A CASE STUDY ON

MAGGI NESTLE INDIA

A Dissertation submitted to Andhra University, Visakhapatnam.

For fulfillment of the requirements

For the award of degree of

BACHELOR OF BUSSINESS ADMINISTRATION

Submitted by

Miss. M. MOUNIKA

BBA VI semester

Reg.no: 115128507008

Under the esteemed guidance of

Mrs. N. R. L.N. KAMESWARI M.com, M.Phil

PROJECT GUIDE, LECTURER,

DEPARTMENT OF COMMERCE AND MANAGEMENT STUDIES

CHAITANYA DEGREE AND PG COLLEGE FOR WOMEN’S

(Affiliated to Andhra University)

2015-2018

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 CERTIFICATE

This is to certify that the project entitled “NESTLE MAGGI INDIA” submitted
by Miss. M. MOUNIKA, bearing Reg.no: 115128507008, in fulfillment for award of BBA by
Andhra University, Visakhapatnam. It is bonafied work done by her under any guidance and
supervision.

Her conduct during the period was satisfactory.

Place: Visakhapatnam

Date: N.R.L.N. KAMESWARI

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 CHAITANYA DEGREE AND PG COLLEGE FOR WOMENS

(AFFILIATED TO ANDHRA UNIVERSITY)

GAJUWAKA, VISHAKAPATNAM-26

****************************************************************

DEPARTMENT OF COMMERCE AND MANAGEMENT STUDIES

Reg.no: 115128507008

CERTIFICATE

This is clear that A CASE STUDY on “NESTLE MAGGIE INDIA” is bonafide record
done by Miss. M. MOUNIKA, Reg.no. 115128507008 under the guidance and supervision
for the fulfillment of the requirement for the award of the degree of the BACHELOR OF
BUSSINESS ADMINISTRATION in the department of commerce and management
studies, Chaitanya degree and PG college for women, gajuwaka, Visakhapatnam during the
academic year 2017-2018.

This is the original, not submitted to any university earlier.

N.R.L.N. KAMESWARI Y.V.N. LAKSHMI

PROJECT GUIDE HEAD OF THE DEPARTMENT

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 DECLARATION

I Miss. M. MOUNIKA, BBA final year, Reg.no: 115128507008 hereby declare the case
study on “NESTLE MAGGI INDIA” submitted to Andhra university, is bonafide work
done by me for the fulfillment required for the award of degree of “BACHELOR OF
BUSINESS ADMINISTRATION” in the DEPARTMENT OF COMMERCE AND
MANAGEMENT STUDIES, CHAITANYA DEGREE AND OG COLLEGE FOR
WOMEN, GAJUWAKA, VISAKHAPATNAM.

This is the original and not submitted to any university earlier.

Place: Visakhapatnam Miss. M.MOUNIKA

Date: Reg.no: 11512857008

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 ACKNOWLEDGEMENT

The quest of college never ends. So continuing my journey in the knowledge in

department of “BACHELOR OF BUSSINESS MANAGEMENT”, Chaitanya degree and
PG College for women, Visakhapatnam for the support given to carry out the dissertation.

I am grateful to Mrs.Y.V.N. LAKHSMI, the H.O.D for her guidance and suggestions
for the completion of my dissertation.

I express my heart full thanks to Mrs. N.R.L.N. KAMESWARI who inspired me to

undertake the project and guidance for the completion of my dissertation.

I express my heart full thanks to Dr. CHANDRA MAHALAKSHMI, the principal for
her guidance and suggestion for the completion of my dissertation.

I am also thanking to my family members who have given all the necessary support
during the study and completion of dissertation.

M.MOUNIKA

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 INDEX

Sl.n CONTENTS Pg.no

o

1. Introduction of the company 07-12

2. Case 13-15

3. Facts of the case 16-17

4. Issues of the case 18

5. Analysis of the case 19-24

6. Solutions 25

a. Of the company
b. Of the student

7. Conclusion 26

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 INTRODUCTION

ABSTRACT:
‘MAGGI is like our Mothers who are constantly understanding our lifestyles as we grow,
going deeper for consumer insights, beyond the obvious and searching for the ‘moment of
truth’. MAGGI has constantly been as ‘The Most Powerful Brand in India’. The Brand
Maggi- has presence in 130 countries with 5.2 billion Maggi noodles packs sold across the
world every year, has gross Domestic sales of Nestle (Rs. 10129 Crore in 2014) in India and
Rs.2961 crores as Gross Domestic sales of Nestle Segment which mostly comprises of Maggi
in 2014. In June 2015, it was reported in India that tests had found high amounts of Lead and
MSG in Maggi noodles, and FSSAI ordered country-wide withdraw and recall for all 9
variants of “Instant Noodles and Oats Masala Noodles” of Maggi. This recall has eroded
1300 crore of Brand Value of Maggi. The paper explores the inside story of the controversy
of higher MSG (Monosodium Glutamate) and Lead levels.
Keywords
Nestle India, Maggi, Monosodium Glutamate (MSG), Lead, Instant Noodles.

