Maggi was launched by Swiss-company Nestle with much fanfare and the promise of “2 minutes noodles’ which soon became the catch line and a major marketing success, gaining 70% share of the noodles market. Then this June, the MSG controversy (Monosodium glutamate also known as sodium glutamate and rumored to be the cause of cancer) hit the popular brand in a way, few could imagine, and the product was banned. The controversy whether justified or not will always remain, but the damage was done which put the company in dire straits. The brand accounted for 30% of Nestle’s sales which fell by 32% to Rs 1,736 crore in the quarter.
Come December, and the brand will be back on the shelves as fresh samples from new batches have been sent to 3 accredited laboratories at the direction of the High Court. The company has intensified its media presence and hopes to regain lost ground with its #WeMissYouToo campaign.
According to Abneesh Roy, associate director at Edelweiss “We appreciate the company’s effort to up the ante on advertising and promotions, but this will depress margins in the coming quarters. We believe Nestle is unlikely to garner the earlier 70% share of the noodle pie”
It is not only the brand in Nestles stable that has shown negative performance. According to Edelweiss, “Nestle India’s third-quarter sales were below our estimates due to higher-than-expected rub-off impact of the Maggi ban on other brands”.
So the cash cow that accounted for Nestle’s major success also pulled down with it the other company brands, a lesson to be learnt by marketers. Now it’s up to Maggi to ride the crest and pull along with it the other brands. The question that remains, has the consumer lost trust and confidence in one of India’s most popular brands? Or does the consumer believe that the ban was unjustified and welcome back the brand with open arms?
If consumer sentiment on the internet is to be believed, looks like Maggi’s comeback is eagerly awaited.