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Nestle’s Maggi is India’s favorite instant noodle again

Quartz india
Quartz india

Less than a year after it suffered a quality crisis in India and was forced to remove its products from store shelves, Nestle’s Maggi noodle brand has recovered nearly two-thirds of its former market share.

“Nestle India is delighted to announce that Maggi noodles has strengthened leadership position with more than 50% market share in the noodles category as per Nielsen report,” the company said in an April 19 filing (pdf).

Last June, laboratory reports alleged that samples of the instant noodles contained lead and higher than permissible levels of monosodium glutamate, or MSG. On June 5, following backlash from the country’s top food regulator, the Food Safety and Standards Authority of India, Nestle withdrew Maggi from the market.

It destroyed more than 35,000 tonnes of the product, using more than 10,000 trucks to ferry the noodles to incineration centers for high-temperature thermal destruction in cement kilns.

The row continued for the next six months as consumers and retailers shunned the popular brand known for its ease to cook and distinct taste.

The developments shook consumer confidence in packaged food products.

Like in most recalls globally, the company incurred hefty financial losses. In its annual report for 2015, Nestle confirmed that business was “severely disrupted by the Maggi noodles issue and continued to significantly impact business for a major part of the year.”

The comeback

Prior to the crisis, Maggi enjoyed close to 77% market share in India’s ready-to-cook noodles market, according to a research from Edelweiss Securities.

By June of last year, the market was swept clean of Maggi noodles. But the disappearance lasted only till August, when the Bombay high court lifted the ban, paving the way for the brand’s attempt at a recovery.

Between November and December, amid an advertising blitzkrieg—including the #wemissyoutoo social media hashtag and a “Welcome Back Maggi” ad campaign—Nestle brought back Maggi noodles.

By the end of the year, it had a 33% market share.

Amid crisis, Nestle India also ushered in a new top chief executive, Suresh Narayanan, who had promised to bring back “double-digit” growth to Nestle India through a mix of volume and price increases.

“I’m also happy that we have gained month on month, and we continue to lead the noodles category with over 50% market share,” Narayanan said in the company’s April 19 statement, citing Nielsen numbers.

Nestle India also announced the re-launch of two varieties, Maggi Atta and Maggi Oats Masala.

“We understand the changing lifestyles of generations and have constantly innovated products that add value to the favourite Maggi noodles. With the latest relaunch, we are aiming to provide more choices to suit consumer preferences, driving greater volumes and building back our market share,” Narayanan said.

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