SEU Analysis of Public Relations Case Studies Questions

DescriptionCrisis at Maggi -: A Wakeup Call for all
Multinationals
N.H.Mullick
Associate Professor, JamiaHamdard (Hamdard University), Delhi
E-mail:drnhmullick@jamiahamdard.ac.in
The test report by Uttar Pradesh Food Safety and Drug Administration blamed that
MAGGI noodles (the flagship brand of Nestle) contained lead and monosodium
glutamate (MSG) higher than the permissible limits. This news spread like fire
through social media. The company did not issue any definitive statement to address
the concerns of regulators or consumers. Its sales receded from Rs 2000 Crore
resulting in an estimated brand loss of Rs 1270 Crore. The company also had to
incur a cost of Rs 320 Crore in recalling its product from all around the country. They
claimed that their product is safe based on their tests and this has been confirmed by
food regulators of seven countries including USA, UK, Singapore and Australia. It
was later visualized that the way it was tested in India especially in most parts of the
country had errors. So, who is guilty, the company authorities who could not
visualize the surging tide against them or the testing authorities who tested the
wrong way.
Introduction
The case discusses the effect of social media and the blow given to MAGGI, the
most popular instant noodle brand of the country because of the report that it had
high levels of lead as well as presence of MSG (monosodium glutamate). The
reports later on gave a different picture where it was again tested and found at
permissible levels in different countries around the world. It was later visualized that
the way it was tested in most of the parts of the country had errors. So, who is guilty,
the company authorities who could not visualize the surging tide against them or the
testing authorities who tested the wrong way. Nestle if we see did not had an inbuilt
response mechanism to withstand and counter this swelling crisis. Their silence in
the social media enhanced the crisis to such a level that they were not able to
counter the damage. This case, therefore elaborates the missteps of the company
which led to the withdrawal of its MAGGI noodles and also a wakeup call to strong
brands as well as multinationals to rectify their mistakes and come up with better
products, promises and testimonials, otherwise they may also have a similar fate.
They must not take the market as well as the competition and consumer for granted
because any wrong move or silence can destroy them to a limit which is hard for
them to resurrect.
About Nestle India
NESTLÉ India manufactures products of truly international quality under
internationally famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, KIT
KAT, BAR-ONE, MILKMAID and NESTEA and in recent years the Company has
also introduced products of daily consumption and use such as NESTLÉ Milk,
NESTLÉ SLIM Milk, NESTLÉ Dahi and NESTLÉ Jeera Raita. The Company
continuously focuses its efforts to better understand the changing lifestyles of India
and anticipate consumer needs in order to provide Taste, Nutrition, Health and
Wellness through its product offerings.
MAGGI – the brand
MAGGI noodles as a product has been a household name and was going strong
since three decades. Its positioning as an in between snacks for children was very
successful and with the times it was also accepted by students and young
professionals. Its availability has always been its strength and they were ruling the
markets based on its strength. According to the World Instant Noodles Association,
India consumed 5,340 million cups or bags of instant noodles in 2014. India was also
visualized as one of the fastest growing markets in the world in the snacks category,
and its turnover got doubled since 2010. MAGGI, today, accounted for a market
share of 70 percent and gave a contribution of 30 percent in the company’s annual
turnover (9000 crores).
Presence of MSG and Lead
The brand, MAGGI was among the top 5 most trusted Indian brands (according to
the last year’s Brand Equity survey). But, it got a big jolt when Mr V.K.Pandey an
officer with U.P’s Food Safety and Drug Administration came up with a report of the
presence of MSG (monosodium glutamate) and higher than permissible levels of
lead in its noodles. This report was challenged by Nestle, but the labs even came up
with another damaging report claiming that apart from the presence of MSG the lead
levels found in the sample was 7 times more than the permissible limits. On 30th of
April, the authorities in Lucknow ordered Nestle to recall a batch of noodles. The
company further claimed that they were not agreeing with the orders and were filing
the requisite representations with the authorities. But the controversy spread like fire
through social media and therefore became a full blown crisis. Nestle as an MNC did
not take it seriously. They thought that generally there are a number of complaints
which come in front of them from time to time and it will also die down soon. They
therefore did not do anything and started looking the other way. But information
spread like fire and MAGGI noodles were temporarily banned in Delhi, Tamil Nadu,
Uttarakhand and Jammu & Kashmir. Kerala took it off the shelves from all its
government shops, the army issued an advisory to its canteens against the product
and was dropped from its shelves by retailers like Big Bazar, Walmart, Hyper City
and online store Big basket.
Damages done to brand MAGGI
Already the damage to MAGGI was done through the Food Safety and Drug
Administration report and even when deep pocketed global multinational could not
do anything to weaken the brand.
Sales reported by Nestle’s Cost Nestle had to incur Brand Loss
flagship brand ( MAGGI) before because of recall
the ban
Rs 2000 crore
Rs 320 crore and Rs 640 Rs 1270 crore
crore penalty slammed by
the govt.
The controversy broke in May but for over a week, the company did not issue any
definitive statement to address the concerns of regulators or its consumer. The story
moved from local to national very quickly and the multinational company took time to
react. It got played out through a huge lot of publicity. The social media created lot of
fuel to fire.
Strategies adopted by Nestle
The first line of defence by Nestle was a four page PDF sheet with no company logo
and a highly technical explanation. Though they started posting it in social media
from 21st May but it was seen only on 1st of June. The consumers and the market
thought it as an admission of guilt by the company. Situations like this were not a
new phenomenon in the market. Even MNC of popular soft drinks in the country
were earlier blamed of presence of pesticides in it, but they as a company conversed
with the customer and never discontinued communication with their loyal customers.
Because whatever controversy happens, the consumers pause for a while and wait
further for clarity by the company. The brand therefore needs to come out and
engage themselves further to keep their dialogue going further.
Even at times there has been enormous disasters like the Union Carbide Bhopal gas
leak tragedy of 1984 or the verdict of the POSCO steel giant who faced for the
environment damage. But in those times the social media as well as the other media
was also not as active as we see today. But today, the scenario has totally changed.
The MNC who today operate in the market must therefore be adaptable to the
situation and care for the welfare of the public. They must not take their success for
granted as everybody is careful and conscious today. They cannot bring any of their
products and claim it to be the best without printing of the test reports or about the
substances or ingredients present in their products.
Missteps that led to product withdrawal
So, the total blame in this was on its social media strategy which was not properly
well defined. Their response was late. It is said that in the digital era today, being a
day late is like being a month late. Enough conversations started in the Indian living
homes and this was not good news for the brand. Their response had to be a press
statement and a few tweets. Tweeting automated responses and sharing heavy text
files with clarifications showed how they could not understand the functioning of the
micro-blogging site. When someone interacts with a brand online, it is sure that they
expect a human response rather than a robotic one. They therefore lost the plot by
posting PDF files there. Most twitter users access it through a smartphone and who
will see the PDF files there. The brand therefore risked it more by underestimating
the problem as food is a high priority item for all and the MAGGI brand in itself had a
deep mother-child relationship for many years. This convenience food was given by
the mother to their kids with lot of trust. Reassurance therefore was very necessary
to the mothers. Nestle being a quiet company never wanted to tom-tom itself and
wanted to take one step at a time. They never wanted to make this mess larger for
them because of their other food products like milk, curd, soya milk etc. which were
their gold standards.
