P
oster boy of recent day controversy Nestlé’s
instant noodles brand Maggi, has begun
appearing on shelves, after months of back and
forth with the authorities, testing and discussion.
While there’s plenty of anecdotal evidence that
people are excited about Maggi’s return, several
questions continue to loom. We tried to zero in on
the top three:
• Will Maggi sales fall short of pre-ban levels – or
exceed them? Is the brand past its peak on the
sales front?
• The intangibles are not to be taken lightly – to
what extent has ‘brand Maggi’ been affected?
What will happen to the brand value of Maggi,
going forward?
• What is there to learn from this episode? What’s
the biggest takeaway/lesson here?
By and large, branding and communication
experts are optimistic about Maggi’s ability
to regain consumer trust. After all, several big
companies have recovered their volumes after
disastrous product failures. Examples that come
to mind readily include Coca-Cola’s ‘pesticide
scandal’ and Cadbury’s ‘worm controversy’.
A spine-chilling global example is the Tylenol
scandal that Johnson & Johnson faced in the 1980s;
many of the pain relief tablets were found laced
with poison, leading to several deaths in the USA.
It remains to be seen how Volkswagen will regain
consumer trust post the recent ‘pollution scandal’.
We had a few industry experts indulge in some
intellectual soothsaying. A look at what they said
about Maggi’s prospects. Edited Excerpts.
W il l Maggi
Bounce Back?
While brand experts are optimistic, they implore
Team Maggi to proceed with caution...
By Ashee Sharma, Shweta Mulki and Ashwini Gangal
Arvind Singhal
Kishore Chakraborti
W
E
Chairman, Technopak
Advisors, a Management
Consulting Firm
hile Maggi has suffered a
significant loss of business,
and its reputation with its
consumers has been severely
dented (even though many
remained incredulous that the
product could be unsafe), it is
likely to end up becoming an even
stronger brand in 2016. Nestlé is likely to fully recuperate the
losses it incurred during the controversy.
Several factors could lead to this: Perhaps the most important
one could be a positive backlash from consumers who feel Maggi
has been unnecessarily victimised; they may wish to show
their support to the brand by consuming more of it. Nestlé
itself is likely to increase its advertising and promotion spend
to reconnect with its consumers and further delight them with
more variants.
Nestlé’s innovative use of the burgeoning e-retail channel
(like partnering with Snapdeal), will further enhance the reach of
the product; this will give a further fillip to its sale. And, finally,
with its current (Wai Wai, Sunfeast, etc.) and new competitors
(Patanjali) also stepping up their marketing effort, the entire
packaged noodles category is likely to see sharp growth. Maggi
is likely to benefit from this.
Independent Brand Consultant, and Former Vice President,
Consumer Insight and Human Futures Development,
McCann Erickson
ven if you are the best sprinter, it is difficult, if not impossible,
to make up for lost time and lost opportunities. Nestlé is already
running a race with a handicap of `300 crore due to the recent fiasco.
But, big international cola and chocolate brands have bounced back
from similar, if not more, difficult situations.
The cola segment’s pesticide controversy was worsened by
discussions around other social issues like depletion of the water table
and the existing negativity in consumers’ minds about the damaging
effect of carbonated drinks in general.
Cadbury’s problem of ‘insects in chocolate’ was a visible, tangible one; one could not
deny the evidence. Nestlé’s problem, on the other hand, emanated from some sarkari report
of some small town UP Government department. We all know how much trust we have in
these departments. According to the reports, some substances were present beyond the
permissible limit.
Consequent media bashing and lack of a strong rejoinder from the brand management stoked
the fire.The brand stoically bore the loss, destroyed its huge stock, waited for international lab
reports and court orders, and then came back to the consumer. Today’s consumers are intelligent,
discerning and smart. If the super-fast online sell of Maggi packets is any
indication, it is only a matter of time before the brand gets its former glory back.
The lesson for the brand is: If you are dealing with food, keep your
firefighting machinery ready; conduct mock drills. This is neither the first,
nor the last, time we’re seeing such an episode.
The new online commercials for the resurrected Maggi seem to
resonate with the mindset of the consumers.
Anita Nayyar
CEO, Havas Media Group, India & South Asia
M
Suman Srivastava
Chief Strategy Officer,
FCB Ulka and Founder,
Marketing Unplugged,
A Marketing Consultancy
W
e’ve seen such episodes before. Globally, there have
been famous disasters; Johnson & Johnson seems
to have been through around three of them, many pharma
companies have faced them. Brands have tended to bounce
back, apparently without any problems. Well, either they die
or bounce back.
Maggi is going to come out of this looking better than
ever. It’s already beginning to sound like the government/
authorities over-reacted. And public memory is notoriously
short. Overall, I don’t think the brand value of Maggi should be
affected. There won’t be any long lasting damage.
