Nestle’s Maggi, long considered one of India’s most trusted brands, has taken a huge knock in terms of brand value and sales ever since the recent controversy broke over allegations that it had lead and monosodium glutamate (MSG) in excess of permissible limits and was, therefore, unsafe to consume. With more and more states deciding to randomly test samples and banning sales in the interim, coupled with a host of retail chains removing it from their shelves, the company has its task cut out.
Nestle’s claims that the product is safe — and that it has got it tested by external and internal agencies — haven’t really brought any respite.
Assuming the best-case scenario — the product finally passes safety tests, as happened in a Kerala government lab — it still would not be easy for the company to regain consumer confidence and brand equity.
Though brands like Coke and Pepsi (following the pesticide issue) and Cadbury (following the issue of worms in chocolate) have managed to bounce back after crises, it took long and sustained efforts to engage with the public. For cola makers, several outlets, including school canteens, remain out of bounds even now.
Following the Delhi government’s decision, four more states — Gujarat, Jammu & Kashmir, Uttarakhand and Tamil nadu — banned the sale of Maggi noodles on on Thursday, pending laboratory clearances.
Maggi was ranked number 18 in the BrandZ Top 50 Most Valuable Indian Brands study, conducted by Millward Brown and commisoned by WPP last year, with a valuation of $1,127 million. It is expected to have eroded in brand value by at least 30-40% last week alone, say brand specialists.
Brand consultant Harish Bijoor says Nestle India first needs to address the concerns of the regulator, the Food & Drug Authority of India (FDI), before it can launch any “damage control” messaging on mainstream media. The brand value is sure to have taken a beating given the trust it enjoyed in the market, he said. It has also been slow to react.
“But brands such as Pepsi , Cadbury and Coca-Cola have also faced questions over quality in the past, and did not not put up any white paper for clarity. Public memory remains short. It remains to be seen whether the Maggi brand can bounce back,” he said.
Shailendra Singh, joint managing director, Percept, said this could very well open Pandora’s box and invite attention for 200-plus brands in the packed foods category. “If the Food and Drug Administration (FDA) is serious about cleaning up the foods business, this is an opportunity for it to go after several other brands. Why single out Maggi, or rather Nestle India alone? That said, this generation thrives on snack foods. Despite many damaging videos on Youtube on the ill effects of colas, they still sell,” he says.
In 2004, Cadbury India, the country’s largest chocolate major, roped in superstar Amitabh Bachchan to announce new packaging for its flagship Cadbury Dairy Milk, following a tenacious worm infestation controversy. Abhijit Avasthi, former national creative director at Ogilvy & Mather who was involved with the campaign, said Cadbury was honest in its approach.
“The brand first admitted that there was a problem with some of the packs. It then revamped its entire packaging. They signed up a credible star — Amitabh Bachchan — to communicate that there was a quality issue which it had addressed. It was done with a lot of sincerity and openness, and that greatly helped the brand reclaim its lost ground. One thing that Cadbury enjoyed, which Maggi also shares, is that it was absolutely loved by the people…they were wanting to forgive it”. Avasthi said Amitabh Bachchan had done his share of due diligence before he took up the task of re-assuring the public. “He visited the factory and was assured of the quality standards. Only then, did he agree to be a part of it,” he said.
Tough, not impossible
* Though brands like Coke, Pepsi and Cadbury have managed to bounce back after crises, it took long and sustained efforts to engage with the public
* Brand consultants say Nestle first needs to address the concerns of the food regulator before it launches any “damage control” messaging on mainstream media
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