Nayan Goyal#1, Purushottam Yenurkar*2
#1B.Com, ACA, LCS, DISA (ICAI)
Shanti Madho, 49 AVG Layou,t Lakadganj, Nagpur, 440008, Maharashtra (India)
*2M.Com, M.Phil, PGDBM, Ph.D
Priyal Computer Academy, Chitnavaspura. Sakkardara Road, Nagpur, 440008, Maharashtra (India)
“One man’s loss is another man’s gain”. Though the famous adage proves to be true in most cases, it certainly doesn’t seems to be true in case of the infamous Maggi controversy. The way the consumers behaved with respect to the entire facade was as unpredictable as Maggi ban. The instant noodles that fashioned a new category of packed food products in India, has also inadvertently shaped a new angle with regard to consumer behaviour.
Maggi, a habitual name in almost every Indian household, began its journey in the country in 1983, the year when India won the world cup for the first time – they instantly caught the nation’s attention. Originally, the instant noodles was meant to be targeted for working women to ease their work but it got more popularity amongst children and hence, the campaign was later retargeted towards children. The “two minute noodles” advertising campaign on state run television with which Maggi launched itself had an immediate impact on people and turned out to be an instant attraction because of its liberating message for women. This idea was portrayed using the tagline, “fast to cook, good to eat” and the character of “Maggi Mom”, who was as loving and caring towards her children as her own mother was towards her, and who could also manage her workplace and familial responsibilities because she has Maggi. Also the fact that it came from an eminent brand, “Nestle”, public had confident that the product was out of harm’s way. Moreover, Maggi noodles was aggressively promoted by Nestle through schemes like free samples, gifts on return of free packs, etc.
The pace at which Maggi grew across the nation was astounding. Within the first 25 years of its launch, it was the owner of 90% of the instant noodles market in India, the category it had created itself. It was evident from the fact that Maggi, like other basic needs, could be found in the remotest part of the country. Whether it was the highest of mountains in Uttarakhand or the sheer emptiness of the deserts in Rajasthan; whether it was a student’s hostel, or a kid hankering for an evening snack; whether a person was a vegetarian or a non – vegetarian; no matter if a person could cook or couldn’t cook; irrespective of the age of the populace; regardless of the stature of an individual; Maggi was the “go to”, effortlessely available, “easy – on – the – pocket” snack.
Another instance of its popularity could be taken from the year 2008, when the brand launched its “Me and Meri Maggi” campaign, under which it invited people to submit their Maggi chronicle. Predictably, the campaign received an enormous response with more than 30,000 entries. It could be said that Maggi had more or less become the fifth basic necessity of the Indian people apart from food, clothing, shelter and water. Though the world’s leading brand was Top Ramen, Nestle took the cake in India with Maggi.
Maggi became the conqueror for Nestle, when in July 2001, it replaced Nescafé as its core brand. Owing to its popularity, in 2005 Nestle introduced various other products under the flagship of Maggi like Maggi Atta Noodles, Maggi Cuppamania, Maggi chicken noodles etc..
The financial figures of Nestle India also reflects the admiration of consumers towards Maggi. About 20% of the revenue of Nestle India comes from Maggi and its buffet of complementary products which amounts roughly to ₹1500 crores (₹15bn, $235m, £149m) in annual sales.
Apart from personal consumption, Maggi also created livelihood for many “Maggi enterpreneurs”. A lot many tapris (small food joints) and cafeterias survived solely by selling Maggi in a dozen innovative way.
IV. DOWNFALL AND ITS CONSEQUENCES
So when the government announced Maggi as “unsafe and hazardous” for human consumption after finding lead beyond permissible limit and presence of taste enhancer monosodium glutamate (MSG) after specifically stating on the packet that it doesn’t contain any artificial taste enhancer; there was no two way that people were taken aback. The way the consumers behaved was not something that was expected. The Wall Street Journal reported that there are an estimated 400 million uneaten packets of Maggi in India. If these noodles were boiled, there would be enough noodles to go around the Earth 200 times, or make 10 round trips to the moon.
The reaction of Maggi row on people was like chalk and cheese. Some people lost their complete faith in any kind of packed instant noodles irrespective of the brand while other devoted Maggi lovers even resorted to buying Maggi in black for almost five times the price of the product. Another category were the people who were impervious by the ban. They found an alternative during the ban and when their favourite Maggi returned to shelves, they found solace in it.
Anticipation was that the ban on Maggi would result in the rise of sales of other packed noodles proportionately. But The Economic Times stated that in India which is world’s fifth largest instant noodles market till the other day, is set to lose that status as sales in the category has crashed by about 80% across the country following the Maggi controversy, according to retailers and industry insiders. It also assured that the CEO of one of the country’s biggest organised retail chains, on condition of anonymity, stated that “the consumer’s trust from the category as a whole is gone.”
Owing to the Maggi row, Nestle posted its first loss in 17 years. Nestle reported a net loss of ₹64.40 crores for the second quarter ended June, 2015, in contrast with a net profit of ₹287.80 crores in the corresponding quarter last year and a profit of ₹320 crores in the previous quarter ended March, 2015.
The other contemporary brand, Yippee noodles, made by ITC witnessed the growth in its sales due to Maggi row. Its sales almost doubled and market share increased to 50% from about 10-12%; but it still could not suffice the sale of Maggi. Similar was the case with other packed instant noodles brand. It can be derived that people were taking a crack at other alternatives in absence of Maggi, but principally around 50% of the consumer discontinued consumption of instant noodles. A major indian brand also took it as an opportunity and launched its own instant noodles brand by the name of Patanjali Atta Noodles. But consumers didn’t shower their blessings on any other brand as much as it had been on Maggi.
V. WELCOME BACK MAGGI
After almost 5 months of dry spell, the Maggi was reintroduced in Indian markets with all the amendments and approval of food authorities and judicial system. Just weeks after its reintroduction, it regained its number one spot in the instant noodle category in India. However, the outlaw phase took a toll on the erstwhile instant noodle giant. January, 2016 data from Nielsen shows its share of the Rs 2,000 crore instant noodles market dropped to 42%, down from a commanding 77% in January 2015. Meanwhile, ITC’s Yippee! capitalised on Maggi’s absence to catapult to a 33% share. It has been estimated by some experts that it might take up to 3 years for Nestle to regain its pre-ban prominence.
From the above figures, it can be said that a certain favouritism exists with respect to maggi amongst Indian masses. Though some people might be abstaining from it due to the entire indictment, Maggi will still flourish. No matter how many other companies introduce products in the category, Maggi will remain frozen as the number 1 instant noodle for a long time.
Though time and again, Maggi has been put in bad light, by sometimes referring to it as junk food, or by not stocking it in school and college canteens; it is apparent from the sales that we still love Maggi and consume it keeping all the assertions behind us. It points out that sometimes consumer can be very rigid with their choices towards a product.
Traditions are hard to change in India and I can conclude that Maggi has become a tradition that is here to stay.
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- Bhattacharyya, S. (2015, June 4). How maggi became an iconic indian snack – BBC News. Retrieved May 5, 2016, from BBC News: http://www.bbc.com/news/world-asia-india-33002261
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