A year later, 99.9% ‘Indian brand Maggi ‘ wins 60% of market share

 

Unfazed by yoga guru Ramdev-led Patanjali’s anti-MNC campaign, Nestle India on Tuesday said its commitment to India will be “unwavering” with a history of over 104 years of presence in the country and described itself as “99.9 per cent” Indian.

“We have been in India for 104 years, 99.9 per cent of my company is Indian starting with me… I am proud of this heritage that we have in this country and proud of what the company has done in this country,” Nestle India Chairman and Managing Director Suresh Narayanan told PTI.

Stating that the company’s consumers, suppliers, vendors, partners and shareholders are all Indians, he said: “My contribution to taxes and salaries are all to Indians and therefore I am at a loss to understand as what else must I be doing to be called as Indian.”

He was responding to a query on how the company views allegations by Patanjali through various advertisements that just like the way “East India Company enslaved and looted us, multinational companies are still doing the same by selling soap, shampoo, toothpaste, cream, powder and similar daily items at exorbitant price”.

Narayanan further said: “So, while the statements are read also by my board both India and globally in Switzerland, we do not change our views simply because of the rhetoric.”

Choosing not to get into a slanging match, he said: “Irrespective of what people might say, they have their points of view, I respect their point of view. Nestle’s purpose and value will be unwavering and its commitment to this country would also be unwavering.”

Reiterating that the “bond and relationship” with India built over the course of a century “are rock-solid”, he said, “The dignity and respect that we command as an entity is something we are grateful for and we would always be grateful”.

Citing the example of the Maggi crisis, Narayanan said that not even once during the entire crisis, the company had a single incident of unrest.

Even though Nestle India shut down five factories for five months due to the ban on Maggi, it did not have a single problem at any of the plants, he added.

“No distributor left us or supplier left us and no shareholder betrayed us and that tells you that they are happy dealing with us as a company and they are happy with the trust and relationship that we have established these years,” Narayanan said further.

“If all these remain with me and I do not change my behaviour, then why should I be worried what people might say or think about my antecedents.”

On whether Nestle India will foray into ayurvedic FMCG products, which is fast becoming popular, he replied in the negative.

“The difference for Nestle is Nestle looks for nutrition and does not look at the origin or the source of the nutrition. This is a company involved in science, technology and R&D in nutrition,” he explained.

According to Narayanan, image, left, Nestle India’s aim is to make efficacious products and it does extensive trials to ensure the items are sustainable and stable and give the right kind of nutrition as far as consumers are concerned.

“I do not see our strategy changing from a primacy of nutrition, science, technology and wellness to a primacy which needs to say that something from this stream of medicine simply because it’s nice one to use. That as a company, we do not have that philosophy,” Narayanan clarified.

 

A year after Maggi made a comeback following a ban of over five months, Nestle India is looking to consolidate its leadership position in the noodles segment, and re-grow the overall category that has shrunk due to trust issues with consumers over food safety.

Besides, the company, which launched 25 to 30 new products across categories in the last three months, is working to grow the categories in its pursuit.

“The (Maggi) brand was clinically dead in June 2015 when the crisis happened but at the same time, I am happy to say that today, it is knocking at 60 per cent market share and we are back to leadership,” Narayanan said.

Maggi was banned by the FSSAI in June 2015 citing the presence of lead beyond permissible limits and labelling regulations on taste enhancer ‘MSG’. At the time, Nestle India withdrew the product from the market.

Before the ban, Maggi commanded a market share of around 75 per cent. Following legal battles, the popular noodles brand was back in the market in November last year.

“We are not yet back to where we were but we still have a journey to traverse but we are back strongly to leadership,” Narayanan said.

According to estimates, in 2015, the overall noodles segment in India was valued at around Rs 2,300 crore.

“This is about 20-30 per cent less than what it should have been…because of the unfortunate seed of doubt that was planted on Maggi, two things happened — one was that level of trust in noodles itself became a suspect because we were the market leader by far,” he said.

“To a certain extent, the category was shrunk because the market leader was not there and the category came into question,” he added.

Some of the other categories in snacking such as biscuits and chips have been beneficiaries from the Maggi episode, he felt.

When asked by when Nestle India expects Maggi to achieve pre-ban market share, he said: “It is difficult to put a time.”

With the whole episode behind, Nestle India is now looking ahead with renewed vigour and focus on nutrition while expanding in other categories in oder to be counted among the best FMCG firm in India.

“We have in the last three months launched 25-30 new products across categories, not just in Maggi but in coffee, chocolates and confectionery, milk and nutrition, in all our portfolio. This is the single largest window of the new product launches that Nestle India has undertaken in its 104 years of history in the country,” he said.

Narayanan further said: “This came directly out of that desire to do what we do best as a company. To offer quality, safe products and nutritious products across variety of categories we operate in.”

When asked if the company planned to continue with the slew of product launches, he said: “The challenge for Nestle, which operates over 2,000 brands globally, is not what to launch but when to launch. The mandate that I have taken for myself and for my team, is to keep continuing the engine of innovation and renovation in fast changing India.”

For the next two quarters, the company will assess the performance of the new products and see which ones are to be continued and which needed a re-look, he said.

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