Introduction:

Nestl India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestl
SA, introduced the Maggi brand in India in 1982, with its launch of Maggi 2 Minute
Noodles, an instant noodles product. With the launch of Maggi noodles, NIL created
an entirely new food category - instant noodles -in the Indian packaged food
market. Because of its first-mover advantage, NIL successfully managed to retain its
leadership in the instant noodles category even until the early 2000s.Over the
years, NIL extended the Maggi brand to a variety of culinary products like soups,
sauces and ketchups, and cooking aids among others. However, these product
extensions were not as successful as the instant noodles. In 2005, NIL started
offering a range of new 'healthy' products under the Maggi brand, in a bid to attract
health-conscious consumers. This report looks at the various phases in the product
life cycle of Maggi noodles in India. It talks about the various measures taken by
NIL to keep the Maggi brand fresh in the minds of Indian consumers. The report also
talks about the various extensions of the Maggi brand and tries to analyze why only
the sauces and ketchups category, among all the other product extensions,
managed to succeed. It further discusses the measures taken by NIL to reposition
Maggi as a 'health product'. The report ends with a discussion whether NIL would
be successful in sustaining this new image for Maggi in the market.
Nestle India Limited is the market leader in Indian Noodle Market with its Maggi
Brand of Noodles which was pioneer brand launched in 1983 in the packaged food
market of India. It took the challenge and established Maggi in Indian market
considered to be conservative and typical about food consumption. It appropriate
realization of target segment, effective positioning and effective promotion and
sales made Maggi to Noodles in India as Xerox it to photocopier. NIL had introduced
sauces, ketchups and soups under Maggi brand to reap benefit of brand popularity
and image and contribute to financial gains by 1990.Maggi also became successful
in sauces, ketchups and soups Market in India. Though NIL tried to extend to other
ready to eat products like pickles, cooking aids and paste, it was unsuccessful so
dumped those products. Maggi Brand of products sustained recession in 2000 and
2001 in India by introducing economy packets. To fulfill novelty needs of customers

and revitalize Maggi Noodles Brand NIL made different attempts by introducing new
formulation to new taste but customers resisted change and Maggi had to
reintroduce Maggi Noodles in same taste. Maggi Noodle had till 2005 five product
line on noodles with four variant in Maggi 2 Minutes Noodle. In 2006 in compliance
with NIL target to be health and Wellness Company Maggi repositioned it as
health and taste food products. NIL has also introduced with taste and product line
in Sauces and Soup Market under Maggi to catch new segment, revitalize brand,
compete with other producers and fulfill expectation of customers. In 2005 Maggi
brand worth was 3.7 billion from 1.7 billion market worth in 1.7 billion in 2003.
Maggi Noodle is Market leader with around 80% market share in Noodles/Pasta and
Maggi Sauce is market leader with almost 37% of market share in 2005 in 1.8 billion
market of India. Knorr has taken over Maggi in Soup market recently. In 2005 Maggi
was the highest spender in the Promotion and Sales in the Indian Market in the
Noodles Category.

Verbatim
"What Xerox is to photocopier and Colgate to toothpaste, Maggi is to noodles in
India." The Economic Times, a prominent newspaper in India, in 2003.
"Maggi is the leader in the Instant Noodles category because it is constantly
improving its understanding of the consumer to give them excellent and tasty
products that provide nutrition, health, and wellness." Martial Rolland, chairman and
managing director, Nestl India Ltd., in 2006.

Brand Value:
When it comes to customer reach and brand value, Maggi, the line of noodles,
instant soups and seasonings owned by Nestle, has been mentioned in the same
breath along with such big names as Coca-Cola and Colgate.
In one such survey focusing on Indian brands, by Millward Brown, Maggi was
ranked No. 18 with a valuation of $1.127 billion. According to a Euro monitor report,
Maggi accounted for 60% of Indias noodle sales last year. In other words, noodles