INTRODUCTION:
“Life is Good Food”; good our mission and we are constantly researching and observing the
role that food plays in the lives of consumers across the income pyramid. We are focused on
understanding the changing lifestyles, evolving needs, and dietary preferences of consumers
and rely on Nestlé’s extensive global R&D network and expertise in science based nutrition
to develop products that enable consumers to lead better lives and help them to improve
nutrition in their daily diets. However, since what we eat, when we eat, how we eat is a
personal choice, we realize that the role of nutritional education and the ability to make an
informed choice is important and we have been rolling out initiatives that will be useful for
consumers.” Mr. A.Helio Waszyk, Chairman and Mr. Etienne Benet, Managing Director,
wrote in Annual Report, Nestle India Ltd, 2014, pp 5.
“MAGGI is like our Mothers who are constantly understanding our lifestyles as we grow,
going deeper for consumer insights, beyond the obvious and searching for the ‘moment of
truth’. This reflects in the WPP- Milward Brown survey of 2014 (2) that recognized MAGGI

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anticipating our needs, preparing for them and nurturing them, sensing the change in our
personalities and speaking our language. MAGGI has constantly been as ‘The Most Powerful
Brand in India’. Maarten Geraets –GM
In June 2015, it was reported in India that tests had found high amounts and of lead MSG in
Maggi noodles, and FSSAI ordered country-wide withdraw and recall for all 9 variants
Instant Noodles of Maggi and Oats Masala Noodles
This recall has eroded 1300 crore of Brand Value of Maggi

INTRODUCTION OF THE COMPANY:

Maggi is an international brand of seasonings, instant soups, noodles that originated in

Switzerland I the late 19th century. The Maggi company was acquired by the nestle in 1947.
Maggi is an over 100 years old nestle brand of instant soups, stocks, bouillons, ketchups,
sauces, seasonings and instant noodles. It quickly became a pioneer of industrial food
production, aiming at the improvement of the nutrition of worker families.

Overtime the scope of Maggi has been extended from a predominantly dehydrated
cooking aid brand towards a general savory food brand including many types of ready meals
and also frozen food. This is in line with the fact that people all over the world are cooking
less and less from scratch.

HISTORY:

The company originated in Switzerland in 1884, when Julius Maggi took over his
father’s mill. He quickly became a pioneer of industrial food production, aiming to improve
the nutritional intake of worker families. Maggi was the first to bring protein rich legume
needs to the market, and followed up with a readymade soup based on legume meals in 1886.
After that Julius Maggi introduced bouillon concentrates, first in capsules, then in cubes. In
1897, Julius Maggi founded the company Maggi in Singen, Germany.

In 1947, the following several changes in ownership and corporate structure, Maggi’s
holding company merged with the nestle company to form nestle- Alimentana S.A, currently
known in its francophone home based as nestle S.A.

MAGGI SAUCES
(1). TOMATO KETCHUP
(2). TOMATO SAUCE

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(3). HOT & SWEET
TOMATO CHILLI SAUCE
(4). MAGGI PICHKOO
Launched in the mid-1980s, MAGGI Sauces has been associated with category re-defining
innovations from the very beginning, starting with the launch of the unique MAGGI Hot &
Sweet and “It’s different” commercials. Over the years, MAGGI has continuously re-
invented itself in terms of new products, packaging, promotion & distribution to emerge and
sustain itself as the largest sauces brand in India. MAGGI has also launched the Rich Tomato
Ketchup in the convenient toy pack format called Pichkoo that has made the unique flavors of
MAGGI affordable to a whole new set of consumers.
MAGGI COOKING AIDS MAGGI MAGIC CUBES
(1).VEGETARIAN MASALA
(2).CHICKEN With MAGGI Magic Cubes, you can cook the smart way while adding that
mouth-watering flavor to your meals. That’s not all; as you crumble a MAGGI Magic cube
into your dish, your curries, biryani and even non-vegetarian dishes turn rich and delicious in
no time. It is time for you to don the Chef’s hat at home.
MAGI BHUNA MASALA
(1). MAGGI BHUNA MASALA FOR GRAVY DISHES
(2). MAGGI BHUNA MASALA FOR KORMA DISHES
(3). MAGGI BHUNA MASALA FOR MAKHANI DISHES
MAGGI is revolutionizing the Indian kitchen with its latest offering –MAGGI Bhuna Masala.
Based on intensive research and in-depth understanding of Indian food habits and cooking
practices, MAGGI Bhuna Masala allows the housewife to prepare a large variety of tasty
dishes without the hassle of chopping and frying. The dishes retain that ‘special touch’ of the
housewife as she adds her own spices..... Standing strong on its promise of “Taste Bhi, Health
Bhi”, MAGGI Bhuna Masala comes with "no added preservatives", "contains only 1 tbsp of
oil" and "tastes just like homemade." Gives you a perfect dish in three simple steps:
• Open the pack & pour contents in the pan
• Add vegetables/paneer/chicken/rajma etc.
• Add spices and cook
MAGI COCONUT MILK POWDER
MAGGI Coconut Milk Powder brings the coastalflavors right to your kitchen. It has been
developed by retaining the real flavor from Sri Lankan Coconuts in a powder form. Simply

