Another year, another big Nissin move. Following joint ventures with the Turkish conglomerate Yildiz Holding and Kenyan JKUT University in 2013, Nissin is now eyeing the Maghreb. The Japanese noodle giant recently announced plans to introduce instant noodles into Morocco, Algeria and Tunisia through the establishment of a local subsidiary. Given the declining population and stagnant economy in Japan, it comes as no great surprise that Nissin is looking for growth abroad. With a combination of rising incomes, buoyant populations and steady demand for wheat, the Middle East and North Africa (MENA) should be a boom area for noodles. However, MENA, which boasts the highest noodles growth globally is also the region with one of the lowest consumption levels. If Nissin wants to rejuvenate its sales by reaching out to MENA, it first needs to convince the Maghrebis that they should slurp Japanese noodles instead of continuing to spoon couscous.
Foodservice is the Way Forward
The Maghreb’s per capita consumption of noodles stood at 35g in 2013, one of the lowest figures globally. In Algeria, sales of noodles remain insignificant, with consumption mainly driven by Chinese expatriates whose numbers are rising due to the region’s construction boom. Moroccan noodle sales are limited to niche supermarkets located in cities. Tunisia has a relatively more developed noodles market, with several brands, a variety of flavours and sales that go beyond the confines of the modern grocery channel. The main driver of growth in Tunisia is the recent surge in Asian restaurants, where noodles feature heavily on menus. This trend is not unique to Tunisia. The foodservice channel has been instrumental in building consumer awareness of noodles in Brazil, too. Nissin’s “Cup Noodles” kiosks are increasingly featuring in São Paulo’s tube stations with noticeable spillovers to the retail channel. Noodle retail sales in Brazil increased at a remarkable 12% value CAGR over the last five years, driven by Nissin, which commands half of the Brazilian noodles market, making the country Nissin’s second largest market, just behind Japan. In order to familiarise Algerian and Moroccan consumers with noodles, Nissin may explore a similar strategy in the Maghreb. Kiosks may prove unpopular in nations which are famous for their café culture however. Setting up Japanese/Asian style cafés or fast-food outlets may attract a growing number of middle-class Algerians, Moroccans and Tunisians who like to eat and shop at high-street stores.
Cup Noodles Kiosk in São Paulo, Brazil
Source: Euromonitor International
Another option that Nissin can look into is pasta. Consumers in the Maghreb are already familiar with pasta, which is similar to noodles. Both are based on wheat, cheap to buy and easy to prepare. In addition, both pasta and noodles can easily be combined with sauces and condiments that cater to local consumer tastes. Noodles may, therefore, be marketed as an easy and convenient form of pasta. In fact, this is exactly what Nissin’s Turkish ally did. Yildiz Holding branded its instant noodles as MakarNeks, short for Makarna-Ekspres, which translates as express pasta. Being slightly thicker than Japanese noodles, MakarNeks was first launched in chilli tomato (a popular local sauce) flavour, which proved very successful in the first few months following its launch. Nissin could emulate MakarNeks’ success by introducing noodles with well-known local spices or sauces, such as harissa (a hot chilli pepper paste), merguez (a beef-based spicy sausage) or chilli powder.
With a rapidly expanding population of about 80 million and growing incomes, the Maghreb is a region that no company can afford to ignore, less Nissin. However, it is also a region where tradition looms large and consumers remain loyal to and proud of their local food. Couscous and pasta are likely to continue to take precedence in Maghrebi’s diet. Currently, noodles are largely a middle-class food consumed in affluent cities. However, if marketed as an affordable foodservice item with an appealing name and taste, noodles may not actually manage to topple couscous but they could become a popular alternative to pasta.