International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 4, No. 10, October 2015

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“What’s at Stake”: The Maggi Noodles Story (A Case Study)

Dr. Jaskaran Singh Dhillon, Associate Professor, School of Commerce and Management, Sri Guru Granth Sahib World University, Fatehgarh Sahib (Punjab) Tejbir Kaur, Assistant Professor, School of Commerce and Management, Sri Guru Granth Sahib World University, Fatehgarh Sahib (Punjab) Dr. Rubeena Bajwa, Assistant Professor, School of Commerce and Management, Sri Guru Granth Sahib World University, Fatehgarh Sahib (Punjab)

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.(1)

“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 recognised MAGGI 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. (3) 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.(4)(5) This recall has eroded 1300 crore of Brand Value of Maggi. (6)

THE COMPANY Maggi is an international brand of seasonings, instant soups and noodles owned by Nestle since 1947. The original company was founded in Switzerland in 1872 by Mr.Julius Maggi. The original company came into existence in 1875 in Switzerland when he 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 meal to the market, and followed up with a ready-made soup based on legume meal in 1886. In 1882 he served up two instant pea soups and an instant bean soup accelerating the movement to easier food preparation and enjoyment. In 1897, Julius Maggi founded the company Maggi GmbH in the German town of Singen, where it is still based today. In 1947, following several changes in ownership and corporate structure, Maggi's holding company merged with the Nestlé company to form Nestlé-Alimentana S.A., currently known in its francophone home base as Nestlé S.A.(7)

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Figure-1: the Share Prices of Nestle from May, 2015 to 29.9.15 date

Source: moneycontrol.com retrieved on 29.9.15 NESTLÉ's relationship with India dates back to 1912, when it began trading as The NESTLÉ Anglo-Swiss in 1947, the economic policies of the Indian Government emphasised the need for local production. NESTLÉ responded to India's aspirations by forming a company in India and set up its first factory in 1961 at Moga (Punjab), where the Government wanted NESTLÉ to develop the milk economy. Progress in Moga required the introduction of NESTLÉ's Agricultural Services to educate, advise and help the farmer in a variety of aspects. From increasing the milk yield of their cows through improved dairy farming methods, to irrigation, scientific crop management practices and helping with the procurement of bank loans. NESTLÉ set up milk collection centres that would not only ensure prompt collection and pay fair prices, but also instil amongst the community, a confidence in the dairy business. Progress involved the creation of prosperity on an on-going and sustainable basis that has resulted in not just the transformation of Moga into a prosperous and vibrant milk district today, but a thriving hub of industrial activity, as well. NESTLÉ has been a partner in India's growth for over nine decades now and has built a Condensed Milk Company (Export) Limited, importing and selling finished products in the Indian market. After India's independence the company developed a very special relationship of trust and commitment with the people of India. The Company's activities in India have facilitated direct and indirect employment and provides livelihood to about one million people including farmers, suppliers of packaging materials, services and other goods. (8) The Company continuously focuses its efforts to better understand the changing lifestyles of India and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness through its product offerings. The culture of innovation and renovation within the Company and access to the NESTLÉ Group's proprietary

technology/Brands expertise and the extensive centralized Research and Development facilities gives it a distinct advantage in these efforts. It helps the Company to achieve international quality under internationally famous brand names such as NESCAFÉ, MAGGI create value that can be sustained over the long term by NESTLÉ IndiaIt also manufactures products like, MILKYBAR, KIT KAT, BAR-ONE, MILKMAID and NESTEA and in recent years the Company has also introduced products of daily consumption and use such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Dahi and NESTLÉ Jeera Raita. NESTLÉ India is a responsible organisation and facilitates initiatives that help to improve the quality of life in the communities where it operates, offering consumers a wide variety of high quality, safe food products at affordable prices. (9)

After more than a century-old association with the country, today, NESTLÉ India has presence across India with 8 manufacturing facilities and 4 branch offices. NESTLÉ India set up its first manufacturing facility at Moga (Punjab) in 1961 followed by its manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud (Karnataka), in 1989; Samalkha (Haryana), in 1993; Ponda and Bicholim (Goa), in 1995 and 1997, respectively; and Pantnagar (Uttarakhand), in 2006. In 2012, Nestle India set up its 8th manufacturing facility at Tahliwal (Himachal Pradesh). (10) PRODUCT MIX: THE CRISIS WITHIN 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. (11)

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Figure-2: Product Mix of Nestle India Ltd Source: www.nestle.in

Table: 1: Product Mix of MAGGI

S.NO. PRODUCT PRODUCT EXPLANATION 1 MAGGI

NOODLES MAGGI VEG ATTA NOODLES

It comes packed with everyone's favourite MAGGI Masala taste & healthy because it is made with ATTA and has real vegetables in it. Each delicious serve (80g) of MAGGI Veg Atta Noodles provides dietary fibre equal to 3 rotis.