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add warm water to MAGGI’s Coconut Milk and use it in curries, casseroles, rice
preparations, cookies and blender drinks for that authentic coconut milk flavor
MAGGI MASALA-E-MAGIC
The first ever fortified taste enhancer that can be used across different cuisines in India. It is
not a simple masala, but is unique in that it efficiently enhances the taste inherent in the food
ingredients already present. It is specifically fortified with Iron, Vitamin A & Iodine that are
known to be widespread deficiencies in India.
MAGGI SOUPS
(1). RICH TOMATO
(2). MIXED VEGETABLE
(3). CREAM OF
MUSHROOM
(4). HOT & SOUR VEGETABLE
(5). SWEET CORN
The new range of Maggi Healthy Soups is distinctly delightful. These soups are made using
Nestlé’s new and patented granulation based technology that allows them to retain the
freshness of key ingredients, giving you that extra zing of taste. They contain fresh vegetable
purees and deliver the taste and aroma of home-made soups. In fact, Nestlé India is amongst
the Creamy spinach first in the Nestlé world to adopt this unique technology. Maggi Healthy
Soups are low fat, low cholesterol , have no added MSG, and have no added preservatives
and synthetic colors, living up to the Maggi promise of Taste Bhi, Health Bhi!.
INSTANT NOODLES AND MARKET SHARE:
Maggi has dominated the market since three decades with the market share of 70%. The
global demand of Instant Noodles is as shown in the Diagram: 1. India is at 4thPosition after
China, Indonesia and Japan.

MAGGI BRAND IN INDIA:

Maggi comes to India- teething troubles Maggi noodles were launched in India in the
early 1980s. Carlo Mr.Donati the present chairman and managing director of nestle India
limited, bought the instant noodles brand to India during his short stint here in the early
eighties. At that time, there was no direct competition came from the homemade snacks like
pakoras and sandwiches. So there were no specific buy and make snack! Moreover both
competitors had certain drawbacks in comparison snacks like samosas are usually brought out

10
and outside food is generally considered unhygienic and unhealthy. The other competitors,
“homemade” snacks overcome both these problems but had the advantage of extended
preparation at home. Maggi was positioned as the only hygienic homemade snack! Despite
this nestle faced difficulties with their sales after the initial phase. The sole reason being, the
positioning of the product with the wrong target group. Nestle had positioning Maggi as a
convenience food product aimed at the target group of working women who hardly found
anytime for cooking. Unfortunately this could not hold the product for long time. In the
course of many market researches and surveys, the firm found that children were the biggest
consumers of Maggi noodles. Quickly they repositioned it towards the kids segment with
various tools of sales promotion like color pencils, sketch pens, fun books, Maggi clubs
which worked wonders for the brand.

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 CASE-PROBLEM

Maggi seems to be just that prefect quick snack between means and is so easy to make that
kinds sometime make it alone. At the end of may 2015, India’s food safety
administration(FDA) ordered nestle India to recall its popular Maggi noodles after tests
showed that the product contained high levels of Lead and Monosodium glutamate(MSG).
Hence, the 2-minutes ready Maggi noodles had unexpectedly high level of monosodium
glutamate (MSG), as well as up to 17 times the permissible limit of lead. This finding led to
multiple market withdrawals and investigation in India and beyond.

21st may 2015- Indian state orders recall of Maggi noodles: Indian food inspectors order
nestle India to recall a batch of Maggi noodles from northern Indian state of Uttar Pradesh
claiming that tests have found Maggi instant noodles “unsafe and hazardous” and accused
nestle of failing to comply with food safety law.

ADDITIONAL MARKET:

Some of India’s biggest retailers (including future groups Big Bazaar, Easy day, and Nilgiris)
imposed a nationwide ban on Maggi. In addition, multiple state authorities in India found an
unacceptable amount of lead, leading to bans in more than 5 other states.

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, Rwanda and South Sudan.

THE MAGGI LOST 80% MARKET SHARE:

It was Sanjay Singh, a food inspector at the up government’s food safety and drug
administration, who spotted the label that claimed “no added MSG” on bright yellow packets
of Maggi noodles in March 2014 during one of his routine raids on retail outlets. A PhD in
organic chemistry, Singh picked up a sample and sent it to the state laboratory at Gorakhpur
for testing. The result that came a few weeks later was positive that particular sample of
Maggi noodles had MSG samples of Maggi noodles were then sent to the central food
laboratory in Kolkata in June 2014. The results that came after almost one year in April 2015
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read-MSG: Present and LEAD: 17.2ppm (parts per million). The amount of lead found was
over 1000 times more than what Nestle India ltd. had claimed.

