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Maggi Case study: The 2015 Maggi crisis

If you’re reading this, we’re sure in your lifetime you would’ve had a pleasure of sparing those controversial two minutes to cook a Maggi and another few to eat it. We’ll never know how those advertisements manage to cook their Maggi in two minutes. Anyway, we’re not here to question the two-minute proposition of our most loved Noodle brand and rather to discuss a controversy that happened in 2015. Which has become the famous Maggi case study, a case study that teaches you how to emotionally connect well with your consumer.

Before you learn about the controversy – here’s a quick intro to the brand: Maggi was introduced in India by a Global FMCG company called Nestlé in 1982 and over this time, until 2015 the brand captured 60% of the noodle market in India . Maggi was in every nook of the country, this was because of how affordable, portable and instant these noodles are.

However, as all good things come to an end. Maggi faced a temporary ban in 2015, here’s the entire story for you (This post has a lot of videos, we’d recommend you at least watch the last few ones).

FSSAI is not very well known for surprise food inspections, however, April 2015 was different.  FSSAI conducted a surprise Inspection for testing any possible food adulteration issue on Maggi’s manufacturing unit in the Barabanki district of Uttar Pradesh. The tested samples were sent to FSSAI labs and reports of higher than permissible levels of lead and the presence of Monosodium Glutamate(MSG) was released, these substances are banned to use for consumable products.

Naturally, Nestlé India Limited (NIL) appealed against the report and said MSG was a result of natural processes (it’s also mentioned on their website) and requested re-inspection of the products in the unit. Following this appeal, samples were sent to a government-authorized lab in Kolkata which only supported the findings of state FSSAI laboratory.

These reports led to several states banning sale and use of Maggi, obviously because of the health concerns. And unfortunately, on 9 th June, 2015, FSSAI (Food Safety and Standards Authority of India) i.e. the food regulator in India put a nationwide ban on sale on Maggi noodles for 5 months. Owing to this nationwide ban Nestlé recalled all the Maggi products from all the outlets and emotionally promised that they’ll be back in market as soon as the lab reports were clear. Almost 38,000 tonnes of Maggi was destroyed by Nestlé which worth Rs.320 crore.

Impacts of the ban:

The then brand Ambassadors of Maggi – Amitabh Bachchan, Preity Zinta, and Madhuri Dixit were slammed for endorsing the brand. Criminal cases were filed against them – yep, no joke. See here . Competitors: Top Ramen, Yippie, Patanjali Noodles started marketing their noodles healthy – we guess fats were not really unhealthy back then. Well, we can’t really blame them, 60% of the Market was now open for them to capture.

Things went south when the Government filed a case against Nestlé and charged Rs.640 crore for damages – Yikes! Nestlé posted its first loss in 17 years after the Maggi was banned. But worse, the consumers were now losing their trust in Maggi. Yep, FSSAI and the Government is all serious when it comes to your health – but the story wasn’t over yet.

And, the Return:

Surprisingly even when the Maggi was banned, it really wasn’t ready to give up on its consumers. The brand had an active social media page through which it stayed connected to its audience by the way of various social media posts and advertisements. Even on their Facebook page , they kept posting that their (consumers’) favorite food will be safe to consume very soon. There was a loyal set of customers that believed in Maggi and would occasionally post on their social media about how much they wanted their favorite noodles to return. Responding to them Maggi ran a campaign showcasing how they were missing their customers as well. They also created helpline numbers and FAQ pages for customers’ related queries.

In August 2015, the ban was lifted by the Bombay High court on the condition that it will be relaunched only after the reports are cleared by the FSSAI. And, in November 2015, when Nestlé got a nod from the food regulatory authority of India (FSSAI), it launched its WELCOME BACK campaign – an emotional campaign that won the heart of its consumers. They even launched 15 new variations of Maggi. They teamed up with e-commerce giants and started selling welcome kits which contained 12 Maggi packs. The response was great, the then e-commerce company Snapdeal sold 60,000 Maggi kits in just 5 minutes after the launch.

