The Hindu Business Line : Nestle’s Maggi matters

It made the phrase ‘Bas 2 minute’ iconic. It wooed mothers with the promise of ‘fast to cook and good to eat’ snacks. It added that bit of ‘different’ to the popular ketchup. And offered “health bhi, taste bhi” through its no-MSG soups. Yes, we’re talking about Nestle’s iconic brand, Maggi, in its various avatars of instant noodles, sauces and soups.

What most people are unaware of is that Maggi has been Nestle’s flagship culinary brand not only in India, but globally as well. On the international front, it is primarily seen as a brand of dehydrated cooking aids that has gradually migrated to being a general savoury brand with several ready-to-eat meal variants and frozen foods.

Maggi, however, in India is best known for its flagship product of instant noodles with its various desi sub-segments such as the traditional dal atta, veg atta and rice noodles along with their various variants, Curry, Masala, Tomato, Chicken in the traditional and Shahi Pulao, Lemon Masala and Chilly Chow in the rice noodle segments. In fact, the culinary brand comprising nine instant noodle products, eight variants of sauces and twelve variants of soups has grown at 33.2 per cent, almost six per cent faster than the company’s other rapidly growing category, chocolates, during the third quarter ending September 30, 2007.

While extolling the virtues of the brand, Martial Rolland, Nestle India’s Chairman and Managing Director, says, “Since the packaged food business is still very small in India there is naturally a greater growth potential in this category than the others. According to numbers announced by the publicly listed companies, the growth is around over 15 per cent overall. However, for us, Maggi has done very well. It is a business that we are very proud of and believe that we have done a fairly decent job in.”

Nestle unleashed Brand Maggi in India almost 25 years ago in 1983 with the launch of its traditional ‘2-minute noodles’ in its masala, tomato and chicken flavours, followed by its curry flavour some years down the line.

Martial Rolland, Nestle India’s Chairman and Managing Director

“We launched Maggi in India at a time when the instant noodle was not that well known a category. At first it started as a non-entity.” Outlining the market conditions then, Rolland explains, “Though the market in the Eighties was beginning to change, within the noodles category, all that had caught the consumer’s fancy was Chinese noodles. I think what we did very well was in understanding what was happening with the consumer.

“There was a key need for a product that provides good quality food and at the same time was convenient. Something that allowed the mother to add her own inputs like vegetables and so on, but at the same time keep it convenient.”

When Nestle India launched Maggi in the country, it used the tagline, ‘Fast to cook and good to eat’, to not only promote the product, but also to educate the ever growing aspirant consumer about the advantages of using it.

Talking about Maggi’s runaway success in India that also created the ‘instant noodle’ category in the domestic market, Rolland elaborates, “In the beginning, I think it was good understanding of the consumer that helped us pursue our dream of making the instant noodle a big one. The jingle we used for the Maggi instant noodles campaign was pretty catchy and went down well with our target audience, children.

“However, in some areas, we were ahead of our times. For example, we launched a sweet kind of noodles that didn’t work. It’s not that everything always works. But what has pulled us through is the fact that we have been able to be ahead of what the consumer wants.”

Having gotten cash registers ringing with the traditional Maggi offering, Nestle did something it was best at — gauge the needs and requirements of the consumer in-depth. It was then that it decided to evolve the instant noodle category further, while retaining the company’s DNA focus of wellness and nutrition. “What we have done is worked towards improving further the goodness quotient in our products,” points out Rolland. This was followed by a series of innovative launches.

The company moved away from the ‘not-so-healthy’ maida to make its noodles, and launched the Maggi Veg Atta noodles followed by the Dal Atta Noodles and finally, the very recent rice noodle variants.

“It wasn’t just these launches. We also enriched our traditional range with more calcium and protein so that our primary target group, children, got 20 per cent of their required dietary allowance from our product itself. We really pushed the ‘Taste bhi health bhi’ concept and now it has become synonymous with Maggi.”

Nestle, however, has no immediate plans to foray into the ‘cup noodle’ version. The Nestle India chief says, “Maybe the future can change. Our focus for sometime will remain on further evolving our current product portfolio.”

And evolved it has. After instant noodles, it launched its ketchup and Maggi Hot ’n Sweet sauces in the mid-Eighties.

Though the market then was crowded with other offerings from players such as Hindustan Unilever’s Kissan and Heinz, as well as smaller regional players such as Tops, the launch of Maggi sauces gave the industry the much required twist in the tale. It was only after Maggi jazzed up the sauces segments with its Indianised, chutney offerings, throwing up a whole range of possibilities, that the other players followed suit.

The company also followed up these launches with the ‘It’s different’ ad campaigns. Rolland explains, “Two years ago we went back to our popular Pankaj and Javed characters to communicate our intentions as far as Maggi sauces were concerned. They both fit very well with the whole ideology of our sauces. There is a certain level of irreverence between the gentlemen and the brand.”

Nestle recently launched a new campaign featuring Javed Jafferi for the localised chutney variants of Maggi sauces, including the Teekha Masala, Khatti Meethi Imli and Pudina variants along with the more recent Oriental flavour.

“Though through these Indianised versions Nestle tried to compete with the homemade versions, it proved to be successful since it was a convenient option that one can use as a quick dip mainly for snacks,” he said.

On soups, its recent star performer, Rolland said, “We have done a huge amount of work here with regards to taste and health. Clearly we have a product that is very superior in terms of taste and nutrition.

“The company has been extremely careful to give each of these soups a special twist and taken care not to add any MSG (monosodium glutamate/ ajinomoto), a flavour enhancer.”

Even within this category, Nestle has managed to home in on what the consumer wants. As he explains, “Soup is still a very seasonal product. It is only after Diwali and with the onset of winter that people start consuming soups. Therefore, besides our classics such as Thick Tomato, Sweet Corn and Clear Chicken, we decided to come up with an Indianised, purely wellness-oriented range that included soup flavours such as cook-up soups, and we try to make sure that suits the consumer palates. That’s why we came out with the healthy Sanjeevni range consisting of flavours such as amla, badam, spinach, dal and tomato.” In fact, with the consumer turning more global and becoming aware of the health benefits of the category, the opportunities have just expanded for Nestle.

On future plans for Maggi, Rolland is quick to say, “As we have earlier, we will even now try to remain very close to the consumer and see what his or her wants are. Also, our focus will be on launching products that have good potential for growth. We will also keep up our level of activity for the different categories of the brand, as well as leverage the parent company’s expertise for innovative insights into further developing the brand.

“Nestle worldwide spends a lot of money on research and development to give consumers what they want in terms of taste, health and convenience. At the end of the day consumers don’t buy strategy but good products.”

Analysts agree that Nestle is getting it right. Nikhil Vora of IDFC-SSKI Research, in a research report, expects the ready-to-eat segment to remain the biggest opportunity for Nestle India in the years to come. “This SBU (contributing 21.4 per cent to revenues) has reported revenue growth of 33 per cent in January-September 2007. Growth in the business has been driven by a series of new product and variant launches under the Maggi brand.

“We see the growth momentum accelerating from here as Nestle extends the brand equity of Maggi to newer segments and widens its distribution reach.”

Nestle, he continues, is the best bet on the India consumerisation story as the product categories it operates in such as milk products, prepared dishes, chocolates and coffee are expected to be the fastest growing segments in the coming years.

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Nestle’s Maggi matters