Nestle did not had an inbuilt response mechanism to withstand and counter this
swelling crisis. They reacted late in reassuring both the regulator as well as their
consumers. For a week when the controversy first broke in May, the company did
not issue any definitive statement to address the concerns of regulators or their
consumers. Nestle officials held a press conference after almost two weeks when
the news broke. So, they might not have been at fault if the management had
provided communication and evidence to their customers and have also blocked the
negative campaigns being done for their product. Confusion after all has to be
confronted with possible communication and not be left to be discussed among the
consumers themselves. Their brand ambassadors were also scared of coming out
open and talking further as they were scared of being pulled into the legal imbroglio.
The leadership team might have come out openly and taken the ownership of the
problem. A press release or an automated tweet could not be the answer to such a
problem as the responsibility in such cases has to be taken by the company through
a human face for answering objections in regards to the quality of the product. The
consumers today are smart enough and they do not want to be taken for a ride and
look further for more transparency and responsibility by companies. A
communication must therefore be given by the company through a face and then the
management must say sorry to their consumers if necessary, to pacify and clarify
their doubts. They might have then easily found their loyalists and had an honest
discussion with them about this issue. This was very important for them as this
perspective of the brand would have become their first line of defence. This was
necessary for them as the credibility of their brand got damaged badly.
In 2003 reports surfaced about a few instances of worms in Dairy Milk chocolate
bars of Cadbury India Limited (now Mondelez India Foods Limited) , the company
launched a public relations campaign for the trade in two weeks. In three months
they revamped the entire packaging and also came up with a massive advertising
campaign featuring Amitabh Bachchan to reassure their customers about the safety
of their product.
Wake-up call for Multinationals
The processed food therefore needs an explanation further as the snacks promoted
by them are unhealthy-fried Maida noodles. This incident may take the consumer as
well as the discussion in another direction i.e. on the health plank. Once the lead and
MSG stories die down, the focus will changer further and this will impact the brand
more and more in metros as well as urban centres. The loss of MAGGI sales was
not transformed and transferred to other competitive brands which imply a distrust of
customers in the entire category. Now, the parents will think twice and check before
offering these products to their children. They will check all the health indicators in all
the brands available in the market. This is therefore a wakeup call for multinationals
that have dominated markets since decades and have flanked it by their sheer
money power. They must therefore not take the market; consumer and the
competition for granted and rectify their mistakes. They must also come up with
better products, promises as well as testimonials because any wrong move or
silence can destroy them to a limit from where it will be hard for them to resurrect.
MAGGI in this case started learning from its early mistakes and used its digital
channels to explain its customers as why the decision to withdraw their noodles has
been taken after the regulator response. They were ready to answer all the
questions which emanated in their consumers mind. They also explained the science
behind the reason for the ban in simple terms, so that the consumers can
understand it well
Who’s to be blamed the Company or the Government
The report given by the Uttar Pradesh Food Safety and Drug Administration
mentioned that it had high levels of lead as well as had presence of MSG
(monosodium glutamate). The reports later on gave a different picture where it was
again tested and found at permissible levels in different countries around the world. It
was later visualized that the way it was tested in India especially in most parts of the
country had errors. So, who is to be blamed, the company authorities who could not
visualize the surging tide against them or the testing authorities who tested the
wrong way.
Nestle filed a legal petition in June’2015 with the Bombay High Court seeking a
judicial review as they claimed that FSSAI order was passed without giving them a
proper hearing. The govt. Labs that tested their noodles for lead on behalf of the
FSSAI and some state FDA (Food & Drug Administration) were not accredited for
lead testing. The tests done by Nestle and an independent accredited laboratory
have found MAGGI noodles safe to eat. The tests done by food standards authorities
in six countries- USA, Canada, UK, Australia, New Zealand and Singapore also
found Indian made MAGGI safe.
On 30 th June’15 the Bombay High Court allowed Nestle India to continue exporting
MAGGI noodles. On 13 August’2015 the court overturned the government’s ban on
MAGGI noodles arguing that the move was ‘arbitrary” and in this the principles of
natural justice were not followed. The court therefore ruled that Nestle India can
bring the product back to the market if fresh tests are conducted in three accredited
laboratories on the existing samples and on freshly manufactured product, if found
safe. On 4 November 2015 all three NABL (National Accreditation Board for Testing
and Calibration Laboratories) mandated by the Bombay High Court found the
samples to be safe for consumption (with lead content in permissible limits. After 9
November’2015 Nestle made sales of MAGI noodles available once again in Indian
markets.
The food minister also slammed the FSSIA (Food Safety and Standards Authority of
India) for creating an environment of fear in the food industry. MAGGI noodles were
cleared in many more foreign countries and they also got permission from the
Bombay High Court to export Indian MAGGI noodles.
Silent Treatment by Nestle
The controversy spread like fire through social media. But Nestle didn’t cared much
about it and seemed unaccountable for it and assumed that there will be a response
mechanism. They used to get complaints now and then roughly around every three
years and they thought that this probably will also die down if they didn’t do anything.
But this was not a minor incident but Nestle looked the other way as it had
confidence in its product as well as on the strength of the brand. They came up via
impersonal and template based responses to consumers who keyed in the words
MAGGI with MSG. Its first line of defence was a four page PDF sheet with no
company logo and a highly technical explanation. They started posting it from 21st of
May and this came back to life only on 1st of June. The consumers in the critical days
were free to interpret the silence in whatever way they chose. A common
interpretation therefore was the admission of guilt by the company. For a brand
which was so strong and popular, the first thing required by the company was to
converse with its customer. Whether guilty or not, it didn’t matter but communication
must not have been broken by the company. The delay created suspicion in the
minds of the customer because whenever there is a controversy, the consumers wait
for clarity. The brand therefore must come out immediately after understanding the
situation, engaging itself further and then try to keep the dialogue going. Part of the
blame was in regard to their response and strategy of social media. They must have
immediately crafted a message over film or print and posted it there. But this much
loved product was given an assembly line treatment on Facebook and Twitter. They
did not had a well-defined strategy of communicating with their customers openly, by
giving the company a face and say sorry if necessary. They might have found their
loyalists after having an honest discussion with them. They might have given an
insight into the brand’s perspective and tried to make them their first line of defence
at a time when their brand’s credibility was damaged. Nestle did a campaign recently
around the theme ‘Main Aur Meri MAGGI’ and invited its consumers for sharing their
stories. This might have been a good base for them as they already had a database
ready of their loyalists, some of which may have already enjoyed the social clout.