Recently, someone asked me what I think Maggi should do
next. I said, ‘Maybe they should launch a chocolate variant.
They should completely change the conversation.’ You don’t
want to be talking about whether or not you have lead in your
product. Enough has been said about that. Move on! They need
to get some new news about the brand out. People will get
excited about that and hopefully forget about all this.
They’ll reach their pre-ban sales levels; they may do
even better. It’s been a good wake up call for them. Post
crisis, even Cadbury improved its packaging and
supply chain. That little shock actually made
the company and brand stronger. I
think Maggi will do similar stuff.
It’ll look into its formulation,
its ingredients, where/how
it is produced... they’ve been
resting on past laurels and
haven’t worried about this too
much. But now, they’ll come
out with better products and
improved packaging.
aggi single-handedly created the instant noodles category in
India, and was a precursor to the nation’s appetite for packaged
foods. Its promise of easy preparation became the basis for many
food formats.
And then the trust was shattered. Indians are the most trusting of
brands and believe brands should play a role in improving their quality
of life and well-being, according to Havas Media’s Meaningful Brands
India Study 2015. MSG and lead-related accusations hit at
the very core. The swift action of the government and
consequent total withdrawal of the product caused
extreme reactions both for and against Maggi.
The study reveals ‘food’ as one of the most ‘meaningful’ sectors; it is linked with
strong attachment and trust. The insights revealed by the study, coupled with the
‘brand love’ enjoyed by Maggi (as evidenced by the fast sales after re-instating it),
gives Maggi another chance in India.
Maggi will endure because of the people who made it what it was – the Indian
customer. It will be akin to the renegade child forgiven by loving parents. Will it
thrive? Sure, it has huge potential. And time makes all things possible.
But Nestlé and Maggi cannot afford to take another misstep. Maggi has everything and more
going for it, but how things pan out will depend on what Maggi does next.
Shripad Nadkarni
Co-founder, MarketGate, A Brand Consultancy
I
n the short term, yes, the brand suffers, because of all the negative
news around it. However, if there’s proper closure, then it’s a
matter of time before they get back. In this case, I think there is
proper closure, because of what the High Court has said.
If you see most of these cases, where there has been proper
closure – whether it was Tylenol in the 1980s, or even Cadbury and
Coke for that matter – volumes have recovered. Yes, the lead time
varies, depending on the intensity of the competition and the stature
of the brand. In this case, Maggi is an iconic brand. I expect it to come
back to normal pretty soon.
But there’s a subtext to what I am saying: This is a good time for Maggi to actually bring back a
fully loaded product and enhance the product significantly. The strategic intent is not about cost;
it is about gaining back consumer confidence. So, it becomes a kind of revamp. Whether they
will regain confidence to the extent it was before this problem occurred depends on the
series of actions they take. There should not be any misstep. The communication has to
be calibrated very finely. They have to walk a fine line between chest thumping and overly
emotional and soppy communication.
But, there is a certain level of murkiness about the issue. The entire controversy sounds
pretty hollow; it’s more of scare-mongering. It sounds like a manufactured, rather than a real,
controversy.
Virat Mehta
Brand and Communications Consultant, and
Former Nestlé Hand
M
aggi is no stranger to crisis. The brand has had its fair share of
troubles – in the late 1990s, the then newly launched air-dried
noodles had to be withdrawn, as consumers did not like the taste. The
company quickly picked up on the consumer sentiment and launched
the original noodles back. Although this looked like a disaster at the
time, the brand went from strength to strength every year following
that crisis and has emerged as one of the strongest FMCG brands in
India.
The current situation is similar. Yes, trust has been dented for
the moment but the brand will emerge stronger than before. Consumers welcomed the initial
product placement before Diwali and the Snapdeal package was snapped up within minutes of its
announcement. Despite the confusion around the safety of the product, trust in the brand is very high
and consumers are willing to buy it again.
On digital media and in the press, the brand engaged in appropriate conversations, as opposed to
knee-jerk reactions. The result of this prudence is an overwhelming positive sentiment. Consumers
endorse brands if they are able to reassure them quickly. For instance, despite New Coke being
overwhelmingly rejected by consumers, when Coke Classic was brought back, consumers showed
their loyalty by buying it even more than before.
I have no doubt that Maggi will emerge from this crisis with vitality and vigour, and will regain
its top spot shortly.
Harish Bijoor
Brand Expert and CEO,
Harish Bijoor Consults Inc.,
A Brand Consultancy
T
he biggest take-away from
the Maggi episode is that one
should never ignore the smallest
whimper of either consumer
activism or regulator activism.
It is extremely important to pay
attention to the smallest issue
raised by a regulator, in the
remotest corner of the country. It is extremely important to
cater to any kind of activism that is going on against your brand,
anywhere.
About the way Maggi handled the situation – while
initially, they bumbled, later, they got savvy. And when they
got savvy, they got very savvy.