The tale of Nestle’s comeback

By: Aaisha Ansari and Abhishek Kumar Mishra

Be it enhancing the quality of life, or amassing the global presence in beverages, and chocolates; be it contributing to a healthier future or making its mark in the market as a nutrition, health, and wellness company; Nestle, has never failed to lead from the front.

Striving for sustainable growth, and shareholder satisfaction, Nestle India, provides consumers with products of global standards. The company insists on honesty, integrity and forming long-term, healthy and sustainable relationships.

That being said, what makes Nestle unique, is a question that often comes to mind. What is it that differentiates it from its competitors? Why is it known as the best food and beverage company?

The answer lies in its Unrivalled Product and Brand Portfolio

When we look at Nestle’s product portfolio, it is visibly larger than any of its competitors. The company offers over 2000 different product choices, spread over a gamut of options in Beverages, Breakfast Cereals, Chocolates and Confectionery, Dairy, Nutrition, Foods etc.
Leveraging its wide product portfolio, Nestle is able to satisfy its consumers’ need and target a wider consumer segment.

Not only this, there are several factors, which also contribute in Nestle being at the top of its game in the industry. Talking of its geographical presence, Nestle believes that it has achieved this through immense amount of research and development. Probably this is the reason why some of India’s best-known brands, are part of Nestle’s family. It owns recognizable brands such as Nescafe, Maggi, KitKat and Munch, which really help in a brand recall, and an increase in consumer awareness.

Being a company that always regards contributions to society highly, Nestle also prides itself in being extremely environmentally conscious. It also has the following ambitions that it plans to achieve by 2030.

Not forgetting some of the finest ad-campaigns in the industry, helping us reminisce the good times. Whether it is good food- good life; or making ordinary, extra-ordinary; or telling us how it all starts with a Nescafe, Nestle’s brands undoubtedly have some of the most worth remembering taglines.

But is a company, solely about its success stories? Does it not go through situations which
tarnish the brand image? Does it always revolve around increasing share prices? Ideally, not.

Nestle has had a similar story. The famous case of “The Maggi Ban” is not forgotten and is a testimony to the comeback that Nestle has made in the industry.

What exactly went down – The Crisis

Every state in the country has a Food Safety and Drug Administration (FSDA) department, which ensures the safety and quality of food products and medicines sold, purchased, imported, or manufactured in the state. In March 2014, Sanjay Singh, food inspector at Uttar Pradesh’s FSDA was on his routine inspection when he spotted the bright yellow Maggi noodles packet in a retail store. It was not just the packets that caught his attention but a label on them which said: “No MSG” (Monosodium Glutamate). He picked those packets and sent them to the FSDA laboratory in Gorakhpur for testing. A few weeks later, the test results came which proved positive. These samples were then sent to Central Laboratory in Calcutta for testing, where not just the MSG result came positive but also the lead content was found out to be 17.2 ppm, nearly 1000 times more than claimed by Nestle. The FSDA department, U.P sent a formal notice to Nestle India seeking clarification on the test results. Nestle India did not take this notice seriously and replied with an internal test report. This report got a place in a local new paper of U.P. and became the headlines of many national dailies. Nestle India still did not take this seriously and in an official press conference deemed Maggi to be “safe to eat”.

However, FSSAI took this matter into serious consideration and asked Nestle to recall Maggi noodles from the market. After this, the company’s global CEO Paul Buckle met the regulators in Delhi, but it was too late for any sort of talks. They had to recall 38,000 tons Maggi Noodles available in the market.

After-effects of the crisis – The Comeback
Nestle had never imagined that this could be such a big crisis. Prior to the ban, Maggi had a market share of nearly 80% in the instant noodles segment which came to zero overnight. The first step after the “recall” was confidence building. Nestle India called for regular press conferences to put forward its message in public. Further, Nestle India sort help from APCO
Worldwide an American Public Relations firm, they set up a mechanism for building customer relationships, be it through customer relation helplines or posting FAQs on websites regularly.

It also used social media engagement to answer all the queries raised by consumers and build trust among them.

Apart from these short-term changes, Nestle India used this crisis for its benefit and made some organizational changes too, so that they don’t have to face a similar crisis in the future.

It emphasized on the use of benign raw materials and came up with a new motto of “growth through innovation and renovation”. This decreased the new product launch time from 2 years to 6 months. They came up with new categories like breakfast cereals, ready-to-drink cold beverages, and food supplements which are growing at a higher-than-average industry rate.

The Maggi crisis had reduced Nestlé’s retail reach from 5 million to 3.2 million which has now increased to more than 4.5 million because of expansion in the FMCG product range. To increase focus on the market, Nestle has decentralized the decision-making process by creating 15 verticals that now target specific geographies with their respective hyper-local
strategies. The Maggi crisis is thus, truly a distant nightmare.

A journey becomes worthwhile as it goes through a series of successes and failures. It is
never really, only about the failures, but about the comeback that the company makes as it transcends through various forms of turmoil.

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