Sunday, June 14, 2015

The Undoing of Nestle in India

Maggi Noodles was a great success story in many ways. When it arrived in 1983, the Indian concept of snacks did not necessarily include Noodles. Its timing was great - just as television and cricket were conquering Indian homes and middle classes were looking beyond government jobs - and its communication was perfect, the 2-minute food! It combined global aspiration, motherly love and emancipation of women into one, the perfect combination for India. The traditional Indian snacks, all those Puri-Subji and Dosas, gave way - none of those could be made within a few minutes and without great skill and preparation. Maggi even tasted modern, always warm and alien to any taste one has grown up with. This was, in a way, one of the first stirrings of culinary globalisation!

As it falls apart in the wake of the nationwide ban on Maggi this month, this makes a cautionary tale. One regional authority first discovered unusual amounts of Lead and MSG in Maggi, and then the panic spread nationwide. It was a domino that undid a Billion Rupee brand, at least for the moment. It was fascinating to watch Nestle reacting to this, as one of their main brands in the country fell apart. Their silence almost confirmed something was wrong all along! They moved between denial and callous disregard of Indian lives, and only started withdrawing the snacks from store shelves a few weeks later. And, as if to save face, they moved to Mumbai High Court quite late in the day, implausibly claiming that their own, and independent tests commissioned by them, found that Maggi is fine! The notion that anyone would believe them at this stage should tell us how little they cared about what Indians think.

But it gets worse. In this rather sordid tale of one multinational trying to save its name after it has realised it was caught red-handed doing something wrong, Nestle started making claims about India in general. Stories appeared in Western Press, no doubt fed by Corporate PR, that banning Maggi is nothing but the traditional male domination reasserting itself, as they want the women to lose their freedom afforded by 2-minute food (see here) When the American regulators caught up and banned the snack from entering United States, Nestle claimed that the exported batch may actually be fake. What started as a food having inappropriate level of Lead and MSG, has now become a full scale Nestle versus India battle, so that the company can save its image by making India a male-dominated, inefficient bureaucrat-led, fake product exporting country! 

This is almost a classic lesson on how not to handle a crisis. All the textbook lessons that the Marketers learn - act swiftly, decisively and honestly in the face of a crisis - were defied in this case. There was no action, no decision and indeed no honesty. As if they were counting on the poor level of consciousness of the Indian consumers, Nestle was silent and it did allow Maggi to be sold till the time ban was really enforced and it became news nationwide. By the time they did anything - tried to withdraw the snacks from store shelves and move court simultaneously - everyone was convinced that they were trying to get away with murder. It became a classic setting for a new episode of Multinational versus the Market, where, one must note from experience, while the former may have more power, market always wins in the end.

So, the brand is dead - at least, for me. So ingrained was the brand loyalty, the snack found its way in my weekly shopping basket, even in Britain. I have now thrown the unused packs in the bin, and regretted using it ever. Whether or not they clear up the mess, Maggi is dead in water. Even a rebranding, which would surely come in a while, would not convince me to buy another snack from Nestle. 




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