Capital Foods’s brand Chings’s Secret exits noodles market
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Consumer goods company Capital Foods, which sells the Ching’s Secret instant noodles and Smith & Jones ketchup and masala noodles, has officially exited the noodles category post the Nestle Maggi controvery. The company says it had a marginal contribution from the noodles category to its total business and will restrict its focus to soups and sauces. The company has also shut down its Vapi plant which manufactured noodles.
The company’s founder chairman and managing director, Ajaay Guptal told ET that the controversy had affected the growth prospects of the category. ” It has never been a focus business and we decided to shut down our factory. As far as our pedigree is concerned, we started off as an exports company and out backend meets the strictest guidelines and laws laid down by global markets, especially the US government.
The Maggi controversy has impacted the entire processed foods industry significantly especially the ready to eat food category. All food companies are reworking their packaging and ingredients to make sure it meets the strictest mandatory laws.
Very recently Hindustan Unilever (HUL) had recalled its Chinese range of ‘Knorr’ instant noodles from the market pending product approval from the central food safety regulator FSSAI. “HUL has decided to stop production and sale of its Chinese range of instant noodles till such time as its application is approved by FSSAI. HUL is initiating a withdrawal of its Chinese instant noodles from the market,” HUL had stated.
Capital Foods sells Ching’s brand and Smith & Jones range of ketchups and ginger-garlic paste in markets such as the US, Canada, Singapore and Dubai. Capital foods recently hired Bollywood actor Ranveer Singh as the brand ambassador, with a campaign ‘My Name is Ranveer Ching’.
It has tie-ups with the large retailers such as Tesco, Loblaw, and Mustafa in Singapore.
ITC’s Sunfeast Yippee, HUL’s Knorr and Nissin Foods’ Top Ramen categories are very nascent, so other players are growing the market instead of biting into each other’s share. Capital Foods’ (it has two brands Smith-Jones and Ching’s Secret) consolidated revenue for the fiscal year 2014 stood at Rs 240 crore of which Ching’s Secret contributed a whopping Rs 200 crore.
Questions & Answers
Q.What is the primary reason Capital Foods has stopped selling instant noodles?
What is the primary reason Capital Foods has stopped selling instant noodles?
The company stated the Nestle Maggi controversy affected the growth prospects of the category. It was never a focus business for them, and they decided to shut down their factory and exit the market.
Q.What other products will Capital Foods now focus on?
What other products will Capital Foods now focus on?
Capital Foods will now restrict its focus to soups and sauces. They also sell Ching’s brand and Smith & Jones range of ketchups and ginger-garlic paste.
Q.Was the noodles category a significant part of Capital Foods' overall revenue?
Was the noodles category a significant part of Capital Foods' overall revenue?
No, the company says it had only a marginal contribution from the noodles category to its total business. In fiscal year 2014, Ching's Secret contributed Rs 200 crore to the consolidated revenue of Rs 240 crore, but this includes other products.