Learning from the Maggi case study:

All in all, this teaches at all that matters in end is the emotional connection you have with your customers. Unfortunately for Maggi’s competitors, they really did not achieve a lot during the ban. Maggi captured over 60% again in the next two years to come. And, this was the story of the crisis our favorite noodles faced – we hoped we killed it. You can write to us if you’d like any improvements.

Read more here . Stay safe, have a good one! Take a look at our page here for more case studies .

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4 thoughts on “ maggi case study: the 2015 maggi crisis ”.

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Very good and informative site thankyou for collecting valuable information…

I was really curious to know about what happened back in 2015, after my friend told me that Maggi was banned, the site helped me find the entire information about it.

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From Crisis to Comeback: Maggi Crisis Management Case Study

Have you ever wondered how a beloved brand like Maggi navigated through a major crisis and managed to salvage its reputation? 

In this blog post, we will delve into the fascinating case study of Maggi’s crisis management. 

From the emergence of health concerns surrounding its popular noodles to government bans and consumer backlash, Maggi faced a daunting challenge. 

However, through strategic crisis management approaches, the brand not only survived but also thrived. 

Join us as we examine the key strategies employed by Maggi, evaluate their effectiveness, and draw valuable lessons from this compelling case study.

Let’s learn through reading Maggi crisis management case study

Brief history and popularity of Maggi

Maggi, a brand of instant noodles and food products, has a rich history that spans over a century. It was first introduced in 1884 by Julius Maggi, a Swiss entrepreneur, as a solution to provide affordable and nutritious meals to the working class. Maggi quickly gained popularity due to its convenience and flavor-enhancing properties.

Over the years, Maggi expanded its product range to include various food items such as soups, sauces, bouillons, and noodles. The brand’s instant noodles, in particular, became a household name across many countries, cherished for their quick preparation time and delicious taste.

Maggi’s popularity soared globally, with a presence in over 90 countries. It became synonymous with quick and easy meals, often considered a go-to option for busy individuals and families. Its widespread appeal and loyal consumer base cemented Maggi’s position as a leading food brand in the international market.

However, the brand’s stellar reputation and popularity would soon face a severe test when it encountered a crisis that shook consumer confidence and forced Maggi to reevaluate its crisis management strategies.

The Crisis

In 2015, Maggi faced a significant crisis that cast doubts on the safety and quality of its beloved noodles. It all began when the Food Safety and Standards Authority of India (FSSAI) conducted tests on Maggi noodles and found elevated levels of lead and monosodium glutamate (MSG), a flavor enhancer, beyond the permissible limits.

The test results sparked widespread concerns about the potential health hazards associated with consuming Maggi noodles. Lead is a heavy metal that, when ingested in excessive amounts, can cause severe health problems, especially in children. 

MSG, on the other hand, had been a subject of controversy for its alleged negative health effects, including headaches and allergic reactions.

The news of the test results spread like wildfire , causing a wave of panic among consumers. Social media platforms amplified the concerns, and soon there was a massive backlash against Maggi. 

Consumers began boycotting the brand, demanding action from regulatory authorities to safeguard their health.

The crisis escalated when several Indian states imposed bans on Maggi noodles, and the product was swiftly removed from store shelves. The brand’s reputation, carefully built over decades, was suddenly under threat, and Nestlé, the parent company of Maggi, faced a critical challenge in managing this crisis effectively.

The health concerns surrounding Maggi noodles not only posed a threat to public health but also raised questions about Nestlé’s commitment to product safety and quality. To regain trust and restore its reputation, Maggi needed a robust crisis management approach that could address the concerns of both consumers and regulatory authorities.

Government bans and consumer backlash

The health concerns surrounding Maggi noodles led to swift action by governmental authorities in various countries. In India, where Maggi had an immense presence, several state governments imposed a ban on the sale and production of Maggi noodles. 

The bans were based on the test results that showed elevated levels of lead and MSG, raising concerns about public health and safety.

The government bans added fuel to the already raging fire of consumer backlash. Consumers felt betrayed and deceived by a brand they had trusted for years. Social media platforms became a battleground for expressing outrage and sharing personal experiences, further tarnishing Maggi’s reputation.

