How Nestle is Rebuilding in India – 18 months after the Maggi Ban

  • In the autumn of 2015, Maggi noodles, a brand Nestle build over 30 years, crumbled as the national food safety regulator banned its sale. As the product went up in flames, Maggi branded products took the heat.
  • From 80% market share in Indian noodles market, it went down to 0% in a month. Maggi returned to shelves in Nov’16 has since conquered 57% of market share.
  • Nestle decided to frame a 3-year plan which included entering into new segments. This was a long time after which Nestle was stepping out of its comfort zone, 1st time after 1990, when it forayed into chocolate business.
  • Entering into new segments would give it more balance as currently it has a 30% dependence on Maggi. Over the coming quarters, the company will enter 5 new product categories: Nespresso (a coffee machine), Dolce Gusto (a coffee capsule system), pet care, healthcare and skincare.
  • Ground work has already started with the launch of 30 new products. Nestle is looking to tap the rapid urbanization in India, the educated middle class and benefit from rising health awareness as well.
  • For Nestle to launch products that are relevant for every segment, it will be easier to convey messages and convince the middle class through marketing communications, advertising and social media campaigns.
  • Even before the Maggi ban, Nestle was struggling to stay in line with India’s consumption story. It was losing market share in almost every product or category, except noodles.
  • In its new avatar, Nestle India is flexible, responsive and result-oriented. Some of its recent launches have already started showing results, coffee and beverages have returned to growth.

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