They have then easily involved these loyal customers in the social media and might
have also tapped into numerous bloggers and people who were speaking up for
them and who were waiting to have an explanation from the company. Instead they
opted to be uncommunicative. They might have taken cues from the market
happenings around like Flipkart’s Big BillionDay Sale to the Air Asia crash where a
quick response from the management made a lot of difference. Nestle may not be at
fault but where is the evidence from the company, so that the consumers believe on
it. Responsibility needs a human face, not a press release or an automated tweet.
Remember the recent Air Asia plane crash, where their CEO himself was at the
forefront of the rescue work and he himself supervised the rescue operations
himself, talking to press and providing all the information and help. This resulted in
less backlashes for them as compared to Malaysia Airlines who also had a similar
accident before. The difference therefore lies in the transparency as well as
responsibility of the company.
Conclusion
When MAGGI noodles their top selling product with a major share in the total
company’s sales turnover was deemed unsafe in India. The company initially
defended its product and rejected all claims through all digital channels. They were
present on Facebook as well as multiple twitter accounts to reassure their customers
about the safety of their product. They responded to all the comments made to them
on social media. They also created a section on their main website to keep their
customers updated. But with the growing pressure the CEO had to announce the
withdrawal of the product from the market to comply with the regulators. Again
Nestle used the digital channels to explain their decision of withdrawal and the
science behind the reason for ban to their customers in simple terms. They also reassured their customers that the noodles are safe and that they are a transparent
company working closely with the Indian authorities to resolve this issue.
Maggi Crisis management case study- Part 1- Power
Of Public relations team
21st May 2015: Indian state puts a ban on Maggi product
1. India’s food safety administration and food inspectors ordered
Nestle India to recall its popular 2-minute Maggi
noodles stating the reason that the product contained high
levels of lead and MSG and it is unsafe and hazardous to
health
2. Nestle had dealt with this unprecedented crisis with a
Strategical approach:
3. Global FMCG Nestle they have circulated the below content
across the website and social media platforms
4. “The quality and safety of our products are the top priorities for
our company, we have strict food safety and quality
controls at our Maggi factory, 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.”
1st June 2015
Nestle across all social media handles Twitter, Facebook, and
website continues had kept its customers updated about day-today investigation status and reveals there is no excessive lead in
Maggi noodles
2nd June 2015
Nestle had reassured through running an interactive Question
and answer session by responding to every tweet on qualityrelated aspects:
·
Informative breakdown of ingredients
·
Lead and MSG levels
· Pre-prepared statement explaining that lead occurs naturally in
soil and water
·
FAQ’s
4th June 2015:
After re-assuring customers that its noodles are safe the brand
does a U-turn and decides to recall Maggi noodles produced in
India with a media statement of CEO Paul Bulcke
“We are working with authorities to clarify the situation and in
the meantime, nestle will be withdrawn from the shelves”
16th June 2015
Nestle destroyed $50 million worth of Maggi noodles
We will be discussing about the advertising strategies in the
upcoming episode…stay tuned
Nestle Maggi Crisis: Critical Analysis
Abstract
Whenever we think about Nestle, we think about a story about organizational
success. Since its inception in 1866, the company has seen rapid growth, profit, and
earned reputations all around the world. Even its company in India is doing
exceptionally well. Since 1959 Nestle has been operating in India. It is selling
noodles to a rice/wheat-eating country. Sells chocolates to people who are famous
for their sweets. Sells powder milk to a country obsessed with fresh milk.
Unfortunately, the company lost its reputation in India in 2015 and faced a never
before seen crisis. The 104-year-old reputation was inked when a lab found high
amount of lead in its most famous brand of noodles, Maggi. This finding lead to a
subsequent nationwide ban of India’s most beloved product. Nestle India faced its
worst nightmare. However, the company managed to jump back from the situation
and regained its once-held reputation. What’s more impressive about Nestle is how
they reacted in the face of its worst crisis. The way they solved their problem,
remained in business, and now growing faster than ever before is a case for study
and research. This paper delves deep into how the crisis began and how the
company efficiently and effectively came out of it.
Nestle Maggi Crisis
A Brief History
It all started in 1867 in Vevey, Switzerland. The founder of Nestle is Henri Nestle. It’s
first product was created as an alternative for mothers who could not breastfeed their
babies. It was called Farine Lactée Henri Nestlé. Within a few years it gained
popularity in the Europe.
At that time their main competitor was Anglo-Swiss Condensed Milk Company. The
companies merged in 1905, on that year Nestle also added Chocolates on their
product of foods. Initially they had factories in the United States, Britain, Spain and
Germany. And soon they started manufacturing in Australia, Singapore, Hong Kong
and Bombay. They faced some complications during the World War 1 but their
production boosted back after the World War.
By the 1920s Nestle was Creating chocolate and powdered beverage products. The
developed their one of the successful Product in 1930s Nescafe along with Nestea
and it became an instant hit. Nescafe became a main Beverage for the American
Soldiers in Europe and Asia. Their total sales increase by $125 million from 19381945 during the World War 2. After the World war they expanded their product line.
And within a matter of time Nescafe became one of the largest stock holders in the
market.
The First logo of Nestle in 1868.
Current operations around the world

Nestle and Starbucks will work closely together on the existing Starbucks range of roast
and ground coffee, whole beans as well as instant and portioned coffee. The companies
are working on a new innovation with the goal of enhancing its product offerings for
Coffee lovers globally. The agreement significantly strengthens Nestle’s portfolio in The
North American premium roast and ground and portioned coffee business.

Nestle launches free online chef’s academy with WORLDCHEFS. It will be a great help
for the aspiring chefs to take the first step. This academy is a partnership between the
World Association of Chefs Societies (WORLDCHEFS) and Nestle Professional
Academy is free of cost and accessible for anyone, no matter what their background is or
what skills they have.
·
Introduction in India
Nestle’s relationship with India dates back to 1912.After India’s independence in
1947, the economic policies of the Indian Government emphasized the need for local
production.
Nestle responded to India’s aspirations by forming a company in India and set up its
first factory in 1961 at Mega, Punjab, where the Government wanted NESTLÉ to
develop the milk economy. Nestle has been a partner in India’s growth for over a
century now and has built a very special relationship of trust and commitment with
the people of India. The Company’s activities in India have facilitated direct and
indirect employment and provides livelihood to about one million people including
farmers, suppliers of packaging materials, services and other goods.
Operations in India
The main operation of Nestle is to serve Good quality food. Nestle India
manufactures products of truly international quality under internationally famous
brand names such as Nescafe, Maggi, Milky bar, Kit Kat, Bar-One, Milkmaid and
Nestea and in recent years the Company has also introduced products of daily
consumption and use such as Nestle Milk, Nestle Slim Milk, Nestle Dahi and Nestle
Jeera Raita.
Nestlé India Head Office, Gurgaon,
Haryana
Nestle Contribution to India’s Economy
Nestle’s contribution to India’s economy till now is quite good. Their first factory was
created in 1961 in Moga. Their total sales are Rs. 7,546 crores as of September
2017 and their net profit after tax is Rs. 913 crores as of September 2017. Nestle
has given a major push to the dairy sector of the country and has developed the Milk
economy. Nestle is the market leader in various categories such as Infant Cereals
(96.5%), Instant Pasta (65.2%), Instant Noodles (59.5%), White Chocolates and
wafers (62.6%).