MONOSODIUM GLUTAMATE: testing found some MSG in Maggi noodles. The packet
stated “no added MSG”, however, MSG naturally occurs in hydrolyzed peanut protein, onion
powder and wheat flour. Maggi offered to remove the words “no added MSG from the
package to overcome the objection.

LEAD: Maggi noodles include flavoring packets named “Tastemaker” which is intended to
dissolve in water during cooking. Maggi insisted that testing should be done on the product as
it is eaten; however the FSSAI INSISTED that the powder itself should be tested. On June 5,
the FSSAI said that the prescribed standards of 2.5 parts per million would have to apply to
all components of the product. Out of the 13 samples tested by Delhi authorities, 10 out them
had lead content exceeding this limit. The packets that initiated the investigation from UP had
17.2ppm of lead. Nestle also questioned the reliability of the labs used. Results from testing
outside of India (Singapore, US) reported that Maggi noodle were safe. In the later Bombay
High Court Judgment, the court agreed that the test results earlier labs were unreliable. The
court mandated testing to done at three specific laboratories (Punjab, Hyderabad, and Jaipur)
where Maggi was found safe. The lead may have been naturally occurring in plants and soil
or Indian spices although within the acceptable limits.

After that Maggi recalled stock worth nearly Rs.320 cores from the shelves and paid
20 crores to a cement factory to burn the product. In addition, corporate affairs ministry
imposed a Rs.640 crores fine on nestle India for the presence of MSG and lead beyond the
permissible limit.

Nestle has faced criticism for its advertising not adhering to market regulations in
developed countries. In October 2018, nestle mistakenly aired a commercial meant for
Bangladeshi television on British T.V. The advert made false claims that the noodles would
“help to build strong muscles, bone, and hair”. The British Advertising Standards Authority
stated that the advertisement did not abide by the new EU consumer protection legislation, by
which advertisers have to provide proof of health claims.

NESTLE RESPONSE:

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 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.

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 surprise with the content found in the sample as we
monitor lead content regularly as a part of the regulatory requirements”.

USING SOCIAL MEDIA FOR DAMAGE LIMITATION:

When magi noodles, one of the nestle’s top product was deemed unsafe in India, all
eyes were nestle to see how they would respond and manage the situation. Initially nestle
defended its product and rejected all claims that its noodles were unsafe and they did this on
the digital channels.

Nestle took to social media, Facebook and multiple twitter accounts to reassure
customers that its products were safe. Nestle respond directly to all comments on social
media. As well as these nestle created section on their main website to keep customers
updated. As the pressure grew on the global company, in a press conference nestle C.E.O said
that all maggi noodles in India would be withdrawn from shelves in order to comply with
regulators.

MYTH OR REALITY ABOUT LEAD AND MSG IN MAGGI:

THE LEAD ISSUE:
Lead occurs in the earth’s crust and is present in air, soil and dust. The CODEX Alimentarius
Standard sure a key reference for Nestlé. Nestle, test lead levels in the raw materials and
source ingredients from regions with the lowest levels of lead. The authorities have also set
firm limits to ensure that any lead present in a finished product are within recommended food
safety levels and safe to consume. It regularly monitors all our raw materials for lead,
including testing by accredited laboratories. These tests have consistently shown lead in
MAGGI Noodles to be within safe limits. We do more food testing than any other entity in
the world and have many stringent controls to guarantee safety: starting from the raw
materials we use, throughout processing to packaging. We adhere to the same quality
standards wherever in the world we operate.

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MSG ISSUE:
The amino acid L-Glutamate is one of the most abundant and important amino acids of
proteins. It is found in all foods that contain protein, such as cheese, milk, mushrooms, meat,
fish, and many vegetables. The natural flavour-enhancing levels of glutamate in food vary
greatly, but are high in foods such as tomatoes, mushrooms, soy sauce and fish sauce.
Monosodium glutamate, abbreviated as MSG, was discovered more than a century ago by the
Japanese scientist Kikunae Ikeda, who gave this unique taste the name “umami”, the fifth
taste beside sweet, sour, salty and bitter. Today, MSG is mostly produced by a natural
fermentation process that has been used for centuries to make such common foods as beer,
vinegar and yogurt. Leading international food authorities have confirmed MSG is safe to use
in food under common conditions of use. These authorities include the international World
Health Organization/UN Food and Agriculture Organization’s evaluation committee, the
European Commission’s Scientific Committee for Food and the United States Food and Drug
Administration. There have been some concerns raised about the contribution of MSG to
sodium intake via the diet. However, MSG contains International Journal of Management and
Social Sciences Research (IJMSSR) only about one-third the amount of sodium as table salt
(13 percent vs. 40 percent) and so where we use it in products, in combination with a small
amount of table salt, MSG can help reduce the total amount of sodium in a recipe by 20% to
40%, while maintaining an enhanced flavor. The level of glutamate for example in Maggie
Noodles are around 0.2 g/100 g, which is close to the average level of glutamate measured in
the same portion size of tomatoes or peas. Nestle is Committed to Food Safety

