Case Analysis

Of

Maggi: Nestls Hot mess

Group 10 (Section B)
Akshay Purohit (7B)
Anima Nivasarkar (8B)
Himani Singh (22B)
Mayank Tewari (29B)
Nidhi Jindal (32B)
Ruchir Sahai (39B )
Brief Summary of the case

At the centre of this case lies the Maggis packaging which has distinctly written on it: No
added MSG (Mono Sodium Glutamate), an ingredient which requires warning label on the
pack, stating it isnt safe for children under 12 months.

On 10th March, 2014, at Barabanki, Uttar Pradesh, a food inspector under his regular
inspection raids, took 4 Maggi packs as samples for verifying the claims written on the pack.
When the results came back in later that month, the results were alarming- it contained MSG.
This meant branding violation by Nestle and could have resulted in a fine of INR 300,000 or
$4500. Had Nestle paid it then and there, the story would have ended. But what ensued was a
scandal which resulted in Nestle losing more than half-a-billion overall.

Nestle denied the claims of the report, appealed the findings, and a new sample was sent to
Kolkata labs. What followed was classic (and questionable) government red-tapism- the
sample reached the Lab after getting lost in the mail and taking a detour of 1200 miles via
Shimla; then the report resting on the bottom of pile- the report finally came back to the food
inspectors office a year later in April 2015.

The results were even more shocking- not only MSG, it also contained lead at a level 1000
times over what company claimed. The report was mailed to Nestle, Nestle were not very
proactive in their response and they tried dealing directly with the authorities than via media
(which has been their strategy worldwide).

The questions at the end of the case are as follows:

1. What went wrong with Maggi?

2. Was there really something wrong with Maggi?
3. How should have Nestl responded keeping consumer sentiment in mind?
4. How did the consumers react to this situation?
5. How will Maggi make a comeback and win the trust of the consumers?
What went wrong with Maggi

In retrospect, Nestle had a very dismissive attitude towards the reports by Indian food
regulators.

Because of Nestls inherent confidence in its own processes and data, it couldnt imagine
that it might have a problem on its hands. This kind of attitude of polite superiority would
irritate officials and exacerbate Nestls problems, especially when the Indian press got wind
of the story.