The Beginning of the crisis
Before Maggi was launched in India in 1983, nobody imagined that a snack can be
prepared in just 2 minutes. Within a short period of time it gained popularity all over
the sub-continent. It was mainly targeted for the middle-class families of the country.
Everything was going smoothly for three decades but then a storm struck in 2014.
On a laboratory in Gorakhpur proved that the samples of Maggi contained lead and
monosodium glutamate 1 (MSG) much beyond the permissible limit. Then several
state governments tested the samples and banned the product. Within a matter of
time Maggie was off the Market.
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
mislabeling. Also, it launched ‘Maggi Oats Masala Noodles’ without meeting the
appropriate norms of standardization. Maggi owned 80% of The market share in the
instant noodles segment. After the ban it dropped to 0%. The crisis was very serious
and it was state of emergency for Nestle India. Maggi’s all hard work of 30 years was
at stake. So, Nestle India had to take some necessary steps.
The Financial Downturn
As a result, Nestlé India slipped into a loss for its second quarter after being battered
by a national ban on its popular Maggi noodles due to safety concerns.
The Maggi meltdown would prove costly. Nestlé lost at least $277 million in missed
sales. Another $70 million was spent to execute one of the largest food recalls in
history. Add the damage to its brand value—which one consultancy pegged at $200
million—and the total price tag for the debacle could easily be more than half a billion
dollars. And the fallout continues. [image:
https://fortunedotcom.files.wordpress.com/2016/04/nestle-maggi-stock.png]
In a statement to the Bombay Stock Exchange, Nestlé India reported a net loss of Rs
644m ($10m) in the three months ending in June 2015, compared with a Rs 2.8bn
profit during the same period in 2014.
The loss of Reputation
With Indian Food Inspectors ordering Nestle India to recall a batch of Maggi instant
noodles identifying dangerous levels of lead and MSG (click for entire report), Maggi
(Nestle India) was caught into a vicious circle of bad reputation.
Maggi till date has been enjoying a brand that could connect people to not only a
product but to the whole concept. Maggi has become the other name for “Instant
Noodles”. Even if someone purchases Top Ramen Noodles or Sunfeast Yippe
Noodles, it would still be assumed as another type of noodles but not instant
noodles. At times Maggi is been sought for as a quick alternative to the staple food.
However, what problems the present crisis would create to Maggi is to be watched.
Due to the scandal, the internet had started talking more and more about the ill
effects of Maggi which is considered as itself a brand. This gave an opportunity to
rumor-mongers and gossipers to start talking more and more about the ill effects of
Maggi. Social media sites such as Facebook, twitter , and google+ were abundantly
supplied with information of what is good and what is bad and how Maggi (Nestle
India) is cheating its customers. Hashtags like #Maggi, #Maggi ban is being voiced
over in the internet. Famous mobile messaging apps like WhatsApp, WeChat, etc.,
will now spit the venom against Maggi.
The loss of Market Share
1. Nestlé India said its sales plunged by 20% in the second quarter, as a food-safety
scandal and a large-scale product recall weighed on its earnings.
2. [image: https://fortunedotcom.files.wordpress.com/2016/04/nes-05-01-16-printcharts.png]
3. Nestlé Noodle’s market share in India also took a nosedive from 63% in 2014 to 23% in
2015 due to the Maggi noodle scandal.
4. The Indian arm of Nestlé SA said its revenue declined to 19.34 billion rupees ($302
million) in the three months ended June 30th 2015, compared with 24.19 billion in the
same period a year earlier.
The loss of Public Trust
Due to the reports of the lead contamination in Maggi noodles, consumers lost their
trust on Nestle. Trust metric for Maggi noodles dropped to as low as 3% in 2015. On
top of all that, enraged consumers wasted no time venting their anger. In some cities
protesters in the street smashed and set fire to packs of noodles and photos of
Bollywood stars who were paid Maggi endorsers. One prominent newscaster
compared the situation to Bhopal, the worst industrial accident of all time, in which a
toxic gas leak at a Union Carbide pesticide plant in central India killed thousands of
people. From commanding 80% share of India’s noodles market, (as estimated by
Nomura Securities in May 2015) Maggi went down to zero in just a month.
Legal Ramifications
The Maggi sample which was tested contained more than seven times the
permissible level of lead—over 1,000 times more than the company claimed was in
the product. Due to this debacle, Nestle had to face several legal ramifications such
as the ban imposed on Maggi noodles for an indefinite period and it had to take all
Maggi packs — or 35,000 tones — off the shelves of about four million retailers.
Other nations such as Nepal indefinitely banned Maggi over concerns about the lead
levels in the product. Maggi noodles were subsequently withdrawn from the market
of five African nations: Kenya, Uganda, Tanzania, Zimbabwe and South Sudan.
Dealing with the crisis
The Uttar Pradesh food safety commissioner sent a formal notice to Nestle seeking
clarification on presence of MSG and lead in Maggi samples. The company did mail
its response along with its internal monitoring documents on 5 May 2015, but did not
take any proactive step to counter any possible aftershock. On 7 May, there was a
small news item on the episode in one of the Hindi newspapers in Uttar Pradesh.
Still, Nestle did not react. It never thought the news could lead to an estimated half a
billion-dollar loss for the company (including erosion of brand value) that would
shake the Swiss multinational and that the subject would be debated at length in
television studios.
Nestle failed to gauge the depth of the crisis even after national newspapers started
writing about it. It did not issue any statement till 21 May. And in its first official
statement, it said there was “no order to recall Maggi noodles being sold” and the
popular instant noodle was “safe to eat”.
On 5 June 2015, the day FSSAI asked Nestle to recall Maggi noodles, the
company’s global chief executive Paul Buckle met the regulators, and addressed the
media in New Delhi. Buckle said: “This is a matter of clarification and we need to sit
down together and clear the air… We will look into the safety concerns. We do not
add MSG in Maggi noodles… We apply the same quality standards everywhere.
Everything we do is keeping consumers in mind. We will do everything it takes, and
are fully engaged with the authorities.”
But by then, things had spun out of control. Buckle was left with little choice but to
recall the popular noodles from the market. The company got Luca Fichera, then
executive vice-president (supply chain) at Nestle India, to lead the recall process.
Between 5 June and 1 September 2015, Fichera’s team collected 38,000 tons of
Maggi noodles from retail stores, and destroyed them by first crushing the noodles
and then mixing them with fuel and burning in incinerators at 11 cement plants
across the country.
How Nestle managed to jump back
“Clinically dead”, is how the company’s India boss loves to describe the Nestle of
those days.
Swiss parent controlled Nestle India, makers of Maggi noodles, has made a strong
comeback to regain its lost ground in 2017 – nearly two years after it was forced to
withdraw its largest selling noodle brand from shops across the country following its
failure to meet certain food safety standards.
