NIMA FRANCIS – M1934
Before Maggi instant noodles was launched in India in 1983, nobody had imagined that a snack could be prepared in a jiffy. Ushering in the ‘two-minute revolution’, this product was initially targeted towards middle class working women who struggled between their duties in both the public and the private spheres. But more than Maggi moms, the product appealed to children and youngsters. In no time, Maggi was at the tip of everyone’s tongue, quite literally.
For three decades, it was a smooth sailing for Maggi. But a storm struck in 2014 when a laboratory in Gorakhpur proved that samples of Maggi contained lead and monosodium glutamate1 (MSG) much beyond the permissible limit. Nestle India challenged this decision but the results by Kolkata central laboratory in 2015 corroborated the previous results. Consequently, several state governments began testing samples and banned the product. Within a few days, Maggi was off the shelves.
When Nestlé India realized it had landed in a soup, it knew it was time to hand over the reins to an expert crisis manager. Mr. Suresh Narayanan, former head of Nestlé’s operations in Philippines and Egypt, was asked to ‘bring the company back on track’ in India. He was initially surprised by this choice, but took things in his stride. At the time of his appointment, he admitted he did not have a clear idea of the severity of the damage and what he was going to do to repair it. All he knew was that his company trusted him. He had to now recalibrate, renew and rebuild the brand from scratch. He had to bring Maggi back.
The Crisis
Maggi instant noodles came under the scanner for three main reasons. The first was the aforementioned violation of the regulations for adding lead and MSG into the product. As against the maximum limit of 2.50 parts per million (ppm), the amount of lead detected in the Maggi samples was perilously high at 17.2 ppm. The second offence was mentioning ‘No added MSG’ on the packaging, which is an act of mislabelling. Also, it launched ‘Maggi Oats Masala Noodles’ without meeting the appropriate norms of standardisation. On June 5, 2015, a nationwide ban was imposed on Maggi by FSSAI (Food Safety and Standards Authority of India).
Prior to the ban, Maggi owned nearly 80% of the market share in the instant noodles segment. In the blink of an eye, its share plummeted to zero. The crisis was grave and it was a state of emergency for Nestle India. The company was neither prepared for it nor did it have any immediate plan of action to overcome it. It only played with fire by initially denying the allegations of hazardous composition of Maggi. But when it was proven guilty for the second time, the customers were furious. There were instances of mass protests by Maggi lovers who were hurt by the severe breach of trust. Maggi was losing not only its market share but also credibility. A three-decade long relationship was at stake. It was time to act before it was too late.
Nestle Acts
Nestle had scarcely imagined that this could be its worst crisis in decades. Perhaps the magnitude of the controversy was underestimated at the outset. This was surprising, given that it was a Swiss multinational corporation. Apparently, the existing leadership was taken off-guard and could not take a call over the future plan of action.
To begin with, in June 2015 itself, Nestle announced a recall of all its instant noodles from the markets. It began to be executed within two days. At the same time, the other step was confidence building measures. It regularly called for press conferences and also approached the Bombay High Court for relief, following which the Court permitted export of Maggi to other countries. Further, Nestle India sought help from APCO Worldwide, a US based Public Relations firm. They set up a mechanism for maintaining customer relationships, be it through a customer services helpline or posting FAQs regarding recent developments on its website, not to mention its presence on social media platforms like Facebook and Twitter, where representatives answered all sorts of questions asked by irate customers.