Hashtags like #BoycottMaggi trended, and consumers actively participated in online discussions, spreading negative sentiments and urging others to boycott the brand.

The consumer backlash extended beyond social media. Protests and demonstrations were organized in various cities, with consumers disposing of Maggi noodles publicly to show their discontent. The crisis hit Maggi hard, resulting in a significant decline in sales and a loss of market share.

Impact on Nestlé and Maggi’s reputation

The crisis surrounding Maggi had a profound impact on both Nestlé and the brand’s reputation. Nestlé, as the parent company, faced significant challenges in managing the crisis and protecting its overall corporate image.

The incident not only raised questions about Maggi’s product safety and quality but also put a spotlight on Nestlé’s commitment to consumer welfare. The fact that elevated levels of lead and MSG were found in Maggi noodles brought into question the effectiveness of Nestlé’s quality control processes and regulatory compliance.

The impact on Maggi’s reputation was equally significant. The brand went from being a household favorite to being associated with health concerns and regulatory violations. The once-trusted brand became a symbol of mistrust and betrayal in the eyes of consumers.

Maggi’s image as a convenient and reliable food choice was severely tarnished. The crisis highlighted the need for Maggi to not only address the immediate concerns regarding product safety but also rebuild its reputation from the ground up.

The success of their crisis management efforts would determine whether Maggi could regain consumer trust and restore its position in the market.

Crisis Management Strategies Employed by Maggi

Following are the key aspects of Maggi crisis management strategy that were employed by Maggi to reclaim customers’ trust and restore its brand’s reputation.

Prompt response and acknowledgement of the crisis

One of the key crisis management strategies employed by Maggi was a prompt response and acknowledgement of the crisis. Recognizing the gravity of the situation, Maggi did not shy away from addressing the issue head-on.

As soon as the test results and the subsequent bans were announced, Maggi swiftly issued public statements acknowledging the concerns raised and expressing its commitment to consumer safety. The brand took responsibility for the situation and assured consumers that they were taking the matter seriously.

Maggi’s prompt response also allowed the brand to take control of the narrative to some extent. By proactively communicating about the crisis, Maggi aimed to prevent misinformation from spreading and mitigate further damage to its reputation. This approach helped Maggi set the stage for subsequent crisis management efforts.

Open communication channels with stakeholders

To address consumer concerns and keep them informed, Maggi utilized multiple communication channels. The brand set up dedicated helplines and email addresses to receive queries and feedback from consumers.

Social media platforms were actively monitored, allowing Maggi to respond promptly to consumer inquiries and complaints. Through these channels, Maggi provided regular updates on the steps being taken to address the crisis, assuring consumers of their commitment to resolving the issue.

Maggi also prioritized open communication with its distributors and retailers. The brand ensured that they were well-informed about the situation and provided them with guidance on how to handle consumer queries and concerns.

Furthermore, Maggi actively engaged with the media, providing regular press releases and participating in interviews to keep the public informed about the progress made in addressing the crisis. This helped to shape the narrative surrounding the brand and countered negative publicity.

Collaboration with regulatory authorities

Maggi understood that working closely with regulatory bodies was essential to rebuild trust and ensure compliance with safety standards. The brand cooperated fully with investigations, providing necessary information, test results, and documentation to the regulatory authorities. This collaboration helped demonstrate Maggi’s commitment to addressing the issues raised and working in alignment with the regulatory framework.

By actively involving regulatory authorities in the crisis management process, Maggi showcased its willingness to comply with regulations and prioritize consumer safety. This collaborative approach fostered a sense of shared responsibility between Maggi and the regulatory bodies, leading to a more constructive and effective resolution of the crisis.

Additionally, Maggi sought guidance and recommendations from the regulatory authorities on implementing appropriate measures to address the concerns. The brand worked closely with the authorities to establish revised quality control protocols and testing procedures to ensure the safety and compliance of its products. This collaboration not only helped in resolving the immediate crisis but also set the foundation for a more robust and transparent system moving forward.

Product recall and quality assurance measures

Firstly, Maggi initiated a voluntary recall of its noodles from the market. This proactive step demonstrated the brand’s commitment to consumer safety and its willingness to take immediate action to address the issue.

