Case Study On Maggi

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Maggi case: Will Maggi bounce back? Would Nestle be able to leverage the crisis and gamble on the Indian market?
Introduction
In beginning of June 2015, India’s Food safety administration (FDA) ordered Nestle India to recall its popular 2-minute Maggi noodles after tests showed that the product contained high levels of lead and MSG. The recall was followed by a ban on Maggi by most states of India. It was a precarious situation for Maggi as its most selling brand was facing heat and the whole reputation of Nestle was at stake. This case presents the development of the situation, the reaction of Nestle & how the situation could have been better handled.
Background
About Nestle
Nestle was founded in 1866 by Henri Nestlé in Vevey, Switzerland.
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It has 7 other manufacturing facilities located all over the country. It has 4 branch offices which deal with sales and marketing activities.

About Maggi
Nestle came out with Maggi in India in 1983. The market was difficult to enter at that time but Maggi was able to find place in Indian kitchens. Maggi was able to reach a 90% market share over the period of 32 years in the instant noodle category. It dominated the noodle market and became a top brand. Maggi was in fact the pioneer of noodles in India but recently it started facing stiff competition with a lot of other products coming up in the market.
About Competitors
Major competitors of Maggi include Sunfeast Yippee belonging to ITC. It was launched in early 2000 and over the course of the decade has been able to give stiff competition to Maggi.
Top Ramen is another competitor of Maggi. It was launched in 1988 by Nissin which is a Japanese company. Slowly and steadily, Top ramen has also established a firm presence in the Indian market.
HUL, India’s largest FMCG player launched Knorr brand in the instant food category. It has become a popular brand of late. It has come up with products which are combination of soups and noodles and have been launched in various variants.
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However, we use hydrolysed groundnut protein, onion powder and wheat flour to make Maggi noodles sold in India, which all contain glutamate. We believe that the authorities’ tests may have detected glutamate, which occurs naturally in many foods.” FSSAI-approved testing methods for MSG only test for glutamic acid, which is a component of several foods, including hydrolised vegetable proteins. “Tests in India are not as sensitive as those in developed countries, where individual sources of every component can be identified”. Nestle India has also said it “regularly monitors” for lead, including testing by accredited

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