equal big money for Nestle, which is also home to Alpo pet food, Gerber baby food
and KitKat candy bars, among other product lines.
But now Maggi noodles have been pulled off the shelves in India. The massive
recall came after the Food Safety & Drug Administration of the state of Uttar
Pradesh found excessive levels of lead and MSG (monosodium glutamate) in a
sample batch of Maggi noodles. The government Food Safety and Standards
Authority (FSSAI) subsequently collected fresh samples of Maggi and, hours after
Nestle withdrew all varieties of the noodles on June 5, ruled the snack to be unsafe
and hazardous.
Though Nestle has challenged the findings in court, it has taken a $45 million hit
to withdraw and destroy the noodles. Nestle India stock dropped four days in a row,
and the share only regained slightly when company CEO Paul Bulcke made a
statement that Maggi noodles were safe for consumption. Bulcke also made a pit
stop in Delhi for two days earlier this month to try and defuse the crisis.

SWOT Analysis of Maggi as Brand

Strengths
Established Family Brand
Strong Global Corporate Brand ( NIL )
Specialization in food processing category marketing and distribution in Urban
market
Presence of other product segments of food category : Dairy Products, Chocolate,
Infant foods
Pioneer and Leader so 1st mover advantage in Noodles, Sauce, Ketchups and Soup
market.
Nestle symbolization of warm, family & shelter.
Research and Development Division in India
New Noodles Plant in Uttarnchal
Weakness
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 Generic Brand to Noodles in India

Low rural market presence constraints
Uniform Brand for all food category
Brand Proliferation
Opportunities
Growing package and canned food market in India by 15% annually.
High brand awareness of Indian consumer
Other product category like Biscuits, Chips and Ready to Eat Market still
unexplored.
Opportunity to be substitute to other snacks category of food products.
Threats
Competitors with long history in product category Internationally like, Heinz Sauce
and ketchups of Heinz Indian, Top Ramen in Noodle and
Knorr Soups.
Single product focused competitors like Heinz sauce and Wai Wai Noodles.
Less Entry Barriers in the Market segment for product category
ITCs strong base in Indian Market.
Substitute Product to Product Segment.

The Maggi Controversy: Nestls Maggi Noodles Banned in India's State Of

Delhi Over Allegations Of High Lead Content
Nestle India Limited's Maggi -- a hugely popular instant noodle product -- is
facing a crackdown in several Indian states after some tests revealed that the snack
contained high levels of lead. The Delhi state government on Wednesday banned
Maggi noodles for 15 days after test results deemed the product unsafe.

The Delhi city government reportedly conducted tests on 13 samples of Maggi

noodles, 10 of which showed an excessive amount of lead and the presence of the
chemical flavor enhancer, monosodium glutamate (MSG), which is not mentioned in
the product's list of ingredients. The Delhi government said that it will take legal
action against the company, which is a subsidiary of Swiss-based Nestle SA. Delhis
health ministry said Wednesday that the ban will enable authorities to check
samples, according to local media reports, adding that the company had been
asked to take the product off the market, NDTV, a local news network reported.
The company said on Wednesday said it had not received any order from the
central or state Food and Drug Administration authorities to recall Maggi noodles,
but added that it is "cooperating with the authorities, NDTV reported. Nestle India
earns around $240 million annually from Maggi noodles sales in India, and the
company's stock crashed nearly 10 percent on Wednesday.

"We regularly monitor all our raw material for lead, including testing by
accredited laboratories which have consistently shown levels in Maggi Noodles to be
within permissible limits," Nestle India had said in a statement released last year.
The southern Indian state of Kerala had ordered a pullout of the product from
government-run outlets on Tuesday, but later stated that the lead content in the
product is reportedly within permissible limits. The state governments of Haryana,
West Bengal, Karnataka and Maharashtra also have begun conducting tests for lead
and MSG in the product.
The controversy over Maggi noodles began last month after tests ordered by the
northern state of Uttar Pradesh found excessive amounts of lead in the product.
"Nestle claims its products are not harmful but we found lead in the taste enhancer
powder," S. K. Singh, a food safety regulator in Uttar Pradesh, said, according to the
Associated Press.
Meanwhile, some of Bollywood's biggest names -- Amitabh Bachchan, Madhuri
Dixit and Preity Zinta who have endorsed Maggi noodles at some point in time were
the target of a complaint filed by a court in the state of Bihar. "I have not received
any notice. As soon as I get it, I will put it up to my lawyers and we will fully
5