The product recall was a significant undertaking, involving the retrieval and removal of Maggi noodles from store shelves across affected regions. By recalling the products, Maggi aimed to prevent further consumption and potential harm to consumers.

Simultaneously, Maggi implemented rigorous quality assurance measures to ensure the safety and compliance of its products. The brand conducted extensive testing of its noodles, not only for lead and MSG but also for other potential contaminants.

Maggi worked with reputable laboratories to conduct these tests and set stringent internal standards for acceptable levels of contaminants. This commitment to quality assurance aimed to rebuild consumer confidence by assuring them of the safety and integrity of Maggi products.

Public relations and brand rebuilding efforts

To regain consumer trust, Maggi launched a robust public relations campaign. The brand actively engaged with the media to share updates on the progress made in addressing the crisis. This included press releases, interviews, and statements from company representatives.

Maggi used these opportunities to emphasize its commitment to consumer safety, the measures taken to rectify the situation, and the steps implemented to prevent similar issues in the future. The goal was to rebuild credibility by being transparent and proactive in its communication with the public.

Maggi also leveraged social media platforms and its website to communicate directly with consumers. The brand shared information about the product recall, quality control measures, and safety protocols implemented. Maggi encouraged open dialogue, addressing consumer queries, concerns, and complaints promptly and empathetically.

Additionally, Maggi launched targeted marketing campaigns focused on re-establishing its image as a trusted and reliable brand. These campaigns highlighted the brand’s heritage, quality standards, and rigorous testing processes. Maggi emphasized its commitment to providing safe and nutritious food options for consumers, focusing on the steps taken to regain their trust.

To reinforce its commitment to quality, Maggi also partnered with renowned nutritionists and health experts to endorse the brand and vouch for its safety. These collaborations aimed to rebuild credibility by associating Maggi with authoritative voices in the field of nutrition and food safety.

Lessons Learned from Maggi’s Crisis Management 

Following are the important lessons that serve as valuable guidelines to navigate and mitigate the impact of crises effectively, protecting the reputation and long-term success of the organization.

A. Importance of proactive crisis preparedness

Maggi’s crisis highlighted the importance of being prepared for potential crises before they occur. By having proactive crisis management strategies in place, organizations can respond swiftly and effectively when faced with unexpected challenges. This includes having a crisis management team, conducting risk assessments, and developing response plans that outline steps to be taken in different scenarios. Being prepared enables organizations to mitigate damage, maintain control of the narrative, and protect their reputation.

B. Effective communication as a key component of crisis management

Maggi’s crisis underscored the critical role of effective communication during a crisis. Prompt and transparent communication with stakeholders, including consumers, government authorities, distributors, and the media, is crucial in managing a crisis. Open channels of communication help address concerns, provide accurate information, and demonstrate a commitment to transparency and accountability. Clear and consistent messaging helps regain trust, counter misinformation, and shape the narrative surrounding the brand.

C. Collaborative approach with regulatory bodies

Maggi’s collaboration with regulatory authorities proved to be essential in managing the crisis. Working closely with regulatory bodies demonstrates a commitment to compliance and consumer safety. By actively involving regulatory authorities, organizations can benefit from their expertise, guidance, and support in resolving the crisis effectively. Collaboration fosters trust, enables a unified approach, and helps establish long-term regulatory compliance standards.

D. Building and maintaining brand trust and credibility

Maggi’s crisis highlighted the significance of brand trust and credibility. Building a strong reputation based on consistent quality, transparency, and consumer satisfaction is crucial in weathering a crisis. Organizations must prioritize maintaining trust by delivering on their brand promises, adhering to safety and quality standards, and being responsive to consumer concerns. Cultivating brand loyalty and credibility beforehand helps in times of crisis, as consumers are more likely to give the benefit of the doubt and remain supportive.

Final Words 

Maggi crisis management case study provides valuable insights into how a brand can effectively navigate a crisis and rebuild its reputation. Maggi’s experience highlights the importance of proactive crisis preparedness, effective communication, collaboration with regulatory authorities, and building and maintaining brand trust and credibility.

