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Nestle entangled! Braving the Maggi Nood...

Chaudhri, Vidhi, K...

Case

Nestle entangled! Braving the Maggi Noodle Crisis in India

Chaudhri, Vidhi; Kaul, Asha

IIMA-COMM0013(A) | Published June 15, 2016 | 17 pages Case

Collection: Indian Institute of Management, Ahmedabad

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The case describes the Maggi debacle faced by Nestle in India. On May 21, 2015, the Food and Drug Administration (FDA) ordered Nestle India to recall Maggi after confirming presence of high levels of lead and Mono Sodium Glutamate (MSG) in the product. The case traces the events in the Maggi crisis and deliberates on the reputational loss as evidenced in the boycott of the product, sagging top and bottom line of the company, mounting consumer hostility and loss of faith and trust in leadership. As the events unfold the reader is able to discern the challenges that confront organisations in a crisis situation, and reflect on Nestle’s crisis management strategies. The case provokes the reader to deliberate on the aftermath of the recall. Will Nestle be able to get Maggi back on the shelf? Will they ever be able to recapture consumer faith and trust? Will the Indian market be willing to forgive and forget? Would the company be able to regain consumer faith, change public perceptions and recapture mind space? If yes, how?

The case, set in 2015, studies the challenges Nestlé faced while grappling with consumer sensitivities following a ban on Maggi, its flagship product. The controversy over high levels of lead and MSG in Maggi created a crisis in the company, forcing it to recall and destroy large quantities of the product. The incident not only impacted the company’s sales but also led to the loss of consumers’ faith and trust. The case discusses Nestlé’s growth to become the undisputed leader in the Indian noodle market, the impact of the crisis and the steps Nestlé took to resolve the issue.