Nestle goes all out to protect reputation of Brand Maggi in Indian market

Brand experts believe that the recent court ruling is unlikely to create a big impact on the brand

Nestlé India and Brand Maggi have come a long distance since the days of the ban. But just when it seemed that Maggi had truly left its past behind, the corpse is out of the grave again. While the fears being revived over the product are the same, the big difference this time around is that Nestle is wasting no time firing up the communication lines. It has already launched an advertising campaign over the safety of Maggi and has a team on high alert monitoring comments or misinformation that could send Maggi hurtling off the shelves, like the previous time.

Last Thursday, a Supreme Court (SC) bench revived an old class action suit against Nestlé India. The suo moto suit —first of its kind in the country —filed by the consumer affairs ministry had alleged that Nestlé caused mass damages and sought Rs 640 crore in compensation. 

In newspaper advertisements released over the weekend, the company has assured consumers about the product’s safety. The company’s marketing team is also closely monitoring consumer reaction on public platforms and keeping an eye out for potential damage to the brand in the upcoming courtroom battle in the SC and the National Consumer Dispute Redressal Commission (NCDRC).

Nestlé’s concerns are not unfounded. Brand Maggi holds pride of place in the company’s 107-year-old history in India. The flagship noodle brand, launched in 1983 as a post-school snack for kids, accounts for over 25 per cent of the firm’s sales turnover in the country and is sold in dozens of other countries. When Maggi was banned in India, it not only cost Nestlé over Rs 10 billion in loss of sales, inventory and loss of brand value, but also affected its global image.

A Nestlé India spokesperson said, “Brand Maggi stands for taste, quality, convenience and innovation. Our approach as a credible, trustworthy and responsible company is to always communicate with consumers on facts, in a simple, clear and transparent tone and manner. We are helping consumers make better choices, by placing GDA labelling on the front of all our packs, detailing exactly what the role of the product is in your diet. And for those that seek further information, the website allows consumers to find out how our noodles are made.”

Brand experts believe that the recent ruling is unlikely to create as big an impact on the brand. According to founder-CEO of Bijoor Consults, Harish Bijoor, the class action suit may not have any impact. He explains that “while, last time, it was a matter of concern for consumer directly, this time the issue is between the government and the company. This is not going to have any direct impact on the brand.”

Even sources within the government appear more relaxed this time and say, the revival of the suit is a legal procedure that was due. “Quality concerns over Maggi noodles is a thing of the past. Both, Nestlé and the authorities, have worked to ensure Maggi is safe in the past three years,” said a senior government official, having direct knowledge of the developments.

Pawan Agarwal, chief executive of Food Safety and Standards Authority of India, the country’s apex food regulator that had banned Maggi noodles in 2015, is forthright about the case. “Nestlé’s testing mechanism and self-compliance have been at par, which means, Maggi noodles is now safe,” he said. Just as the authorities’ reactions  are very different this time around, the swiftness with which the company has jumped to Maggi’s defence is also a far cry from the last time. 

In 2015, after Maggi’s ban in June, the company’s handling of the crisis was questioned by brand professionals and crisis managers alike. The company had retreated into a shell, refusing to answer queries. In  August 2015, at the peak of the crisis, the then newly appointed managing director (MD) Suresh Narayanan addressed employees in a town hall meet and reminded them about the reputation the brand had among millions of consumers and eventually, the media response team gained vigour. Since then the company has released a series of ads establishing the safety of the product and its longstanding relationship with the country. 

This helped Maggi regain lost ground, it now has  60 per cent of the instant noodle market and notched over Rs 2,500 crore in sales in 2017. But as Nestlé knows only too well, it takes very little for  brands to crumble and controversies to spiral out of control. That is a chance it can not take.

The Maggi potboiler

June, 2015: FSSAI bans Maggi noodles in India

July, 2015: Nestlé moves Bombay HC against FSSAI order

August, 2015: Class action suit filed in NCDRC seeking Rs 640 crore in damages

October, 2015: Bombay HC gives clean chit to Maggi noodles; Nestle begins new ads 'Miss you Maggi'

November, 2015: Maggi noodles relaunched on an e-commerce channel; ad campaigns and promotional schemes follow

April, 2016: Maggi regains top slot in noodles market; 

October, 2016: New variants of noodles launched with new campaigns

December, 2017: Maggi generates over Rs 2,500 crore in yearly sales

January, 2019: SC allows NCDRC to hear class action suit; Nestlé comes up with ads assuring consumers about the safety of the product and educating them about lead content