Finally, maintaining brand trust and credibility is crucial in crisis management. By consistently delivering on brand promises, organizations can weather a crisis with the support of loyal consumers. Building strong reputations beforehand helps in times of crisis, as consumers are more likely to give the benefit of the doubt and remain supportive.

By learning from the Maggi crisis management case study, organizations can implement these strategies to navigate crises effectively, protect their reputation, and emerge stronger from challenging situations.

About The Author

Tahir Abbas

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20 What Went Wrong? A Case Study on Nestle Maggi Noodles

• Published: June 2022
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Nestle’s ‘Maggi brand noodles’ the trusted and valuable food brand in India is the favourite among all the children in the country. It was considered as snacks in many households and a basic diet in many other homes. But in the recent past, the ban on Maggi has created a negative impact of Nestle. The favourite and most preferred instant food product of children, Maggi Noodles, got entangled in its ethical issues of the ingredients being used. The corporate social responsibility of Nestle India was tremendously cross-questioned with its after-test results, by food regulatory authorities. The case study is an effort to explore the various issues, possibilities, and opportunities for Maggi. The study focuses on need and scope brand image and brand repositioning, brand extension, etc.

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Nestle India Maggi Noodles Ban Case Study Solution

Introduction:.

The project titled “A case study of India’s favorite’s instant noodles-MAGGI, a product of Nestle India Pvt. Ltd.” deals with the study of the case of MAGGI ban, which happened in 2014. The project report mainly deals with the impact of ban on NESTLE’s financial results for the year 2014 and 2015. Also it studies the marketing and promotional strategies that are adopted by NESTLE India Limited post ban. The long term success of any company can be effectively measured in terms of brand value it creates in the market place, but more than that it is the brand image in the consumer’s heart which matters the most. The unique selling proposition of a particular product has to be the impact on environmental, social and human health criteria.

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What is the Format of a Case Study

Useful Tips on How To Write a Case Study

Objectives of The Study:

• To examine the root cause of Maggi row.
• To assess the impact of Maggi row in India.
• To understand the marketing and promotional strategies adopted by NESTLE India Limited post ban.

Limitation of The Study

• Time, being the major constraint while undertaking the research has limited it to an extent.
• Availability of resources like funds, appropriate data for analysis is another limitation of the study.

Research Methodology:

Research comprises “creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of humans, culture and society, and the use of this stock of knowledge to devise new applications. It is used to establish or confirm facts, reaffirm the results of previous work, solve new or existing problems, support theorems, or develop new theories. Research methodology is a systematic way to solve a problem. It is a science of studying how research is to be carried out. Essentially, the procedures by which researchers go about their work of describing, explaining and predicting phenomena are called research methodology. It is also defined as the study of methods by which knowledge is gained. Its Aim is to give the work plan of research. Data collection would basically mean systematic collection of data from various sources for undertaking a research. Data is the basic inputs for taking any decisions.

Methods of Data Collection:

• Primary data: Primary data means fresh data which is collected for the first time with a stated purpose. It could be collected through surveys, observations, interviews etc.
• Secondary data: data which is gathered and analyzed by someone else and for an objective other than the current objective is secondary data. It involves less cost, time and efforts. This project is based on data collected from secondary sources such as newspapers, internet, magazines, books etc.

Nestle S.A. is among the largest consumer packaged goods companies in the world, founded and headquartered in Vevey, Switzerland. Nestle originated in a!905 merger of the Anglo-Swiss Milk Company, which was established in 1866 by brothers George Page and Charles Page, and the Farinc lactee Henri Nestle Company, which was founded in 1866 by Henri Nestle, whose name meant “Little Nest”. The company grew significantly during the First World War and following the Second World War, eventually expanding its offerings beyond its early condensed milk and infant formula products. Today, the company operates in 86 countries around the world. NESTLE is the world’s leading Nutrition, Health and Wellness company. Our mission of “Good Food, Good Life” is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night. The Company was founded in 1866 by Henri Nestle in Vevey, Switzerland, where our headquarters are still located today. We employ around 2, 80,000 people and have factories or operations in almost every country in the world. NESTLE’s relationship with India dates back to 1912, when it began trading as The NESTLE Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in the Indian market. After India’s independence in 1947, the economic policies of the Indian Government emphasized the need for local production. NP’! STLF responded to India’s aspirations by forming a company in India and set. Up its first factory in 1961 at Moga, Punjab, where the Government wanted NESTLES to develop the milk economy. The Company’s activities in India have facilitated direct and indirect employment and provides livelihood to about one million people including farmers, suppliers of packaging materials, services and other goods. The Company continuously focuses its efforts to better understand the changing lifestyles of India and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness through its product offerings. NESTLE India manufactures products of truly international quality under internationally famous brand names such as NESCAFE, MAGGI, MILKYBAR, KIT KAT, BAR-ONE, MILKMAID and NESTEA and in recent years the Company has also introduced products of daily consumption and use such as NESTLE Milk, NESTLE SLIM Milk, NESTLE Dahi and NESTLE Jeera Raita.

