May 2015 will be remembered a problematic month for one of India’s biggest brand MAGGI noodles. Maggi is a well established brand of global FMCG giant Nestle and has been operating in India for nearly 3 decades now. The noodle brand turned from a loved one to a controversial one. One of India’s most loved food brand, especially children, is facing a ban in many states in India.
In 2014, Maggi noodles was ranked 18 in the BrandZ Top 50 Most Valuable Indian Brands study, conducted by Millward Brown and commissioned by WPP last year, with a valuation of $1,127 million. Experts have an opinion that the brand value has eroded by at least 30-35% in last 2 weeks. Since the time the controversy broke, Maggi India sales have dipped over 30%.
Brands falling in controversy is not a new thing to Indian market. Few years back Coke and Pepsi were involved in controversy over using pesticide as an ingredient in the drinks. Cadbury also came under the lens when the issue of worms in chocolate broke in. Both the brands have managed to bounce back after crises, it took long and sustained efforts to engage with the public.
What should Maggi do to come out of it?
In this troubled time the foremost thing Nestle should do is start communicating with its stakeholders. In its recovery mode, there are two key elements that need to be taken care of — trust of consumer and trust of investors.
To win the trust of investors the global CEO of Nestle P Bulcke is in India and is attending the press meet to gain investor’s faith. “Maggi has been trusted in India for over 30 years. Trust of our consumers and safety of our products is our first priority anywhere in the world,” Bulcke said, adding: “Our priority now is to engage all stakeholders to clear the confusion. Maggi will be back on store shelves soon.” (source ET)
Nestle needs to first address the concern of the regulator – The Food & Drugs Authority of India (FDI) whether its is actually safe for consumers or not? Once the company comes clean on this issue then the “damage control” work should begin.
Maggi needs to have a new face as its brand ambassador who is a credible personality, somebody like Aamir Khan. Madhuri Dixit being an existing brand ambassador is under legal scanner for promoting the unhealthy noodles and misguiding consumers. Aamir Khan was earlier roped in by Coco Cola to come out of the pesticide controversy.
If Maggi noodles is really safe for its consumers it will bounce back like Pepsi, Coke and Cadbury but if it is not then it will be in troubled water for longer time unless it fixes the issue.
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