cooperate with what the law says. I would also like to add that I stopped endorsing
Maggi two years ago. I don't endorse Maggi anymore now. That happened two years
ago. So, I have not been associated with the product," Bachchan reportedly said, on
last year.
In May 2015, Indias food safety regulator from the state of Uttar Pradesh
claimed that samples of Nestls Maggi Noodles contained traces of lead beyond
permissible limits and added MSG monosodium glutamate). This led to other states
putting Maggi products to test. It passed the test in some states but failed in many
more. In a matter of days, the situation snowballed into a nationwide crisis for
Nestl, the parent company. The impact was such that Nestl India decided to
withdraw Maggi Noodles from the Indian market. Global CEO for Nestl Paul Bulcke
flew in from Switzerland to hold a press conference with the local media. The
company later released a press note on their website saying, In spite of MAGGI
Noodles being safe, Nestl India decides to take the products off the shelves.
(Nestl India, 2015) A press note was also released by the Ministry of Health and
Family Welfare, Government of India. It said that the response of the company was
considered by FSSAI (Food Safety and Standards Authority of India) and not found to
be satisfactory. Accordingly, vide Order dated 5.6.2015, FSSAI has directed the
Company as follows:

i.

Withdraw and recall all the 9 approved variants of Maggi Instant Noodle
from the market; and stop further production, processing, import,

ii.

distribution and sale thereof.

Comply with the labeling regulations and remove the label of No added

iii.

MSG.
Withdraw and recall the food product Maggi Oats Masala Noodles with
Tastemaker and any other product for which risk assessment has not

iv.

been undertaken and product approval granted.

Take appropriate action to re-ascertain the safety of its products in
compliance of the obligation contained in Section 26 of the Food Safety
Standards Act, 2006. (Ministry of Health and Family Welfare, 2015)

It was no surprise that stocks of Nestl India went crashing post this gigantic
crisis.
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One Brand's Loss is Another One's Gain: How Other Instant Noodle
Brands Are Using the Maggi Noodles Controversy to Their Advantage
Nestle India is neck-deep in trouble. And that's not just because Maggi
Noodles is staring at a nation-wide ban, or the fact that it's being tested across
different countries, but because it's competitors are capitalizing on probably
what one might call their 'worst phase'.
The Food Safety and Standards Authority (FSSAI) may have pulled up their
socks but so have other brands of instant noodles. According to a popular daily,
ITC has handed out notices to retailers and distributors stating that their brand of
instant noodles 'Sunfeast Yippee!' are safe. They've also shared a similar
message on their website.
"We believe that it is extremely important for us to reassure you of the
quality and safety of Sunfeast Yippee! Noodles. All Yippee! Noodles are
manufactured in state of the art, world-class facilities complying with strict
quality and hygiene norms. Between ITC Ltd and its trusted network of suppliers,
numerous tests are conducted daily at every factory to ensure that safe products
reach our consumers."
Further, stringent tests are conducted for our food products at ITC's NABL
accredited Life Sciences & Technology Centre as well as at FSSAI approved, NABL
accredited external laboratories. In all these tests, our food products have
consistently been found to comply with all regulations including those related to
levels of lead. No restrictions have been imposed in any state on the
manufacture, distribution or sale of Sunfeast Yippee! Noodles."
Another prominent personality who has spoken out on the issue of Maggi
Noodles is Baba Ramdev. "Maggi should apologize. And if the government takes
strong measures the company should be asked to pack up and leave the country.
We don't need a company that spreads poison. Maggi is filled with lead. If
children have Maggi they would be prone to heart, kidney and liver failures
besides cancer"

That's not all he said. Baba Ramdev has also announced that he will be soon
launching his own brand of noodles that will not be made with maida but with a
healthier alternative. He also said that the noodles won't be harmful to a person
and won't be addictive. He went on to say that he would also launch his own
brand of health drinks for children that would compete with Complan, Bournvita
and Horlicks.

Nestle reacted and managed the situation using multiple digital

channels: Implementation details
The Company used various social media channels to take care of its image while the media was
putting questions on its image.