Nestle’s Presence in India :

After more than a century-old association with the country, today, NESTLE India has presence across India with 8 manufacturing facilities and 4 branch offices. NESTLE India set up its first manufacturing facility at Moga (Punjab) in 1961 followed by its manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud (Karnataka), in 1989; Samalkha (Haryana), in 1993; Ponda and Bicholim (Goa), in 1995 and 1997, respectively; and Pantnagar (Uttarakhand), in 2006. In 2012, Nestle India set up its 8th manufacturing facility at Tahliwal (Himachal Pradesh). The 4 Branch Offices located at Delhi, Mumbai, Chennai and Kolkata help facilitate the sales and marketing activities. The NESTLE India’s Head Office is located in Gurgaon, Haryana.

Competitors of Nestle MAGGI:

Maggi instant noodles, foods major Nestlé’s flagship brand that has dominated the Indian instant noodles market for nearly three decades, is losing market share on a monthly basis to newer entrants such as Patanjali Noodles, GlaxoSmithKline’s (GSK) Horlicks Foodies, Hindustan Unilever’s (HUT.) Knorr Soupy noodles, Big Bazaar’s Tasty Treat, Top Ramen and several other smaller players.

The Nestle MAGGI BAN – Case Study Solution:

It all started back in march 2014 in Uttar Pradesh, where the authorities informed nestle that MSG was detected in a sample of MAGGI Noodles that carried a “No added MSG” claim on the pack. In the first half of 2015, Nestle India decides to temporarily stop selling MAGGI Noodles in India until the situation with the authorities is resolved. The Food Safety and Standards Authority of India (FSSAI) issues an order to Nestle India which includes, among others, the:

• Recall of all nine variants of MAGGI Noodles from the market
• Halt of commercial activities related to the product, including sale and production. Removal of the “No Added MSG” claim from product packs.
• Withdrawal / recall of MAGGI oats Noodles as it did not have ‘Product Approval’.

In June 2015, Nestle India files a legal petition with the Bombay High Court, seeking a judicial review of this order. While legal proceedings arc ongoing, Nestle continues to comply with the FSSAI order and destroys over 35,000 tonnes of the product, though the Bombay High Court allows Nestle India to continue exporting MAGGI Noodles. As the year passed, in the second half of the year in August 2015, The Bombay High Court overturns the government’s ban on MAGG3 Noodles, arguing that the move was “arbitrary” and “that principles of natural justice were not followed.” The court rules that Nestle India can bring the product back to the market if fresh tests – conducted in three accredited laboratories on the existing samples and subsequently on the freshly manufactured product – find the product safe.

In October 2015, Test results from all three laboratories mandated by the Bombay High Court show MAGGI Noodles to be safe, with lead content well within the permissible limits. In compliance with the orders of the Bombay High Court, Nestle India commences manufacturing MAGGI Noodles and submits the new batches for fresh tests to reconfirm they are safe for consumption. In November 2015, All three NABL (National Accreditation Board for Testing and Calibration Laboratories) accredited laboratories – mandated by the Bombay High Court – find samples of the newly manufactured MAGGI Noodles to be safe for consumption, with lead content well within permissible limits. Now that the orders of the Bombay High Court have been complied with, Nestle India has made MAGGI Noodles available for sale once again.

