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Nestle India loses its head in Maggi noodle fiasco

Swedish FMCG major Nestle on Friday recalled its current head of the India operations Etienne Benet to its Switzerland head office and appointed Suresh Narayanan…

Nestle India loses its head in Maggi noodle fiasco
Nestle is estimated to have taken a hit of Rs 450 crore and had to destroy over 30,000 tonnes of the Maggi noodles. (Reuters)

Swedish FMCG major Nestle on Friday recalled its current head of the India operations Etienne Benet to its Switzerland head office and appointed Suresh Narayanan as his successor — the first Indian to get the position after a gap of over 16 years.

The development comes at a time the company is fighting its worst public relations crisis in the country following the controversy relating to its popular instant noodle Maggi being unsafe for consumption, eventually leading to its withdrawal from the market early last month. The company has since challenged the government’s withdrawal order in the Bombay High Court.

Narayanan, a former Nestle India executive and currently chief executive of the company’s Philippines unit, will take charge from August 1, a move that analysts say is positive since it would be advantageous for an Indian to handle the crisis at this stage and make a fresh beginning. Analysts also said that since the company has faced widespread criticism over its slow handling of the crisis, a change of guard was expected. “A new face brings in fresh perspective, sympathy and a new way of handling the situation. In this case the new head being an Indian definitely makes it a wise move,” said brand strategist Harish Bijoor.

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Kiran Khalap, co-founder, Chlorophyll Brand and Communication, a Mumbai-based brand consultancy firm, agreed, saying that “complexities of the Indian market is such that expats often fail to understand how to handle a difficult situation. Keeping in mind how tough it is to manage a business in India, a ‘desi’ boy is always better than a ‘videshi’”.

“Nomination has been received from Nestle SA for the appointment of Suresh Narayanan as the MD of Nestle India with effect from August 1, 2015,” the company said in a statement.

This is not the first time that a global firm with operations in India has resorted to a change of guard in the wake of a controversy. In the past, beverage maker Coca-Cola and Cadbury India had effected changes in the top leadership when besieged with the pesticide-in-colas and worms-in-chocolates controversies, respectively.

Last month, at the height of the Maggi controversy, Nestle’s group CEO Paul Bulcke had to fly down to India where he addressed a crowded press conference to reiterate that its products are safe to consume and it applies the same quality standards and the same food safety and quality assurance system everywhere in the world.

Though sales of Maggi in India account for roughly 0.005% of Nestle’s global revenue of almost 92 billion Swiss francs ($98.6 billion), Bulcke had acknowledged that the recent developments had damaged its brand and the company was in for a long haul. “If you have confusion, there is something wrong with communications. That’s why we are sitting here,” he had said.

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First published on: 25-07-2015 at 01:22 IST