

While India has more room to grow, it is riddled with as much challenges and more so in the company’s target market Tamil Nadu. Tsutomu Yoshimura, Managing Director, said, “Tamil Nadu is a very complex market.”

According to him, Tamil Nadu is largely traditional and acceptability of newer brands is lower than in the North. Additionally, negative image people have come to associate with noodles in recent times has made penetration even more difficult. “But I look at it positively. I think there is huge potential,” Yoshimura said. There are over 80 lakh people in Chennai with increasing number of working women looking for options to shorten cooking time. Millennial population, who are willing to try out new food products, is going up as well.

Given the positive trend for processed food, Yoshimura feels all that is needed is the right offering and flavours that cater to the local market. Though educating people will take more time, Yoshimura said, “We are in no hurry as we in for a long haul.”

Different quality: What makes A&M different? First is the differentiation in noodles type. Unlike the noodle available in the market, A&M noodles are flat and sturdy like the Japanese yakisoba noodles. Flatness absorbs the masala better, because of which the noodles are not soggy when cooked, said Atsushi Oda, Deputy Managing Director. Since Japanese are not used to spicy food, Yoshimura said their employees help with taste-testing to alter the taste to suit Tamil’s palette.

Yoshimura is very specific when he says ‘Tamil palette’. He said, “In India, each state is like a different country.” What works in Tamil Nadu may not work for Karnataka or Andhra Pradesh. “So when we say localise, we mean it,” he added. That is why the company is in no hurry to branch out of Tamil Nadu.

The products are available in Chennai, Coimbatore, Salem, Tiruchi and Madurai through Ajinomoto’s distribution channel at a total of 15,000 outlets. The focus is mostly on kirana stores as almost 90 per cent of noodles sale come from them, Yoshimura said. The company plans to enter into cup noodle and soupy noodle category and non-vegetarian noodle variety in coming years.

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