The Burnt From Maggi:

Affected by a countrywide recall and destruction of its instant noodle brand, Maggi, India’s largest food company by revenue, Nestle India, posted its first quarterly loss in 17 years. The Indian subsidiary of the world’s largest food company reported a Rs 64.4-crore net loss in what was its most challenging quarter to date. Thanks to the recall and ban of Maggi on June 5 (trouble for it began towards the end of May when sales began falling after detection of contaminants in some of the product’s samples), the company took a one-time charge of Rs 452 crore which hit its bottom line.

Market Share/ Share Price:

Nestle India’s nine variants of Maggi noodles accounts for nearly 70% of the instant noodles market, which took a massive hit when a blanket ban was imposed on the product. After the ban was imposed on June 5, the company’s share price tanked. On June 8, three days after the pan-India ban was imposed, Nestle India’s share price was down to Rs 5,539.8, the lowest level it had seen all year. Since then, the company’s scrip has seen major volatility, regaining the highest level since the ban at Rs 6,831.95 per share on August 5. On the date, Goa deputy chief minister Francis D’Souica had said that he favored the re-think on the Maggi ban after the latest tests conducted by a central government laboratory in Karnataka found the instant noodles safe for consumption.

Profits / Sales:

Nestle added while releasing its results that the June quarter of this year was not comparable with the corresponding period last year. “Results for the quarter have been affected by the Maggi noodle issue,” it. said in its statutory statement. “Recent developments and growing concerns about the product had led to an environment of confusion, leading to the product being temporarily taken off shelves,” the company said. “Without question, trust has been hit and for Nestle to win that back will not be easy,” a senior industry executive from a rival company said. “While Maggi contributed some 22 per cent to the company’s revenue in 2008, it is now at 30 per cent,” this executive said. “In the same period, revenue contributions of Nestle’s ‘chocolate & confectionery’ and ‘beverages’ businesses have together come down to some 25 per cent from 32 per cent,” he added. As things stand today, Nestle India derives 46 per cent of its revenues from milk products and nutrition, 29 per cent from prepared dishes and cooking aids, 13 per cent from beverages and 12 per cent from chocolates.

The Corporate Affairs Ministry imposed a nearly-Rs 640 crore fine on Nestle India, in lieu of finding MSG and lead beyond the permissible limit in Maggi noodles. The government filed a Rs 640-crore class action suit before the consumer forum National Consumer Disputes Redressal Commission (NCDRC). Out of this Rs 284.45 crore was sought in basic damages, and another Rs 355.5 crore in punitive damages. However, the government had said that the penalty could go higher as it was still calculating further damages to be sought.

Management:

Nestle India’s managing director Etienne Benet was called back by the parent company on July 24. On August 1, Suresh Narayanan was appointed as the company’s new managing director. On Thursday, after announcing the Jul-Sep results, the company’s board appointed Narayanan as the company’s chairman too. The move came after Nestle India’s chairman Antonio Helio Waszyk retired on October 1.

Operations:

Nestle India shut down Maggi production at all of its eight production units in India. However, since the ban was set aside, Nestle India has started production at three of the eight factories. and wants to start production at all the factories soon. “We have resumed manufacturing of Maggi Noodles at three of our plants, at Nanjangud (Karnataka), Moga (Punjab) and Bicholim (Goa),” said a Nestle India Spokesperson.

Advertising:

With the ban now kept aside and Maggi cleared for production, Nestle India is gearing to relaunch the instant noodles. For this, the company has said that it. Will be advertising aggressively, increased its spending on TV commercials. During the ban, Nestle India had come up with a series of advertisements to the theme #WeMissYoutoo.