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 FACTS

FACTS OF THE NESTLE IN WORLD:

1. Food safety is our first priority.
2. We are one of the most active entities in the world when it comes to food testing.
3. In total around 100 million analysis a year are carried out for Nestle. Our own 26 NQAC
(Internationally Accredited) laboratories perform around 3million analyses a year.
4. We have 8000 persons working in Quality Assurance worldwide.
5. We have much stringent inbuilt control to guarantee from raw material selection through to
processing and packaging.
6. Over the years the industry approach has shifted from looking for defects in finished
products to trying to identify their root causes as early as possible in the supply chain so we
can understand and prevent them.
7. We have early warning system to help us pinpoint signals which may convert into issues
8. In 2013 in Switzerland we opened the most advantages laboratories of their kind to study
food borne pathogens. We built them so we can respond to emerging risks.
FACTS OF THE MAGGI IN INDIA:
1.”We have same rigorous approach to safety India that we have everywhere else”.
2. We have 300 people in total in quality assurance in India around half working in our 9 labs
there (8 in factory, 1 NQAC internationally accredited) and we work with third-party external
laboratories.
3. In recent days we have tested samples from batches representing more than 125 million
packets of noodles
4. We have sent samples from an additional 600 batches to an external laboratory.
5. We have tested samples from 1000 batches at your known accredited laboratory.
6. We also testing the raw materials such as the wheat we make the noodles with and the
spices we use to flavor the noodles.
7. All the results show that the lead is below the levels specified by regulators.
FACTS OF THE CASE:

⮚ In may 2015, food safety regulator from barabanki a district of UP, India reported that
samples of Maggi 2 minutes noodles had unexpectedly high levels of monosodium
glutamate, as well as up to 17 times the permissible limit of lead

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⮚ This finding leads multiple market withdrawals and investigations in India and
beyond.
⮚ Nestle decided to destroy more than $ 50 million worth of Maggi noodles in India
after they deemed unsafe by regulators.
⮚ After the Maggi ban, the India’s favorite 2-minute Maggi noodles lost 80% of market
share.
⮚ Nestle is rebuilding in India after 18 months of Maggi ban.
⮚ In June 6, 2015 the central government of India banned nationwide sales of Maggi
noodles for an indefinite period.
⮚ In November 2015, Maggi products were return to the shelves accompanied by the
nestle advertisement campaign to win back the trust of the people nestle resumed of
Maggi at all five India based plants.
⮚ In India Swiss brand Maggi is a part of the nestle family has held a near monopoly of
the market since being introduced in 1983.
⮚ Nestle takes help of digital media like Facebook, twitter etc., to re-build their trust by
customers that its product was safe.
⮚ Some of the India’s biggest retailers (including future groups Big Bazaar, Easyday
and nilgris) imposed a nationwide ban on Maggi.
⮚ Nepal indefinitely banned Maggi over concerns about the lead levels in the product.
⮚ Maggi noodles are withdrawn from the market of 5 African nations: Kenya, Uganda,
Tanzania, Rwanda and South Sudan.
⮚ Nestle paid 20 crores to a cement factory to burn the product.
⮚ In addition, ministry imposed a Rs.640 crore fine on nestle India for the presence of
MSG and Lead beyond the permissible limit.
⮚ A local court has ordered FIRs to be filed against Amitabh Bachchan, Madhuri Dixit
and other brand ambassadors who endorsed Maggi.

ISSUES OF THE CASE

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▪ In May 2015, Food Safety Regulators from Barabanki, a district of UP, India reported
that samples of Maggi 2minutes noodles had unexpectedly high levels of
monosodium glutamate, as well as up to 17 times the permissible limit of lead. This
finding led to multiple market withdrawals and investigations in India and beyond.
▪ June 3, 2015- the New Delhi government banned the sale of Maggi in New Delhi
stores for 15 days due to these findings. First Information Reports(FIR) against
Bollywood Maggi brand anbassadors Amitabh Bachchan, Madhuri Dixit, and Preity
Zinta were lodged by Sudhir Kumar Ojha, a lawyer, at Muzaffarpur District Court,
asking the authorities to arrest them if required. He complained that he fell sick after
eating Maggi which he had purchased from a shop at Lenin Chowk on 30th may.
▪ June 4, 2015- the Gujarat FDA banned the noodles for 30 days after 27 out of 39
samples were detected with objectionable levels of metallic lead, among other things
and Assam banned sale, distribution and storage of Maggi’s “extra delicious chicken
noodles” variety for 30 days after tests carried out at the state public health laboratory
concluded that the particular variety contained added MSG and an excessively high
amount of lead. On June 4, 2015the government of Tamilnadu banned Maggi foods
due to an unacceptable amount of lead and other components.
▪ June 5, 2015- the Food Safety and Standard Authority of India (FSSAI) Ordered a
recall of a 9 approve variants of Maggi instant noodles and oats masala noodles,
suggesting that were unsafe and hazardous for human consumption. On the same day,
the Food Standards Agency of the United Kingdom launched an investigation into
level of lead in Maggi noodles.
▪ June 6, 2015- the central government of India banned nationwide sales of Maggi
noodles for indefinite period.
▪ June 26, 2015- during a press meeting, the minister for health and family welfare of
Karnataka, U.T.Khader stated that Maggi foods would not be banned.
▪ July 2015- tests performed by the US health regulator FDA showed no dangerous lead
levels in the products. On 13 August 2015, the nationwide Maggi ban was struck
down by the Bombay high court. The court stated that proper procedure was not
followed in issuing the ban, and called in to question the test results, as the samples
were not tested at authorized laboratories accredited to the National Accreditation
Board for testing and Calibration laboratories (NABC).

