Maggi was one of Nestlé’s oldest and largest global brands. It originated in 1863 when Julius Maggi, a Swiss industrialist looking to improve the nutrition of the nation’s workforce, developed condensed pea and bean soups. Maggi’s seasonings, soups, and noodles were sold in 101 countries. Nestlé introduced Maggi in India in 1983. Marketed to time-pressed mothers—“Mummy, I’m hungry.” “Two-minutes” went the product’s popular jingle. The concept of ‘2-minute noodles’, positioned as a quick snack option for children found ready acceptance among consumers. By 2015, the product was a big revenue generator for Nestlé India, contributing around 22-25 per cent to Nestlé’s top line and around 30 per cent to the company's profitability....

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THE MAGGI MUDDLE

On June 5, 2015, FSSAI placed a ban on the production and sale of Maggi noodles. The company had to recall products worth Rs 3.2 billion and destroy a whopping 30,000 tonnes of noodles. The controversy started around May 16, 2015, when the Lucknow Food Safety and Drug Administration found excess lead and MSG in the noodles. As per the FSDA officials, the lab test reported that Maggi contained 17.2 parts per million (ppm) lead, whereas the acceptable limit ranged from 0.01ppm to 2.5ppm..

CRISIS IMPACT

According to the global valuation consultancy, Brand Finance, the Maggi brand was valued at US$2.4 billion before the ban.The consultancy calculated the US$50million loss of goods combined with a damaged brand resulted in a reduced Maggi brand value of US$2.2 billion. The Maggi issue dragged down the financials of the company in 2015. ..

EXHIBITS

Exhibit I:Nestlé India Limited Statement of Profit and Loss for the Year Ended on December 31.
Exhibit II: Nestlé India Limited Balance Sheet as at December 31.
Exhibit III: Nestlé India Limited Cash Flow Statement for the Year Ended on December 31