After two years, Maggi noodles commands a market share of 60 percent, having
regained most of its lost share during the ban days.
The brand equity and customer trust has been built over generations and this has
helped the brand bounce back after a near ‘death’ experience, Suresh Narayanan
had said in an interview to First post last year. After the five-month ban, in November
2016, Nestle India relaunched Maggi noodles in the Indian market.
The company is not just relying on Maggi brand, although it still accounts for a major
portion to its overall revenue. In the last few quarters, Nestle has launched several
products like Greek yoghurt, kids breakfast cereal Nestle Ceregrow, health food
drink Nestle A+ Pro-Grow, Nescafe RTD chilled Latte, everyday masala, Maggi Hot
Heads, and variants of Maggi noodles.
Going forwards, the company plans to launch Nespresso (a coffee machine), Dolce
Gusto (a coffee capsule system), besides products in pet care, healthcare and
skincare. Despite the planned launches, Nestle parent sells just 20 brands in India
as against its global bouquet of around 20,000 odd brands, a Mint report said.
The company wants to tap India’s top 600 cities that will account for half of the
consumption growth over the next 10 years or so.
Nestle’s current performance
Nestle is a story of organizational success. Even after its 2015 Maggie debacle,
Nestle managed to turn back from the disaster, and established itself as one of the
most durable companies in the world. Nestle India released the annual report for the
year 2017 (the food and beverages major maintain a January-December format). It
revealed, among other things, that the firm had managed to grow volumes in all four
product categories for the first time since 2010 — milk products & nutrition, prepared
dishes & cooking aids, beverages and chocolates & confectioneries — grew.
In the late afternoon of May 17, Nestle India’s stock was trading at Rs 9,865 a piece
at the Bombay Stock Exchange. In other words, the company had bounced back
from the biggest existential threat in its 104-year history in India.
In the quarter ended March 2018, domestic sales remained strong (up 10.9 per cent
year on year), primarily led by higher volumes across categories. Nestle’s domestic
growth was comparatively better than the growth reported by other large FMCG
players this far for the quarter,” analysts from Edelweiss said in May.
So, we can see that even after such a huge crisis, Nestle has managed to recover its
market share, profit and it is growing faster than ever before.
Innovating with existing products
Suresh Narayanan, chairman and managing director of Nestle India, who was
brought in to handle the crisis in August of 2015 said that they were innovating with
their existing products. Nestle has introduced six new variants of Maggi called
HotHeads. They have high levels of spice and they come in exotic flavors. There is
also Munch Nuts, a chocolate wafer with peanuts, and Nescafe Cappuccino readyto-drink premixes.
As Suresh Narayanan said, “We have launched 25 new products or variants since
the Maggi crisis. All of these are in the incubator. Some will gallop in the future;
others will canter, some may die. People ask me, what has changed? How did
Nestlé suddenly acquire this pace? We’ve never had so many product launches in
such a short time in the history of the company”.
Change in Attitude
Often times, success or failure of an organization depends on its attitude. The same
is true for Nestle.
Suresh Narayanan believes that the reason for Nestle’s recent success is its
changed attitude.
In one interview Narayanan said, “Today I see an attitude and mindset of growth.
There is an instinct growth opportunity among people working across verticals. Part
of this is reflected in our new motto of growth through innovation and renovation,” he
said. Earlier it used to take some two years to come up with a new product; now the
time has been cut to less than six months”.
“In the past we have had periods of rapid launches but could never sustain the
momentum,’ he added.
With its changed attitude Nestle proved what the former American professional
baseball player, Wade Boggs said, “A positive attitude causes a chain reaction of
positive thoughts, events, and outcomes. It is a catalyst and it sparks extraordinary
results”.
How the crisis affected the organization
In one interview the Chairman and Managing Director of Nestle India, Suresh
Narayanan said, “Nestle probably required such shock treatment as the June 2015
ban on Maggi noodles to jerk it out of its ennui”.
Narayanan had spoken about how the Maggi Noodles crisis was the most
challenging and dramatic situation in his entire professional career. Maggi is the
worst crisis that they have faced in the 104 years of their existence in India, also the
worst crisis the company has faced globally in a long time.
Narayanan also talks about the mood of the workers and employees of Nestle India.
He said, “The team was shattered. Our factory workers were extremely upset…. I
had an empty feeling. At that time, I realized as a leader, the weight of responsibility
on my shoulders is so big during a crisis”.
Change in Organizational Structure
Due to the Maggie crisis Nestle realized that the way things had been going on
needed to change. Nestle was quick to change with the changing situations. They
brought about changes to the decision-making process.
To increase focus on the market, Nestle has decentralized the decision-making
process by creating 15 verticals that now target specific geographies with their
respective hyper-local strategies.
Crisis and Organizational Culture
An organizations culture can give an estimation as to how an organization would
react if they faced any crisis. It is evident that during the face of crisis the strong and
weak cultures have an important role to play. Moreover, the rigidity or flexibility of an
organization’s culture will give an idea as to how soon an organization can overcome
its crisis or give into it.
Various studies have revealed that a multinational corporation with over a century of
presence in the country struggled to align itself to the complexities of the cultures of
the host country. In the case of Nestle India, whereas environmental variables such
as political economy and Westernization of urban India boosted the growth of its
instant noodles, the multinational company struggled to cope with the rise of media
corporatization, activist pressure.
It is evident that Nestle’s crisis response was governed more by its traditional
corporate culture than by an ability to keep pace with the changing demands of its
environment, leading to the amplification of an issue into a crisis.
So, we can see that multinationals that ignore culture will be forced to pay a heavy
price both in terms of reputation and finance.
Lessons for Management
The omnipotent view of management shows that managers are completely
responsible for the success or failure of an organization. Although that is not
completely true, Management in an organization bears the most important roles for
an organization to succeed. As the top-level management reap most of the profits
gained by the organization it is also their responsibility to see if anything goes wrong.
Besides the real competency of the managers are tested during a crisis.
Since its inception in India in 1959, Nestle India is a story of organizational success.
But, the 2015 Maggie crisis put them to their test in 2015. There are multiple lessons
for management here.

No matter how successful an organization is they can always face crisis

Consumers won’t remember the years or hard work and service, rather they will
remember that one mistake the organization made

Public trust is easier to lose than to gain

In the cutthroat world of business no one is truly your friend

You should always be prepared for change
Nestle realized this during their 2015 Maggie crisis. Fortunately, they bounced back
from their state and is now performing better than before.
Lessons for students
As business students, we are learning various theories about how business is
operated. Without practical knowledge these theories are not much of help. The
story of Nestle has a lot to teach to us students also.
Analyzing its 104-year history and ways of operation, we cannot but marvel at the
success of an organization. In a rice country they make noodles; in a tea country
they sell coffee; in a sweets country they sell chocolates; in a fresh milk country they
sell powder. They must be doing something right.
