Still meri Maggi?

It has been two months, and the spotlight on Nestle’s Maggi, whose noodles were allegedly found to have excessive levels of lead and MSG, has been unrelenting. The latest piece of news to make headlines is that Nestle is forking out Rs 20 crore to get its stocks destroyed, which will no doubt add to the many blows, moral and monetary, it has suffered since May 2015. It was banned in several States and then the Food Safety & Standards Authority of India (FSSAI) ordered it off the shelves. The controversy has singed other instant noodles brands too, with brands such as ITC’s Yippee, Top Ramen and Wai Wai coming under the scanner and some of them being recalled.

Branding experts had told cat.a.lyst that brand Maggi would not suffer long-term losses to its reputation despite the trouble it was then beginning to face. (A Question of Trust, cat.a.lyst dated May 29). They had said that it was a very strong brand for people to stop believing in it or even believe that its manufacturer was guilty of negligence. Two months down the line, though, with all the consequences and the sales of the entire category of instant noodles down a reported 90 per cent, do they still think their views hold good?

Hamsini Shivkumar, co-founder, Leapfrog Strategy Consulting, says restoring normalcy is a long haul. “First, the company has to work with the FSSAI and other States' authorities to re-negotiate the ban. Then, it will have to re-introduce stocks with a strong re-assurance campaign. And then wait for consumer response to come back. All of this will take at least two years, perhaps even three.” In the long run, the growth curve of instant noodles in India could plateau, she says. “In terms of other packaged foods companies, there will certainly be concern in the board rooms that they should not be unfairly victimised through political theatre around packaged foods,” she adds.

One of the criticisms against Nestle at that stage was that it had not addressed the issue and contained the damage swiftly enough. “It still needs to do more to win over customers’ trust,” says Alpana Parida, president of brand strategy and design firm DY Works. Given that it is a brand that is consumed across a wide range of socio-economic groups, its announcement that it will be getting its samples tested independently in international labs has not gotten much visibility, she adds.

“The issue has definitely shifted the focus to the fact that people are more aware of food safety issues, and also shows the Government in a better light. It is definitely a dent in Maggi’s image, but it will die down. These brands (including others being investigated) are too strong, and they are big business earners,” says Raghu Viswanath, founder of brand advisory firm Vertebrand.

Parida points to reports that Nestle will launch other snacks under the Maggi brand to make up for the losses from the recall of its noodles. In the light of all that has happened, isn’t it a bold move? And would the Government be receptive to it? “Well, Nestle’s back is to the wall. It must surely have done its research. Maggi’s success is due to its masala , not its noodles, and it has to bring it back, even if it has to apply it to other products,” she adds. Maggi is still loved and if it makes its new products safer, healthier and more natural, it will succeed. As for the Government, it needs to be seen as fair and vested in fostering a fair business climate. So if Nestle unveils a new product with a new formulation, it could be passed, I don’t see the Government being bitter,” she adds. Watch this space.

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