A question of trust

There was not just condemnation. There was disappointment too. Grim jokes and laments that read like dirges marked the news of contamination and recall of a batch of Maggi noodles by the Uttar Pradesh Food Safety and Drug Administration, in the social media world.

Nestle India, Maggi’s manufacturer, has denied the charges and said it is getting the results verified by an independent accredited laboratory. The batch in question was produced in February 2014 and its best-by date was November 2014, so the company is confident that no stocks remain in the market as it takes back unsold stocks from distributors and retailers close to the best-by date.

Predictably, this piece of news has raked up issues and questions that come up every time there is a scare: abuse of consumers’ trust, the pros and cons of eating processed and packaged food, the ethics of multinational companies, following the law in letter but not in spirit in matters of labelling, and so on. Maggi Noodles have been available in this country for about 30 years now. Will this event erode the goodwill the brand has earned over all these years?

Maggi is not the only brand, nor the only food brand, to have gotten into trouble. Pepsi and Coca-Cola had to deal with allegations of pesticide contamination and Cadbury India had to address the issue of worms being found in its chocolates. All are names with strong brand equity and because of that, as well as remedial action, they bounced back, point out marketing experts.

Future prospects Consumption may be affected, in the long term, as part of this movement against what people see as unwholesome and unhealthy food such as chips, soft drinks, sodas and other processed products, says Hamsini Shivkumar, co-founder, Leapfrog Strategy Consulting.

Maggi is too strong a brand for the public at large to believe it’s been so negligent with its manufacturing, she adds.

“The stronger the brand, the easier it is for the consumer to forgive it. The business may go down, as Apple’s did when Steve Jobs left — and revived when he returned, but that’s because it was an inherently strong brand,” says Raghu Viswanath, founder of brand advisory firm Vertebrand.

There’s enough empirical evidence to state that it’s among the 20-25 top brands in India, he adds. In the short term, sales may be affected as mothers will become more cautious, but these things are bound to happen. There have been so many recalls, across categories, involving strong brands, but they have not been wiped out, he says, giving the example of Toyota, which recalled nearly a million Prius cars last year.

Contaminants can come from raw materials, one of the most significant cases being the discovery that even mother’s milk was not exempt – it was found to contain DDT, the insecticide, across the world, notes Alpana Parida, president of brand strategy and design firm DY Works.

She makes several points about Maggi and brand equity: while being an inherently strong brand, it has never been seen as a centre of great nutrition. People expect a brand such as Nestle to get its labelling right, being associated with baby food, water and consequently, with purity.

Also, when people love a brand, trust comes back. “And taste is the hardest thing to shift. Maggi itself has struggled with the issue. Whatever it has done with its variants, people still love the Maggi Masala noodles,” she points out.

Setting it right What should Nestle India’s next step be? Has it done enough yet to assuage people’s concerns?

Parida does not think so. “Their consumer-facing PR has not been adequate, it should have been much more forceful and should have had more clarity,” she says.

Leapfrog’s Shivkumar points to the Cadbury and Nokia (about 46 million batteries were recalled between August 2007 and January 2008) instances where the companies launched major damage-control campaigns, part of which involved roping in Amitabh Bachchan and Shah Rukh Khan to tell people through advertisements that steps had been taken to set things right again.

“It’s a bit of a moot point as to what extent Nestle should go. In this age of social media, if you err on the side of over-communicating, you will not just retain but strengthen consumer trust. It may not die down if you ignore it. Nestle should use this as an opportunity,” she says.

Nestle should not rush to apologise but assess the situation and own up and make amends if it finds it is in the wrong, says Vertebrand’s Viswanath.

There is a big movement with the younger lot of purchasers about health — his 13-year-old son was warning him the other day not to buy something as it has “too much cholesterol” — it has become a huge cult, he observes.

Whether companies are following the letter or the spirit of the law, being honest will have to become a hygiene factor.

Processed food will have to become healthier and healthier. People are aware and suspicious. “It goes beyond moral responsibility, it is vital for survival,” he adds.

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