However, the 2015 scandal was a shock for all. What makes this company different
from others is how they solved their problems and overcame the crisis. Nestle’s
crisis management should be a case study and a matter of research. We as students
learned a lot as to how the role of Management, Culture, Commitment and attitude
can take a company to the top.
Case Study | Maggi Ban – Crisis And Repositioning
In India
Maggi is a well-known brand that everyone knows. It is a brand that needs no introduction. Since
1947, the Nestle brand has included instant noodles, seasonings, and soups. Among all of its
products, Maggi was the first to introduce protein-rich vegetable dinners to the market, followed
by prepared soups. 1983 was a watershed moment in Indian history since it saw the introduction
of Maggi instant noodles.
Maggi has typically remained in the spotlight for its flavor, and it has become the preferred snack
of the majority of India’s people. Maggi, on the other hand, was in the news for a variety of
reasons at one point in time. The major reason was poor promotional activity owing to the
presence of monosodium glutamate (MSG) and dangerously high levels of lead in the packets
examined by FSSAI. The customer’s trust was shaken as a result of this. As a result of this
uproar, many parts of society were concerned due to the involvement in the health of children in
this case.
In what way the commotion originated?
After the proximity of pesticides in soda, the Nestle Maggi two-minute noodles emergency has
ballooned up as India’s most exceptionally awful nourishment concern. The uproar over Maggi,
one of India’s most popular snacks, drew attention owing to rising consumer health concerns.
Maggi noodles were sued in India for alleged violations of food security standards following a test
by a state government lab that discovered the presence of MSG (a chemical that Nestle stated it
did not put to their item) or higher levels of lead. Regardless, they rejected these results, despite
the fact that further testing by administrative labs in several states revealed conflicting results.
Despite the company’s confidence in Maggi’s safety, the Delhi municipal administration imposed
a ban, signaling that other state governments should follow suit.
The disappearance of Maggi was a significant disappointment for Indian customers who still had
a soft spot for the product and were unable to let it go. The fall of Maggi was not caused by any
external causes, but rather by the product’s inherent characteristics, such as an increase in lead
content, which harmed customer health. Nonetheless, despite the product’s dramatic decline,
Maggi survived. They turned this catastrophe into a learning experience for their future
endeavors. Maggi recovered its shelf position by thoroughly rechecking its product and its
components.
Maggi has held the market top position since its inception. However, Maggi’s fall phase saw the
development of then-market followers contending for the position of market leadership.
The re-emergence of Maggi in the market drove its competitors to second place, recovering and
retaining market leadership due to the overall influence that it has always had on the Indian
market. Nestle has been on a firefighting strategy since the Maggi disturbance became press
headlines, by making this crisis scenario a point of learning for their future endeavors. Without a
doubt, the brand’s reputation was harmed; it took some time for the brand to restore its strength
and return to the shelves, leaving all of its competitors in the dust.
Discussion of Maggi
Pre-ban period
From the government to law enforcement, there was an all-out onslaught against Maggi. The
government of India has filed a claim for damages from settle after allegations of excessive lead
and MSG (a flavor enhancer) in Maggi prompted a nationwide inquiry. They become heated up
over Nestle Maggi 2-minute noodles being hailed as India’s worst nourishment apprehension in
ten years, following the presence of chemicals in soda pops. It was a real issue of general
wellness, and the legislation allows us to take self-made legal steps against blundering’s
elements official from the national purchaser question redressal commission.
Following recurrent quality testing and meetings with settle supervisors, the Food Safety and
Standards Authority of India (FSSAI) ordered a nationwide assessment of the Maggi.
Reporting of the issue in social media
As the feud between Nestle and the FSSAI heated up, TV channels, newspapers, and other
social media platforms in India gushed over Maggi as if it were one of the year’s greatest stories.
News stories were released with headings such as, “Maggi under regulatory scrutiny for lead,
MSG above permitted limits; Maggi treachery has crushed our good Indian hearts; Maggi
demonstrates Indian customers are taken for granted,” and so on. The emotional connection with
Maggi at its customer interaction, along with the uproar over contradicting test results and the
public’s lack of awareness about food regulations, gave the media a chance to sway public
opinion. Maggi was subjected to a media trial prior to its seizure.
Just as conventional media reported the topic widely, social media exacerbated it. The growth in
the dominance of social media players such as Facebook and Twitter has aided in the
transmission of news, regardless of its validity.
This has apparent ramifications for Nestle: a heated debate on a contentious topic might spread
quickly.
Maggi sales have dropped, with big metropolitan stores reporting a 15% to 20% drop. Nestle
India’s shares plummeted 15% between mid-May and early June.
Ban period
Nestle Maggi has been in firefighting mode since the news broke about unsavory additives in
Maggi. The brand’s reputation suffered greatly as a result. Maggi noodles sales have suffered
significantly when it was discovered that the samples examined by government laboratories
included unnecessary substances such as lead and MSG.
Because of the Maggi prohibition, the manufacture of Maggi ceased, affecting suppliers. Around
1500 people in India involved in the production of Maggi were impacted by the suspension of
production following the Maggi ban. The impact of Maggi’s demise was felt by the stock market
as well.
After ban
Maggi has long been one of India’s most popular snacks. It was typically kept in the news for its
flavor.
During the prohibition time, the organization did not dismiss any of its changeless laborers but
rather engaged them in various activities like planning, group development, and so on.
However, it should be noted that definite procedures, values, and ethics have varied meanings
for different types of businesses. Maggi has long been a market leader, accounting for 80
percent of the consumer market. Market leaders are frequently perceived to be able to create
their brands and utilize their brands based on well-defined procedures within the company in
order to persist.
Relaunch of Maggi
On October 26, Nestle resumed assembling Maggi noodles, which entered the market after
receiving approval by food testing labs. Nestle reintroduced Maggi noodles to the market after
the Bombay High Court removed restrictions on all nine Maggi varieties.
Within seven days of Nestles Maggi noodles being reintroduced to the market, the nation’s main
nutrition controller – FSSAI – moved the supreme court against the Bombay high court’s order
that allowed the noodles to be reintroduced. However, it should be noted that Maggi passed the
first round of testing on October 16, 2015, allowing Nestle India to continue manufacturing the
item. The second round of tests on newly manufactured groups also declared the item safe for
human consumption. At regular intervals, a few Maggi samples were tested.
Snapdeal sold 7,20,000 units of Maggi noodles (twelve-packs) at its debut, with 60,000 units sold
(welcome unit). These well-received packages included a Maggi date-book 2016, a Maggi ice
chest magnet, Maggi postcards, and a welcome return note. It quickly grew to 3.9 million retail
locations.
Conclusion
A market-based crisis may occur as a result of numerous reasons such as economic, political,
socio-cultural, technical, and competitive pressures. These variables impact the shift in market
operations, necessitating a change in the firm’s actions. They function as an influence and
determine their severity depending on the influence’s breadth, degree of impact, range of impact,
response gap, the timing of interaction factors, and so on.
