Senior associate editor Ajita ShashidharIndia, with a population of 1.2 billion, is one of the world's largest consumption economy, where every global consumer products company wants to have a share of the consumption pie. Unfortunately, this is also a market which allows brands to take their consumers for granted due to lack of proper regulations.
Maggi Noodles has been facing the brunt of consumer wrath due to high contents of MSG and lead. The brand is being bashed and abused on social media. Nestle, which earns over 50% of its revenue from Maggi , has even called back the product.
But one can't really take Nestle to court as there is no regulation which states the permissible levels of MSG and lead that can be used in a product in India. One can also now argue why Nestle couldn't adhere to the global norms in India.
The Maggi controversy is not the first of its kind. Almost a decade ago, there was a furore over worms being found in Cadbury chocolates. The company had said that since most stores in India didn't have refrigeration facilities, it affected the product.
The company then came up with packaging which would keep the freshness of the product intact even if there was no refrigeration. However, it is a known fact that chocolates need to be refrigerated and if cold storage is an issue in the Indian market, the question to be asked is: Why did Cadbury have to wait for the worm controversy to change its packaging?
Even when the pesticide crisis hit the cola companies in early 2000 and wiped off their growth for over two years, the companies couldn't be blamed of violating norms as there was nothing to prove that the cola companies had violated norms. In fact, there was no norm in place. The level of contamination in our ground water is so high that any beverage using that water is bound to have pesticide contents.
The pesticide crisis had, in fact, raised the question of the existence of the cola majors in the country. Their growth in the country was virtually wiped out for close to three years. Both the companies had consciously stayed away from promoting their cola beverages and began to push their fruit-based drinks. PepsiCo began to position itself as a food and beverages company and not a beverage-only company.
When controversy hit them, Nestle, the cola majors and Cadbury did respond at once by improving their offerings, but in all the cases it came as an afterthought.
Meanwhile, sales of Maggi Noodles have dipped, though not wiped out. Kirana store owners in Mumbai say that die-hard Maggi loyalists are trying out other brands such as Sunfeast or Top Ramen. "Many of them are switching to other variants of Maggi such as Maggi Atta and Maggi Oats," points out the marketing head of a modern retail chain.
Raghu Vishwanath, MD of brand valuation company, Vertebrand, says that Nestle should actually use this crisis as an opportunity to look at further developing the product. "They should come up with a new variant that is completely devoid of MSG and lead," he says.
While a dip in sales at least in the short-term is inevitable, marketing gurus are confident that Maggi would bounce back in the long-term. If the cola brands could bounce back, there is no reason why Maggi won't. "For the kind of equity the brand has built, the consumers will forgive them," says Vishwanath.
However, there are certain things that the company should do at once in order to make sure that the consumer sentiment doesn't turn against them, says Harish Bijoor, CEO, Harish Bijoor Consults. "They must publish a white-paper in consumer interest. This white-paper must be open and frank and must pack brand and product transparency in its submission to the public at large. This will enhance the image of nestle in India for sure," he says.
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