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 ANALYSIS OF THE CASE

Maggi is a food brand best known for its instant noodles, ketchups, sauces, seasonings,
pasta and soups. The brand is owned by Nestlé India, which introduced a new food category
to the Indian market when it launched MAGGI 2-Minute Noodles in 1982.Since then,
MAGGI has developed a product range promoting the twin benefits of taste and health.
Advertising and marketing showcase the emotional satisfaction that customers associate with
the brand. With tag lines such as “Fast to Cook, Good to eat” and “Tasty and Healthy,”
MAGGI markets itself as purveyor of quick and nutritious snacks.
SWOT ANALYSIS
STRENGTHS:
•Highest Market Share: Maggi pioneered the concept of packaged instant noodles in India
three decades back and despite several brands entering the fray, dominates the space. Maggi
has a 70% share of Rs. 4000 Crore Instant Noodle Indian market. ITC Foods' Sunfeast
Yippee has garnered 18% of the market. Hindustan Unilever, which markets Knorr soupy
noodles, GSK, Horlicks noodles and Indo-Nissan Top Ramen, holds the balance share 12%
with other brands.
•Family Brand Image: Maggi has established itself as The Family Brand because all in the
family: Grand Parents, Parents and Siblings all like and love Maggi noodles. With the
presence in different product categories under the umbrella brand of Maggi with large SKU’s
(Stock keeping unit).Maggi have edge over its competitors.
•Truly International Brand: The Maggi brand originates from Switzerland where in 1863
Julius MAGGI created a recipe of flavors to bring added taste to meals. Industrial revolution
in Switzerland created factory jobs for women, who were therefore left with very little time to
prepare meals. Maggi was the first to bring protein rich legume meal to the market, which
was followed by readymade soup based on legume meal in 1886. In 1947 Nestlé International
Journal of Management and Social Sciences Research (IJMSSR) acquired the Maggi brand.
Besides noodles, Maggi is available in soups, seasonings and sauces category. Maggi was
introduced in India in 1982. In its first ads, the brand popularized the image of the “Maggi
Mom”. When it did not work much, MAGGI was later targeted at kids. After its
advertisements with taglines like "Mummy bhookh lagi, bas do minute" Maggi gained
popularity. Taglines like Fast to Cook Good to Eat, 2-minute noodles and Taste bhi, Health