MAGGI OATS NOODLES MAGGI Oats Noodles, yet another pioneering innovation from MAGGI to offer Taste Bhi Health Bhi to all its fans. Exciting, delicious noodles made with wholegrain Oats that offer: Fibre of 1 bowl oats; Real vegetables; Favourite MAGGI masala taste

MAGGI -2 MINUTES NOODLES

MAGGI 2-MINUTE Noodles is the most-loved meal across all age groups and defines the Instant Noodles category in India by being a part of our way of life. It has been bringing people together and is the favorite of millions; living in our hearts it has become intertwined in some of people’s most memorable experiences. MAGGI 2-Minute Noodles brings to you 10% RDA of Protein and 20% RDA of Calcium in each serve (75g). With a reduction of over 27% salt per serve, less than 0.2% Trans Fats and no added MSG’s MAGGI Noodles has focused on providing you a healthier meal, without compromising on the great taste you love.

MAGGI CUPPA MANIA (1). MASALA YO (2). CHILLY CHOW YO

With multi-tasking becoming a necessity, it is essential that you have a quick meal that is healthy as well. MAGGI Cuppa Mania Noodles fits perfectly into your lifestyle while satisfying that hungry belly with instant taste, anytime. Just add boiling water for a quick and healthy meal. With 2 mouth watering variants; a fork inside for on-the-go consumption, attractive cup sleeves, real vegetables and calcium.

2 MAGGI PAZZTA

(1). MASALA PENNE (2). CHEESE MACARONI (3). TOMATO TWIST (4). MUSHROOM PENNE

MAGGI brings to you NUTRI-LICIOUS PAZZTA - an offering to delight your every sense and make you fall in Love! It comes in 4 saucy, lip-smacking flavours and shapes. This NUTRI-LICIOUS product is

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made from 100% SUJI and is also a source of protein & fibre.

3 MAGGI SAUCES

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

4 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 coastal flavors right to your kitchen. It has been developed by retaining the real flavor from Sri Lankan Coconuts in a powder form. Simply 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.

5 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

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VEGETABLE (6).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 colours, living up to the Maggi promise of Taste Bhi, Health Bhi!.

Source: www. Maggi.In Retrieved on 2.10.15 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 4th Position after China, Indonesia and Japan. (12)

Figure 3: Global Demand of Instant Noodles

Source: http://timesofindia.indiatimes.com/business/india-business/Nestles-70-noodle-market-share-faces-heat/articleshow/47534610.cms

The demand of instant noodles is picking up (Diagram-2)and expected to reach US $ 1.85 billion by year 2019.

There is lot of scope in the said market (Product Category). (13)

Figure 4: Size of India’s Noodles Market.

Source: http://qz.com/420932/charted-how-maggi-rules-indias-noodle-market THE CONTROVERCY: CLAIMS AND COUNTER CLAIMS Maggi noodles, Nestle’s flagship brand, were doing sales of over Rs 2,000 crore before the ban. The recall exercise of Maggi noodles has cost Nestle Rs 320 crore and another

Rs 1,270 crore in brand loss according to global valuation consultancy Brand Finance. (14)

An officer of the UP Food Safety and Drug Administration based in Barabanki (UP) ordered tests on a dozen samples of Nestle’s Maggi instant noodles at the state laboratory in Gorakhpur, and repeat tests at the Central Food Laboratory in Kolkata, a referral lab. The Gorakhpur lab tested for

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monosodium glutamate (MSG) to check Nestle’s claim that Maggi had none. Both tests found MSG; in addition, the Kolkata lab found “very high quantities” of lead — 17.2 parts per million. 25. Based on the findings, UP FDA filed a complaint in a Barabanki court. On June 8,2015, Union Food Minister directed the statutory regulator, Food Safety and Standards Authority of India (FSSAI), to conduct nationwide tests on Maggi. (15)