Marketing Strategy By Nestle Post Ban:

In today’s world of citizen journalism, news goes viral in a flash. And if it is bad news, it acquires a spin and speed that is virtually impossible to stop. Brands, therefore, are more susceptible to a tarnished image today, than in any other day and age. The cocktail of the online and offline world, consumer and shareholder activism, random decisions by government bodies, volatile social groups, and hatchet jobs by competing firms make it all too easy to fall from grace. And the loss of goodwill can play out in the form of decreased revenue, loss of clients or suppliers and loss of market share. Maggi re-launched with a digital media campaign “WeMissYouToo” and they have been promoting it forcefully on all brand’s social media channels. This as well as the brand has turned to a great degree brief in answering to their fan’s post. Be it loving their presents or answering on them, Maggi is trying to include an individual touch in their correspondence. In an interview, Narayanan said the organization is taking a look at setting up 24×7 sans toll customer services too keeping in mind the end goal to “get the connect, and network with the product consumer. Suresh Narayanan, chairman and managing director, Nestle India, said, “Our promotional strategy will be across three platforms. We will use traditional media to reassure our consumers regarding the safety of our product. We will connect digitally with our target group. Besides, there will be a lot of events tor brand activation.” The Swiss food major has also partnered with online marketplace Snap deal for selling Maggi.

• In 2013, Net sales grew up by 7.1% contributed by net realizations and volume growth in certain products as compared to year ended 2012.
• In 2014, the net sales grew up by 8.2% as compared to the previous year.
• In 2015, net sales decreased by 17.2% largely due to the impact of MAGGI noodles issue. Net domestic sales decreased by 18.3%. Export sales also decreased by 1.3% because of the MAGGI issue and lower coffee exports.
• Share prices were also impacted with the MAGGI issue.
• Other current liabilities

The other current liabilities have increased, in comparison to the year 2014, mainly due to the MAGGI noodles issue liability.

• The Bollywood superstars who endorsed the brand are now facing the danger of FIR to be lodged against them under various Indian Penal (“ode sections which include section 420 charge for cheating consumers, section 270 charge for involving in the malignant act responsible for likely to spread diseases dangerous for human health and section 273 charge for getting involved in the promotion of sale of noxious food.
• Some websites and discussion forums reveal that it not the problem with the product rather the way it is cooked even the company agrees to this but then question arises why such warning was not given on the packet.

RECOMMENDATIONS:

• MAGGI, being an icon of nestle; should not be the target of controversies that questioned its reputation. Nestle should attach more value and significance to its product.
• Each brand has a soul and distinct characteristics. That’s what distinguishes a cult brand from an average brand. Nestle should come up with representations at local vendors and media with its best product quality assurance and safety.
• Bearing the competition created by products of Knorr, patanjali, top ramen is an important task for nestle now, after the comeback.
• Nestle needs to re-formulate MAGG1 as per Indian standards and regulations, and replace them in stores.
• Investing in corporate social responsibility activities, signing a credible endorser, effective public relations etc. would help regain customer confidence.

CONCLUSION:

Nestle motto ‘Good Food, Good Life’ will have to prove its credibility and put a lot of efforts again as it has ended up in scratch. Nestle should concentrate on product portfolio diversification with focus on diary, beverages and coffee and also chocolates as well as confectioner}’ in order to avoid over-dependence on single product. It is rightly said one can do anything but only if God and Time permits. Those who fail to analyses the happenings in the surroundings become losers and those who accommodate and adjust according to time rule the world. The controversy started igniting last year but no officials of Nestle India paid heed to do the necessary rectification resulting now a bad name and shame for the company. Health is of prime concern for everyone though taste also matters. It is very difficult to restore the faith lost because even the school going kids now say -Maggi is bad. This controversy will surely lead to increased awareness among consumers for understanding the impact of any product before consumption rather than blindly believing on false claims in the advertisements. It will also pressurize the other food product giants to move cautiously by abiding the norms of Food and Safety regulatory norms.

Also Study:

Nestle Operations Management Project Report

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Nestle India and its Revival:A Case study on Maggi Brand

The favorite and most preferred instant food product of children, Maggi Noodles, got entangled in its ethical issues of the ingredients being used. The safety of the consumers was found to be hazardous inclining us to give its detailed study with certain facts and figures. The study focuses on the causes of destructive positioning and its aftermath. The corporate social responsibility of Nestle India was tremendously cross-questioned with its after test results, by food regulatory authorities.The public relations of the Company got worsely affected with the issues stated. It made us to further focus on its repositioning state as well as its policies of managing the crisis period.

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