Initially Company rejected the accusation that the noodles were unsafe and said on their website
and social media accounts that there had been no order to recall any products. A statement on their
website said The quality and safety of our products are the top priorities for our Company. We have
in place strict food safety and quality controls at out Maggi factories We do not add MSG to Maggi
Noodles, and glutamate, if present, may come from naturally occurring sources. We are surprised
with the content supposedly found in the sample as we monitor the lead content regularly as a part of
the regulatory requirements.

Nestle continued to keep its customers up to date on the investigation into the safety of Maggi
noodles in India. Nestle stated on the official Maggi noodles Facebook page, Twitter and website, that
extensive testing revealed no excess lead in Maggi noodles.

Nestle used its Twitter and Facebook accounts to answer customers questions about the levels of
MSG and lead found in their noodles. The company continued to re-assure customers that the
noodles are safe and that they are a transparent company working closely with authorities in India to
resolve the issue.

Nestle launches a FAQ page on the official website.

Nestle recalled all Maggi noodles from India. After re-assuring customers that its noodles are
safe, the brand did a U-turn and decided to recall Maggi noodles from the shelves. CEO Paul Bulcke
said We are working with authorities to clarify the situation and in the meantime Nestle will be
withdrawing Maggi noodles from shelves.

Nestle decided to destroy more than $50million worth of Maggi Noodles in India after they were
deemed unsafe by regulators.

Results Achieved

When Maggi was deemed unsafe in India, all eyes were on Nestle to see how they would
respond and manage the situation. Nestle defended its product on all social media channels and
rejected all claims that its noodles were unsafe. They used the best use of social media to connect
the masses. Initially the websites which were used for promotion of the product was now being used
for maintaining its image.

Maggi India twitter account makes an impressive effort to respond to every tweet from customers
on this issue with a pre-prepared statement explaining that lead occurs naturally in soil and water.
Nestle also explained the science behind the reason for the ban in simple terms so customers could
understand.

The scare was a huge blow to the company, which has been selling its Maggi products for over
three decades in India with 80% of the countrys instant noodle market. However, through smart use

of social media during the crisis, the brand limited further damage by reassuring and informing
customers to encourage them to continue buying the noodles in the future.

Nestle India is preparing a blueprint for a possible re-launch of the Maggi instant noodles brand.
Industry experts and analysts feel the issue of the recall and ban of Maggi noodles in India is likely to be
resolved in the next three to six months

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Possible Alternatives:

Strengthen and use the Distribution: NIL should focus on distribution

channels and use of the distribution channel to expand its market to Rural India with
products targeted to the market. It is the way it could increase its volume of sales.
Increase the Usage of Maggi Brand Products: Since Maggi Noodles and
Maggi Sauce is market leader it has to adopt strategy to increase the usage of the
product to protect its market share. As it cannot further grow sales drastically in the
same segment, only way is to increase product usage like Noodles for breakfast
Ketchups inbiscuits.
Lunch Health Awareness Promotion Campaign: NIL should launch Health
Awareness campaign to educate consumers about the benefits of health food. It
could sponsors health camps, publish health information.
Enter into other product category like Biscuits, Chips and Snacks with
New Brand: To enlarge its domain, NIL should enlarge its product segment. It
would spread economies of scale to customers in the form of price

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Conclusion:
After a difficult summer for Nestl India the company finally receives some
positive news after an Indian government approved laboratory has found that Maggi
noodles do in fact comply with national food safety standards. Indias food minister
has slammed the FSSIA (Food Safety and Standards authority of India) for creating
an environment of fear in the food industry. Meanwhile, Maggi noodles have been
cleared in many foreign countries; Nestl also received permission from the Bombay
High Court to export Indian Maggi noodles. As Indian Market is Brand conscious,
other competitors are coming up with more Indianized brand of products, and as
Indian being more aware of their culture and large segment being typical and
conservative about their culture, there care more chances that NIL would be
successful if it create a brand close to Indian culture in wording to positioning. As
India is growing, Old Indian Brands are also regaining momentum worldwide, NIL
could catch the trend of market. By doing so, NIL could avoid the draw backs
associated with the Maggi brand. It could position new brand in competition with
other competitors brand where there is no fit of product with the Maggi brand.

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