Nestle Maggi Crisis

The Nestle Maggi Noodle Crisis: A Brief Overview

In 2015, Nestle faced a significant food safety controversy involving its popular instant noodle brand, Maggi, in India. The crisis began in May when the Food Safety and Standards Authority of India (FSSAI) ordered a nationwide recall of nine Maggi noodle variants due to higher-than-permissible levels of lead and MSG (monosodium glutamate). The FSSAI also accused Nestle of misleading advertising and labeling practices.

The news of the recall spread rapidly, leading to a severe impact on Nestle's business. The company had to recall and destroy over 30,000 tons of Maggi noodles, costing over $50 million. Sales of the product plummeted, and Nestle's share price fell, tarnishing its reputation as a trusted and reliable brand.

Nestle responded to the crisis by cooperating with regulatory agencies, addressing their concerns, and launching a public relations campaign to restore consumer confidence. In August 2015, Nestle announced that lead levels in Maggi noodles were within permissible limits and that the product was safe to eat. New packaging was introduced, emphasizing the product's safety and lack of MSG.

In November 2015, the Bombay High Court lifted the ban on Maggi noodles, criticizing the FSSAI's "arbitrary and irrational" actions and unprofessional testing procedures. Nestle worked hard to regain consumer trust and rebuild its brand, investing in marketing campaigns and making significant changes to its supply chain and quality assurance processes.

The company's efforts paid off, and Maggi noodles gradually regained their popularity in India. By 2016, the product had recaptured a significant market share, and Nestle's sales and profits returned to pre-crisis levels. The Maggi crisis served as a wake-up call for Nestle and the food industry, highlighting the importance of food safety standards, corporate responsibility, and the power of social media in shaping public opinion and driving corporate accountability.

1. Nesle Maggi Crises Social and Cultural Impact “Taste Bhi Health Bhi”

2. CONTENTS Introduction Benefits Case study (safety concern ) Timeline Goodwill Testing controversies Graph Comeback Results

3. Introduction to Nestle & Maggi F o u n d e r - H e n r i n e s t l é Year - 1886 Place - Velvy, S w i t z e r l a n d M a g g i N o o d l e F o u n d e r - J u l i u s M a g g i Year - 1884 A c q u i r e d by n e s t l e - 1947 I n t r o d u c e d In I n d i a - 1983

4. Benefits Of M a g g i Noodles Can be cooked in a short span of Time. Can be afforded by Layman. Contains six Major Nutrients. Fortified with Vitamin “A” and Iodine. It Branched out to multiple flavours.

5. Maggi In India Maggi noodles are popular in India, Bangladesh, Pakistan, Singapore, Malaysia, Australia, New Zealand. Entered India in 1982 with it’s instant noodles formula(2-minute noodles). With the launch of Maggi Noodles in India it created an entirely new category “Instant Noodles”. Maggi noodles earn 29.23% of nestle India’s total sales in 2014-15.

6. Strategies To Enter In Indian Market Maggi-2minute noodles entered into Indian market with price of 2.10 Rupees with a close of 100% margin. Nestle positioned Maggi noodles as a convenience product for mothers and as a fun product for children. Their tagline was “Fast to cook good to eat” was also suitable for establishing their market positioning.

7. Maa Ka Bharosa

8. Maa Ka Bharosa

9. Introduction In April 2015, a government referral laboratory in Kolkata, following up on an initial report from Barabanki in Uttar Pradesh, reported excess lead in samples of Maggi. Nestle lost more than Rs 500 crore (US$77 million) over the ban, which forced it to destroy more than 37,000 tonnes of Maggi noodles. What they have a clear philosophy: think global and act local. The company had faced in the 32 year-long standing history in the subcontinent.

10. FACTS:- Maggi lead content found 17.2 ppm. Trust level dropped to 2% from 91%. Analyst from Italy was called to handle the situation. Avoiding Media was their biggest mistake. New campaign strategy were delayed. Maggi did not apologize for a long time, and took the fight with government.

11. WRONG OR RIGHT DIDN’T MATTER . TWEETS LIKE THIS WERE ON SHORE.

12. News of Maggi on Zee News at the time of BAN

13. TIMELINE

14. Nestle under crises The Maggi fiasco had repercussions on the company as whole, and nestle sustained its quarterly loss in 17 years, according to its quarterly reports for the period ending June 2015. The corporate affairs Ministry of India Imposed 640 crores fine on nestle

15. Testing Controversies Testing found MSG (Monosodium glutamate) in Maggi noodles. When packet stated "No added of MSG“ Maggi offered to removed "No added of MSG" to overcome objection. Maggi flavouring packets includes named "Tastemaker". Out of 30 products tested by Delhi authorities, 10 of them had lead content exceeding limit. (2.5 parts per million)

16. Nestlé's Reaction The company rejected the accusation that the noodles were unsafe. Nestle continued to keep its customers up to date on the investigation into the safety of Maggi noodles in India. Nestle launches a FAQ page on the official website. 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.

17. Comeback The comeback of Maggi takes place on auspicious eve of Diwali and on the day of Dhanteras. Nestle Maggi tied up with E-commerce giant Snapdeal and launched an exclusive "Maggi Welcome Kit". Announced #SNAPDEALWELCOMEMAGGI. Snapdeal sold Maggi via unique "Flash Sale Model“ for its comeback after a gap of five months.

18. Bounce Back In Market In India, Maggi products were returned to shelves in November 2015, Accompanied by Nestle advertising of the Indian community. Maggi anthem by Vir Das and alien chutney became popular.

19. CRISIS MANAGEMENT TO IMAGE BUILDING: The sales were up, the campaigns were successful, all laboratory tests were cleared. The absence of the product gave space for competitor products to flourish. Patanjali Noodles, Wai Wai and Ching’s Noodles now became key players in this market. To reassert the product’s dominance over others from the same category PR team decided to again hit back with another campaign titled #NothingLikeMaggi, asking customers to share their ‘Nothing Like Maggi moments’.

20. Loss To Nestle Due To Maggi

21. Nestle India had in 2017 crossed the Rs 10,000-crore sales mark. Maggi has attained over 60% market share. Nestle India launched up to 25 products across various categories in a day to fend off competition. Oct 2015 Nov 2015 Dec 2015 Jan 2016 Feb 2016 Market Share (by volume Nil 10% 33.3% 42% 48% No. of outlet s (in millions) Nil 0.5 1 1.4 1.8

22. Results Achieved By Nestle There was so much anticipation for the return of one of the India's favourite brand that the company witnessed a phenomenal response. It took nearly 5 minutes for 60,000 Maggi welcome to be sold on Snapdeal website. The marketing partnership between Nestle India and snapdeal bore fruit for both. Maggi is currently available in over 700 towns and sold by 3 lakhs shopkeepers.

23. Conclusion Nestle recalled it’s Maggi inventory, so that this issue doesn’t hamper the sales of other Nestle products. Nestle was not sure about Maggi’s meeting standards, that’s why they took abrupt decisions. Ban on Maggi incurred standalone loss of 64.40 crore rupees. Nestle managed to claw its way back by extensive marketing campaigns and over two dozen product launches. Maggi was once again India’s top noodles brand with a 60% market share. Nestle and FSSAI even joined hands to set up a food safety institute at the former’s research and development centre in Manesar, Haryana.