19
Bhi are strong brand elements of Maggi. Etienne Maurice Firmin Bouisset, a French painter,
artist and printmaker developed and designed the logo of Maggi.
•Strong Brand in Urban and Rural India: Maggi has already dominated the Urban-Rural
Area segment with opening up of 22000 retail outlets. According To the company’s annual
report, Maggi Rasile Chow has been developed especially for rural/semi-urban markets to
provide “a low cost, tasty light meal that is fortified with iron...MAGGI further leveraged its
strength last year to drive affordable nutrition”. The Masala-e-Magic is a fortified taste
enhancer with iron, iodine and Vitamin A.
•Maggi started “Revolution of Cooking Food Instantly” in India: When Maggi instant
noodles arrived in India in 1983 -the year when India lifted the cricket World Cup for the first
time -they instantly caught the nation's imagination. The idea that anything could be cooked
in two minutes had an immediate impact on a people that had invented slow food centuries
before it became fashionable in fast food cultures. The "two-minute noodles" advertising
campaign on state-run television with which Maggi launched itself turned out to be an instant
attraction because of its liberating message for women. The "Maggi Mom" was not only seen
as loving and caring of her children as her mother was of her, but she was also able to juggle
her workplace and domestic responsibilities because of the snack.
•Nestle-Warm, Family & Shelter: All over the world, Nestle started in 1897, has become
the symbol of warmth, family and shelter. This has developed a unique bond of trust among
the consumers and the company.
•Research and Development Centre in India: in 2012, Nestlé is opening its first research
and development centre in India to further its understanding of Indian consumers, traditional
ingredients and local cuisine, and to provide scientific and technological expertise to the rest
of its global business. The centre, which will specialize in Asian noodles and Indian cooking,
will focus on developing highly nutritious, affordable products in appropriate serving sizes
for lower income consumers. Researchers will gain expertise in the use of local ingredients
and culinary traditions – work Nestlé expects to be a source of new ideas for products. The
company has invested CHF50 million in the centre, which is located in Manesar close to
Nestlé India’s headquarters in Gurgaon. With its new R&D centre in India, Nestlé aims to
extend the range of mainstream products it currently offers consumers in the country,
particularly in the noodles, cereal, beverage and dairy categories.
•High Customer Pull: With its distinguished promotion strategies & branding hence creating
strong customer connects had helped Maggi to have High TOMA score (Top of the Mind
Awareness)
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WEAKNESSES:
•MAGGI Controversy has Eroded the Brand Value: Brand value of MAGGI is expected
to fall by over $200 million or nearly 1,300 crore, as a result of a ban on the popular instant
noodles by Indian authorities. On 5 June, the food regulator mandated MAGGI-maker Nestle
India to recall all the available stock in the market following confirmation of harmful levels
of lead in the 'two-minute noodles’. Nestle India is estimated to recall 27,420 tones of
MAGGI noodles, including about 1,422 tonnes of noodles that are at its five factories in the
country. Currently, the factories have halted the production of MAGGI noodles. Before the
ban, MAGGI's brand had a valuation of $2.4 billion and its manufacturer was the 23rd most
valuable global food brand. A loss of $50 million in recalling MAGGI noodles along with
"damaged brand" is estimated to shrink the brand value to $2.2 billion, according to Brand
Finance.
•MAGGI-Generic Brand to Noodles in India: Sales of Nestlé’s other products under
MAGGI, which include soup, ketchup, mixes and coconut milk, are down by around
30%.Launched in 1984 by Nestle India, the 2-minute MAGGI continues its strong ride in the
Rs 1,300-crore noodles market that it has helped create. It is difficult to say why MAGGI’s
brand magic has endured in the face of repeated attempts by global rival FMCG majors likes
Hindustan Unilever and GSK, the latest being the launch of Horlicks Foodles and Knorr
respectively earlier this year. Is it convenience, taste, connect, nostalgia or all of these? So
strong is the MAGGI magic that the brand name has virtually become a generic name for the
product category. But does MAGGI have the verve to grow further or would it tire and retire
gracefully?
•Low Rural Market Presence: Products for the rural market will also help the company
maintain a balance. In the last two years, when the urban markets cooled down, the rural
markets continued to remain buoyant. High support prices for all large crops, the National
Rural Employment Guarantee International Journal of Management and Social Sciences
Research (IJMSSR) programmed, and the farm loan waiver have ensured that there is good
purchasing power in the rural markets. This has begun to drive FMCG companies to villages
and small towns. Nestle is no exception. A couple of weeks later, it came out with two new
products, this time for the rural and semi-urban markets at lower price points of Rs.2 and
Rs.4 (MAGGI Masala-ae-Magic and MAGGI Rasile Chow).The Swiss major obviously
wants to have its footprint in both India as well as Bharat –the common theme being a 'Taste

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bhi, health bhi’ product, a positioning MAGGI started with the launch of an Atta (flour)
variant.
•MAGGI is a Uniform Brand: Nestle India will consider introducing new products,
including under the MAGGI brand, while looking to drive growth of other categories with
increased advertising spending, as it looks to overcome the setback from the ban on its
flagship instant noodles. The company was not diluting the importance of MAGGI as it is "is
a big part of our movement". On the impact on other categories, the MD said: "There has
been impact on the rest of the portfolio because it is also sold in similar outlets and in similar
geographies. I can say that it has been reasonably uniform across all the categories.
OPPORTUNITIES
•Growing Package Industry in India: The MAGGI noodles controversy is likely to be a
stepping stone in the evolution of India's packaged and processed food industry, which could
result in better labeling, packaging and testing norms for the entire sector,
According to Japanese financial services firm Nomura. The Indian packaging industry is
growing continuously. The total worth is about USD 24.6 billion. The average annual growth
rate is about 13 - 15%. However, there is great growth potential since India’s per capita
consumption of packaging is only 4.3 kgs whereas neighboring Asian countries like China
and Taiwan show about 6 kgs and 19 kgs, respectively.
•Repositioning the MAGGI: For a brand that is exactly not what the doctor prescribed as a
part of the daily diet, MAGGI has a phenomenal legacy in India transcending demographics
and psychographics. From college canteens to up market office cafes, it has been the
ubiquitous hunger-satiater for long. Many even go to the extent of admitting that after wheat
and rice it has become the third staple of the country, such is its reach. Touted as a Rs 16,000
crore brand, as per sources and possibly the second largest brand in the country, second only
to Parle-G, MAGGI has for the first time been shaken up by competition in the form of ITC's
Sunfeast Yippee, and a few others like Indo Nissin, Wai Wai etc nipping away at its share.
•High Brand Awareness of Indian Consumer: The marketers think the Indian consumer is
very fashionable and knowledgeable. They are educated about the brands and are aware of
the prices as well. This made us take some time to land our plane right; you really need to get
it right. You only get one shot at the market. And you need to get it right and create great
impression because you don't get a second chance. That is why we took some time to
get to the Indian shores. We are bringing American casual style and we do not see too much
of it.