According to Food Safety and Standards Rules, 2011, MSG, a “flavour enhancer”, should not be added to food for infants below 12 months. MSG is not permitted in over 50 items, including “Pastas and noodles (only dried products)”, but is allowed in the seasoning used for noodles and pastas. Under Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011, permissible levels of lead range from 0.2 parts per million in infant milk substitute and infant foods to 10 ppm in categories like baking powder, tea, dehydrated onions, dried herbs and spices flavourings. For instant noodles included in the “foods not specified category”, the permitted level of lead is 2.5 ppm. Instant noodles like Maggi are identified under food category code 6.4.3, which includes “pre-cooked pastas and noodles and like products” that are “pre-gelatinised, heated and dried prior to sale”. These categories of food are governed by Codex international standard 249, standards of food safety recognised by WHO. The masala used in these noodles is identified in code 12.2, which includes herbs, spices, masalas, seasonings, and condiments (eg., seasoning for instant noodles), where the use is “intended to enhance the

aroma and taste of food”, according to FSSAI regulations. (16)

In addition to the regular testing of the finished product and raw materials, the company has carried out extensive tests of MAGGI Noodles in India. Nestlé India has tested more than 2,700 product samples of MAGGI Noodles, including 1,100 samples at independent accredited labs in India and abroad. These tests represent more than 165 million or 16.5 Crore packets of noodles in total. These tests found that levels of lead in the products were within the food safety limits specified by the Indian authorities, which is why we are saying the products are safe for consumption. On 30 June, the Hon’ble Bombay High Court allowed Nestlé India to continue exporting MAGGI Noodles. (17)(18)

Nestlé India currently exports MAGGI Noodles to Nestlé in Canada, UK, Singapore and Kenya and to third parties in the US, Australia and New Zealand. (19) The noodles made for the export market are the same as those for the Indian market, although Canada requires a different kind of salt to be used. Packaging materials are designed to meet the regulatory requirements of each importing country. Food standards authorities in USA, Canada, UK, Singapore, Australia and New Zealand have all tested samples of MAGGI Noodles and confirmed that they are safe to eat.

Table-2 Summary of Statements of Authorities in various countries

Country Authority/ Agency Explanation USA (20) US Food and Drug

Administration (FDA) The US Food and Drug Administration (FDA) has confirmed that tests on several shipments of MAGGI noodles from India did not find any health risks to consumers. The FDA has released the noodles for sale in the United States. 11 August 2015 – We have learnt from our official importer in the United States, House of Spices, that the US Food and Drug Administration has tested several shipments of MAGGI Noodles from India for lead content. Finding no unsafe lead levels, FDA released the noodles for sale in the United States.

Canada (21) Canadian Food Inspection Agency (CFIA)

2 July 2015 – On June 5, 2015, the Canadian Food Inspection Agency (CFIA) issued a Consumer Advisory regarding the actions taken in response to the incident in India involving MAGGI brand noodles, including Nestlé's removal of products from the Indian marketplace. The CFIA's food safety investigation did not find any health risk associated with the consumption of MAGGI brand noodle products sold in Canada.

UK (22)(23) UK Food Standards Agency (FSA)

1 July 2015 – The FSA can confirm that results from testing samples of MAGGI Noodles in the UK have all found that levels of lead in the product is well

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within EU permissible levels and would not be a concern to consumers.

Vietnam (23)

Vietnam Food Administration (VFA)

22 June 2015 – The Vietnam Food Administration has received a report from the Public Health Institute in Ho Chi Minh City on tests conducted on MAGGI Noodles imported from India by Toan Cau Pans Company Ltd, address: 102 Topaz 2, Saigon Pearl 92 Nguyen Huu Canh, Ward 19, Binh Thanh, Ho Chi Minh City. The test results of two samples showed that lead (Pb) was not detected in the product.

Australia and New Zealand (24)(25)

National Measurement Institute

19 June 2015 –Testing by the National Measurement Institute in Australia has confirmed that MAGGI Noodles imported from India are completely safe to eat. Testing showed that levels of lead were well within the acceptable limits set by the regulator, Food Standards Australia and New Zealand.

Singapore (26) Agri-Food and Veterinary Authority (AVA)

11 June, 2015-Results from the Agri-Food and Veterinary Authority’s (AVA) recent food safety tests on MAGGI Noodles available in Singapore, including those produced in India, showed that the noodles met Singapore’s food safety standards and do not pose food safety risks to consumers. On 8 June, AVA confirmed that MAGGI Noodles available in Singapore are safe for consumption.