PR Crisis Management Lessons from the Nestlé
Maggi Noodle Controversy
Nestlé India hopes to finally recover fully from its 2015 PR crisis
caused by charges of excess levels of lead in its Maggi noodles. It’s
been a long slurp. Once the top-selling noodle in India with 75
percent of the market, Maggi has regained 60 percent market
share and hopes to fully regain market share by the end of the
2018.
Indian regulators banned Maggi noodles in April 2015 after its tests
found excess lead in noodle samples. The company had to remove
Maggi packs, all 35,000 tons of the product, from store shelves. A
court ruling overturned the ban in August, but Maggi’s reputation
was severely damaged and regaining sales was difficult.
Known for its two-minute cooking time, the noodle brand has taken
more than two years to restore trust, regain sales and rebuild its
damaged reputation.
What Maggi did Wrong: PR Crisis Management Lessons
To be fair, the company faced substantial challenges: fearful
consumers, an aggressive media, tough regulators, and the difficult
business climate of India. However, PR crisis management experts
and other commentators said Maggi committed a number of
mistakes that can serve as lessons to other organizations.
Neglected public opinion. Maggi focused on the technical and
regulatory aspects of the crisis while neglecting communications
and public opinion. In its main defense, it stated that’s its tests of
over 3,500 samples showed that lead levels were well below
regulatory limits.
“This is a case where you can be so right and yet so wrong,” said
Nestlé CEO Paul Bulcke, according to Fortune. “We were right on
factual arguments and yet so wrong on arguing. It’s not a matter of
being right. It’s a matter of engaging the right way and finding a
solution.”
Slow response. While Indian officials first ordered the product
recall on April 30, 2015, the company did not address the media in
Delhi or appoint a lobbying firm to represent it in India until the
following June. Media monitoring and measurement could have
alerted the company about the fast-growing, troublesome media
coverage and helped it respond. “Nestlé was clearly caught with its
noodles in a knot,” said B.N. Kumar, executive director of Concept
Public Relations and national president of the Public Relations
Council of India, in a Knowledge@Wharton article.
An appearance of arrogance. Nestlé argued that its own test
results of Maggi noodles were correct, which prompted
confrontation with regulators who found different results. Nestlé
could have pursued a more engaging, transparent process. Jessie
Paul, founder and CEO of Paul Writer, suggested that it ask Maggi
India personnel to become involved with testing, obtain third-party
witnesses, or split the same samples across multiple labs.
Lack of consumer engagement. The Nestlé team was slow to
respond to consumers on social media. Many Indians perceived its
silence as admission of guilt. The Nestlé India Twitter handle had
one tweet on May 21 on the issue. The Maggi India Twitter handle
engaged only on June 3. Social media monitoring could have
provided vital insights into consumer sentiment and identified the
emerging PR crisis.
Lack of foresight. Company officials did not have a crisis
management plan. They did not, or could not, think ahead or plan
for contingencies. While they communicated with government
officials about test results, they did not consider alternative
strategies.
Overlooked cultural factors. Maggi did not consider the social and
political issues of a PR crisis in India, a country colored by its
colonial past and skepticism of multi-national corporations.
Media relations inadequacies. The company long favored a
reserved media relations approach and lacked strong media
relationships or even a system to access journalists.
Overly complex answers. Some public communications were too
complex when they should have been brief and simple. In
particular, a statement on its website stating that its noodles were
safe was too difficult to find and not immediately understandable to
ordinary consumers.
“In trying to break down the problem to its constituent elements and
be very specific, Nestlé has compromised on the main deliverable –
a simple, positive, BIG SAFETY message,” said Soumitra Sen of
Brick to Click CXO.
The Public Relations Recovery
The company tapped Suresh Narayanan, chairman and managing
director of Nestlé India, to guide the brand to recovery.
The company introduced scores of new products and variants to
build a balanced portfolio and reduce dependence on a single
product. They included six new variants of Maggi called HotHeads,
a chocolate wafer with peanuts, and ready-to-drink premixes.
Narayanan also increased the company’s emphasis on health and
nutrition, simplified the corporate structure and increased
advertising. But the main ingredient for success was improved PR
and communications.
While test results of noddle samples technically caused the crisis,
company executives realized that its main problem had been
shortcomings in communications with the public, the media and
other stakeholders.
“The priority was to rebuild the trust and reputation block-by-block
by engaging and communicating with stakeholders transparently
and constantly,” Narayanan wrote in Fortune India, crediting
employees, partners, distributors, suppliers and consumers. “We
also engaged with the regulatory authorities to ensure that our point
of view was considered.”
The company substantially increased its communications staff. It
now has people in each state to engage with local regulators and
government authorities and has a new team for communications
and public affairs at its head office.
Bottom Line: The Nestlé’s Maggi PR crisis in India demonstrates
several crucial public communications lessons. The controversy
over allegations of lead levels in noodles proves that
communicating the facts well is just as important, if not more
important, than the facts themselves. That’s a lesson Nestlé
executives in India learned the hard way.
This post was originally published on May 5, 2016, on
the Glean.info blog and updated on Oct. 4, 2018.
Schedule a Free Online Demo of the Glean.info Media Monitoring
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A two year crisis for the ‘Two Minute Noodle’: Maggi!
Before the pan-India ban on Maggi, the company (Nestle) owned almost 80% of the
consumer market of instant noodles. Not only did the ban bought down the numbers
to a whooping zero percent, it damaged Nestle’s image tremendously! The fiasco
and the entire meltdown was hidden from none.
The Crisis:
The crisis that Nestle faced is already well known to most of us. In a nutshell, there
were two major developments that caused this meltdown:
1. The regulated lead levels during that time was 2.50ppm and a laboratory in
Gorakhpur found the lead MSG levels in Maggi to be 17.2ppm. Yes, THAT huge a
difference!
2. Not only did they breach the regulations, but also explicitly mentioned “NO added
MSG” on the packets, leading to a mislabeling offence.
As reported by a LiveMint article:
Interestingly, Nestle could have settled the issue according to the law under
the regulations with the Uttar Pradesh food safety department by paying a
penalty of Rs3 lakh as the Maggi sample contained MSG even though the
pack said it didn’t, making it a punishable offence.
Nestle itself named this as one of the “biggest crisis” the company had faced in the
32 year-long standing history in the subcontinent. Did Nestle fail to gauge the depth
of the crisis despite it being the headline of 2015 or did they assume that ‘health risk’
would not be that big a deal in India?
The Immediate Aftermath:
The response from Nestle was directed more towards establishing a defense on the
basis of technical aspects. They claimed that they have tested 3,500 samples of
Maggi and the results of lead were in the set regulations. They were fighting to be
‘right’ in the battle, rather than looking at how to make it right! It was argued that the
lead content was in the raw materials of the noodles. This argument nonetheless
failed to talk to the audience, it only made Nestle look more guilty. A lot of leading
PR professionals call out the initial response from Nestle for its lack of ’empathy’ and
timeliness to the consumer.
