The

Story of

Maggi

Crisis

Way Ahead

A look at the past

What's bothering Nestle India at present?

What Nestle India has done and is currently doing?

What more does Nestle India need to do to get through?

A look at the past Nestlé, a subsidiary of Nestlé S.A. (Switzerland) formed its company in India and

set up its first factory in 1961 at Moga, Punjab.

Presently it is the world's largest and most diversified food company.

Maggi holds a commanding position in the Noodles Segment with over 60%

market share.

Maggi has a large fan following in the country and personalities such as Amitabh

Bachchan have endorsed it in the past.

What's bothering Nestle India at present?

Maggi one of Nestlé's most popular products has come under the scanner lately.

The UP Food Safety & Drug Administration recently carried out systematic raids on retail outlets of Nestle selling Maggi Noodles.

Testing in Government Laboratories in UP and Kolkata revealed that one of India’s favorite snacks had:- 7 times the permissible amount of MSG or monosodium glutamate otherwise

popularly known as Ajinomoto, a taste enhancer. Elemental lead has also been detected of up to 17.2 parts per million.

FDA officials seized more than 2 lakh packets of various quantities of Maggi Noodles.

FDA officials from other states have begun conducting similar raids and samples of the product have been sent for testing.

At present, FDA Uttar Pradesh has banned the product and there have been rumors that it might be banned across the country too.

What Nestle India has done and is currently doing?

•Issued a press statement on 21st May, which reassures consumers the brands commitment to quality.

•The Brand has a page “Meri Maggi” on Facebook and issued a similar statement through a post.

•The post received mixed reactions from followers, some defended the brand while others continued asking questions on the controversy.

•Interestingly some also raked up the controversial statements made by its Chairman on privatization of ‘Water’.

How is Nestle currently dealing with the situation?

@Maggi India twitter issued a similar tweet reassuring its commitment to consumers

Maggi India had embarked on a Khushiyon Ki Recipe or ‘Moms Maggi’

campaign prior and post Mothers Day on 10th May

Maggi has increased the ad spots post the crisis on several GEC’s such as Colors, Zee TV, Star Plus, Sony and SAB TV

These ads are visible across prime slots i.e. between 9pm - 11pm

What do consumers have to say?

What can Nestle India do in terms of crisis management?

Nestle India could look at roping in a brand ambassador to advocate their products

The ambassador or the celebrity should have high trust value amongst the audiences.

Coca-Cola & Cadbury roped in Amir Khan & Amitabh Bachchan respectively during their time of crisis.

Maggi has been in the market for years. They can reveal statistics of deaths due to Maggi over the past decade which would be none. Hence using numbers as a positive reinforcement.

Make necessary changes to the product & that adhere to the norms.

Cooperate with the FDA & redress the issue.

Build a campaign around Maggi being a health conscious brand through its latest wheat, oat & raggi noodles.

What can this mean for competition?

Maggi currently dominates its segment with 60% market share.

The current crisis can prove to be an immense window of opportunity for rival brands such as Ching’s.

It gives the chance to woo audiences without competing with the market leader.

They can use the situation as a chance to increase their visibility at retail markets & occupy racks that were previously dominated by Maggi.

They can possibly look at increasing their marketing budgets & media spends.

An opportunity to build relationships with audiences.

Conclusion

Nestle obviously cannot ignore the gravity of the situation they are in.

Maggi has lost the trust of many customers & rebuilding that trust will be a challenge for Nestle.

There is an immense window of opportunity for Maggi’s rival brands.

One can derive that the crisis will most certainly have an impact on Nestlé's revenue.