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•The Unexplored Market of Snacks in India: The Rs. 58000 crore snack market in India is
still unexplored. Busy lifestyles and increasing snacking will remain behind the high volume
growth in sweet and savory snacks in India. Aggressive promotional campaigns by leading
manufacturers, new launches and improvements in the distribution via modern retail channels
penetrating into rural India will also drive demand during the forecast period. Sweet and
savoury snacks will continue to be enjoyed as favorite indulgence items with their spicy and
tangy offerings.
•Opportunity to be Substitute to Other Snacks Category of Food Products (Brand
Extension): MAGGI can expand its product categories by venturing out in corn flakes, Chips
&Pickles (Although it failed in 2003 but now with presence of local & national players in this
product category, company can reap the benefits).
•Long Potential Rural Markets: Although it’s been used majorly by the educated class in
order to save their time what if the long potential rural markets can also be penetrated with
the innovative strategies pertaining to consumers engagement with the brand.
•Also Company can target the Restaurants chains by offering some customized or special
offerings to make it more short of part of the daily life of the consumers
THREATS
•Competitors: Currently the Indian ketchup market is valued at Rs.220 crore. The top
Ketchup Brands in India are MAGGI Kissan and Heinz. Nestle's MAGGI leads the Indian
ketchup market with a market share of 37 cent. Hindustan Unilever Limited's Kissan follows
with a market share of 29 per cent and Heinz holds a total per market share of around 10
percent. MAGGI, has been dominating the instant noodles market in India for nearly three
decades, is currently witnessing tough competition with a number of new entrants such as
Sunfeast Yippee, Hindustan Unilever's (HUL) Knorr Soupy Noodles, Top Ramen and
Ching's Secret.
•FDI in Food Processing Industry: 100% FDI is permitted in the automatic route for most
food International Journal of Management and Social Sciences Research (IJMSSR) products
except for items reserved for micro and small enterprises. 100% FDI is permitted for
Alcoholic beverages, with the requirement of an industrial license. For pickles, mustard oil,
Groundnut oil and bread –items reserved for the micro small and medium sector, 24% foreign
direct investment is allowed under the automatic route, with the requirement of prior approval
from the Foreign Investment Promotion Board for FDI amounting to more than 24%.

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•Drivers and Reduced Entry Barriers in the Food Business: Further incentives such as
high tax rebates, depreciation benefits and reduced custom and excise charges also encourage
companies into food processing. Imaginative and targeted policies such as 'Food Parks' are
designed to address weaknesses throughout the value chain.
•Negative Word of Mouth (WOM): Propagation of ill effects of MAGGI noodles
deterioration in perceived value of the MAGGI brand due to its Noodles product category
through online & Social Media possess threats to the existence of MAGGI. As can affect the
brand as a whole.
•Pressure to Sustain the Quality of the finished product and be No.1 Brand
(Commoditized name): For majority population the name MAGGI is being commoditized
for Noodles just like Coalgate as toothpaste, Surf as washing powder, Luxas bathing soap etc.
in FMCGs.

SOLUTIONS

OF THE COMPANY:

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 In 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.

A statement on their website said that “The quality and safety of our products are the top
priorities of 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.”

OF THE STUDENT:

Maggi, being an icon of nestle; should not be the target of controversies that
questioned its reputation. Nestle should attach more value and significance to its product.

Each brand has a soul and distinct characteristics. That’s what distinguishes a cult
brand. Nestle should come up with its best product quality assurance and safety.

Bearing the competition created by products of Knorr, Patanjali, top ramen is an

important task for nestle now, after the comeback.

Nestle needs to re-formulate Maggi as per Indian standards and regulation, replace
them in stores.

Investing in corporate social responsibility activities, signing a credible endorser,

effective public relations etc, would help regain customer confidence.

CONCLUSION

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 NESTLE MOTTO ‘GOOD FOOD, GOOD LIFE’ will have to prove its credibility and put
a lot of efforts again as it have ended up in scratch. Nestle should concentrate on product
portfolio diversification with focus on diary, beverages and coffee and also chocolates as well
as confectioner in order to avoid over dependence on single product. It is rightly said one can
do anything but only if god and time permits. Those who fail to analyses the happenings in
the surroundings become losers and those who accommodate and adjust according to time
rule the world. The controversy started igniting last year but no officials of nestle India failed
heed to do the necessary rectification resulting now a bad name and shame for the company.
Health is of prime concern for everyone though taste also matters. It is very difficult to
restore the faith lost because even the school going kids now say- Maggi is bad. This
controversy will surely lead to increased awareness among consumers for understanding the
impact of any product before consumption rather than blindly believing on false claims in the
advertisements. It will also pressurize the other food product giants to move cautiously by
abiding the norms of food and safety regulatory norms.

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