In fact, when a similar crisis had hit the famous Johnson and Johnson in the United
States where Tylenol poisoning was associated with the brand, the brand voluntarily
took the products off the shelves. This gave the brand a very good image in the eyes
of the public- as a cautious brand striving only to provide what’s best for the
customers. Inversely, Nestle waited for the government to issue orders and for things
to escalate to a ban.
While some supported the ban, some mourned the taking away for their favorite
instant snack that was almost a part of their daily life, some politicized the move,
some saw it as a publicity stunt – for better or for worse, everyone had an opinion
about it. Like the famous saying goes, you could be in for this ban, you could go
against it, but you just couldn’t ignore it. Thus, the stakes at risk for Nestle were
more than economic, their most important stakeholder felt attacked – the consumers
were talking!
Ban on #Maggi for emotional Indians.. would be like snatching away a candy from a
kid’s fist! To hell with the MSG content in it! #maggiban
— Ankit Naik (@ankinaik) May 20, 2015
There was no media briefing or a public statement by Nestle until two months after
the ban. This gave media the chance to fuel and consumers the chance to question
the ongoing crisis. Social media often becomes the most intimate and most active
medium of communication between the consumer and the producer. Here, Maggi
India and Nestle India’s Twitter handle’s silence on this issue until June was only
worsening the situation. One of the first response from Nestle’s end on this matter
via social media handles was the official announcement of withdraw of the products,
of course, while still claiming that they are ‘right’!
The damage was increasing, sales were going down, Nestle was loosing it’s strong
consumer base, the media and competitors didn’t cease to take advantage of the
crisis – The Nestle team was in hot soup! Things were slipping out of their hands,
just as their noodles once used to keep slipping off the sleeves and on the
consumer’s kitchen cabinet. What was till now looking like a classic case of what not
to do in a crisis was soon upturned into what the Indian PR industry now regards as
one of the most interesting crisis management case for it had it’s own ups and
downs.
Mr. Suresh Narayan was leading the helm of affairs for Nestle operations in the
Philippines and Egypt. He was called to India and handle the situation here. There
was no looking back! Frequent press conferences were organized and now the main
challenge was to stay connected with the audience, publicizing a product that is
currently banned. Nestle did not let us forget Maggi, it kept assuring the media and
customers that the product is going to come back very soon. The company stopped
running away from the crisis, they addressed it. This was done by actively engaging
with the audience on social media and adding a section dedicated to updates about
Maggi on their website. They refused to let people forget of the product and the
emotional value it once had for them. #WeMissYouToo was one such campaign that
personalized this response from the brand. Videos, comments, posters, everything
went into the making of this sense of connection that the product didn’t lose despite
going off the shelf:
The re-launch of Maggi happened strategically on the auspicious day of Dhanteras,
very close to Diwali. The relaunch campaign saw television ads stating “Maggi safe
thi, safe hai.” The comeback of Maggi made it to the headlines with being all sold out
within a few minutes from it’s launch on Snapdeal. Additional offers to the product
were also made from Snapdeal’s end to boost the sale.
Soon after, again directly aiming at the consumer’s emotional belongingness to the
product, Nestle ran a campaign asking what does Maggi bring back with it? A rather
smart move making the product synonymous to memories, habits and events of
one’s life. #WelcomeBackMaggi was soon trending, both online and offline.
The sales were up, the campaigns were successful, all laboratory tests were cleared
but the way up to the original lost position happened with time. 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, Maggi’s PR team decided
to again hit back with another campaign titled #NothingLikeMaggi, asking customers
to share their ‘Nothing Like Maggi moments’.
By 2016, the Nestle sales were doing better with a 57% market share. But, it was
only in 2018, that it was reported that Maggi had finally claimed 75% market share,
thus almost achieving the lost share ratio. The road between the end of 2015 and the
mid of 2018 has been certainly bumpy for Nestle. They learned the importance of
timely crisis management the hard way and nonetheless managed to do some
damage control with the coming in of their saving grace, Mr. Narayan.
Nestle Now Shifts From Crisis Management To Image Building:
After reclaiming it’s lost territory in the market, Nestle India has more recently
adopted a very positive socially responsible aura to it’s brand-something that was
missing in the initial phase of their crisis management of the Maggi. The more recent
campaigns of the brand focus on rural development, women entrepreneurship,
healthy living, to name a few- perhaps, another case study to be digged into soon!
CRISIS
MANAGEMENT
CASE
STUDY:
NESTLÉ’S
MAGGI
NOODLES BANNED IN INDIA
At the end of May 2015, India’s Food safety
administration (FDA) ordered Nestlé India to
recall its popular 2-minute Maggi noodles after
tests showed that the product contained high
levels of lead and MSG. This case study looks at
how the situation developed, and how Nestlé
reacted and managed the situation using
multiple digital channels.
A statement on their website said that “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.”
1st June – Nestlé re-assures customers its
noodles are safe
Nestlé continues to keep its customers up to
date on the investigation into the safety of Maggi
noodles in India. On the official Maggi noodles
India Facebook page, Twitter and website,
Nestlé states that extensive testing reveals no
excess lead in Maggi noodles.
21st May 2015 – Indian state orders recall of
Maggi noodles
Indian food inspectors order Nestlé India to
recall a batch of Maggi Noodles from the
northern Indian state of Uttar Pradesh claiming
that tests have found Maggi instant noodles
“unsafe and hazardous” and accused Nestlé of
failing to comply with food safety law.
Nestlé response:
The initial response from the global FMCG
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.
2nd June – Nestlé interacts with customers on
social media thanking them for their support
Nestlé uses Twitter and Facebook to answer
customers questions about the levels of MSG
and lead found in their noodles. The company
continues 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. As well as Nestlé
explains the science behind the tests, what lead
and MSG are and gives an informative
breakdown of the ingredients in their product.
@MaggiIndia 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.
3rd June – Nestlé launches a FAQ page on the
official Nestlé website
Nestlé continues to engage in an active dialogue
with customers on social media channels
Facebook and Twitter. As well as this the
company created a FAQ page on the official
Nestlé website to answer all questions.
4th June – Nestlé backtracks and recalls all
Maggi noodles from India
After re-assuring customers that its noodles are
safe, the brand does a U-turn and decides to
recall Maggi noodles produced in India. Nestlé
CEO Paul Bulcke spoke to the media and said that
“We are working with authorities to clarify the
situation and in the meantime Nestlé will be
withdrawing Maggi noodles from shelves.”
16th June – Nestlé to destroy withdrawn
noodles
Nestlé decided to destroy more than £32million
($50million) worth of Maggi Noodles in India
after they were deemed unsafe by regulators.
3rd July – Testing on Maggi noodles abroad
finds levels of lead are within food safety levels
After the food safety scare in India Maggi
noodles have been tested in other parts of the
world to reassure consumers that they are safe.
Results from noodles tested in the UK found that
levels of lead in the product are within EU levels.
Shortly after the UK results were published,
Canada also cleared Maggi noodles as safe.
Questions:
1) Elaborate on the business environment faced
by Maggi during the time of crisis.
2) Is the use of social media for damage
limitation a good idea for a company like Nestlé
in today’s times?

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