Ironically, in a major boost to Nestle India, FSSAI-approved laboratory of Central Food Technological Research Institute (CFTRI) has found Maggi noodles to be in compliance with the country's food safety standards. CFTRI had tested five samples sent by Goa Food and Drug Administration (FDA) when Maggi was banned in June in the wake of findings in Uttar Pradesh and other states that the instant noodles brand had lead levels beyond permissible limits. This was later denied by the authorities of FSSAI. INDIAN STATES BANNED MAGGI: Delhi/3 June, 15; Maharashtra/5 June, 15; Punjab/ 6 June,15; Assam/5 June,15; Bihar/5 June,15; Madhya Pradesh/5 June, 15; Tamil Nadu/4 June,15; Jammu and Kashmir/4 June,15; Gujrat/4 June,15; Uttrakhand/4 June,15; Goa/7 June,15; Karanataka/7 June,15; Andhra Pradesh/4 June,15; Kerala/3 June,15. 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 standards are 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 monitor 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. 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 Organisation’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

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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

flavour. The level of glutamate for example in Maggi noodles is 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. (27)

Table-3: Nestle is Committed to Food Safety

FOOD SAFETY IN NESTLE: FACTS FOOD SAFETY IN INDIA: FACTS 1.“FOOD SAFETY IS OUR NUMBER ONE 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 ANALYSES A YEAR are carried out for Nestle. Our own 26 NQAC (Internationally Accredited) laboratories perform around 3 million analyses a year. 4. We have 8000 persons working in Quality Assurance worldwide. 5. We have much Stringent inbuilt control to GUARANTEE SAFETY 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 TURN INTO ISSUES. 8. In 2013 in Switzerland we opened the MOST ADVANCED LABORATORIES OF THEIR KIND to study food borne pathogens. We built them so we can respond to emerging risks.

1.”WE HAVE SAME RIGROUS APPROACH TO FOOD SAFETEY IN 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 MAGI NOODLES. 4.We have sent samples from an additional 600 BATCHES TO AN EXTERNAL LABORATORY. 5. We have tested samples from 1000 BATCHES AT OUR OWN ACCREDITED LABORATORIES. 6. WE ARE ALSO TESTING THE RAW MATERIALS such as the wheat we make the noodles with and the spices we use to flavour the noodles. 7. ALL THE RESULTS SHOW THAT THE LEAD IS BELOW THE LEVELS SPECIFIED BY REGULATORS.

source: www.nestle.in retrieved on 26.9.15 MAGGI: A SWOT ANALYSIS 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. 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 foodles 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 flavours 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

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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 popularised 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 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 specialise 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 CHF 50 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)

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 tonnes 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 Nestle'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

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programme, 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 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 labelling, 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 upmarket 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

• 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 savoury 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 favourite 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

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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%.

• 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, Lux as bathing soap etc. in FMCGs.

DISCUSSION For over thirty years, Maggi has been the part of the Indian food culture. We must understand the strength of Maggi as a brand and realize that the number of people who will be hurt by the ban on Maggi will be in millions. Maggi is owned by Swiss company Nestle and sold in 130 nations, but the sale of Maggi in India accounts to 30% of its turnover. These figures are sufficient enough to understand the brand value of Maggi. The news of Maggi being harmful to health is shocking for everyone including the elite and the common man. But people have diverse opinion about the Maggi controversy. Several people have straightaway supported the ban on Maggi and while some have some have asked the question “Why only Maggi?”.Many outlets and institutions have banned Maggi but there is no common opinion about the Maggi ban in different states of India. Many states like Maharashtra, Goa in Western India, Jammu Kashmir, Himachal Pradesh in North and nearly all states in East and South, have not yet banned Maggi. Maggi is popular in Pakistan, Nepal, Bangladesh and Sri Lanka but they are yet to act on this.

? Is Maggi Safe? ? Is Maggi harmful for human consumption? ? Is the “Maggi controversy” justified?

? Is this a “media trial”? ? Why Maggi is not banned by all the states of India? ? Why Maggi export is not banned? ? Why countries like USA, UK, Australia & New

Zealand etc have given clearance to Maggi? ? Is this going to dent Make-In-India campaign? ? Is this questions the sovereignty of MNC’s working in

India? ? Is this an Ethnic/cultural/social/political/financial

oriented issue? ? How do you see Maggi’s come back?

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