Maggi noodles

Nestlé’s half-billion-dollar noodle debacle in India

Nestlé spent three decades building a beloved noodle brand in India. Then the world’s biggest food and beverage company stumbled into a public relations debacle that cost it half a billion dollars. Herewith a cautionary tale of mangled crisis management on an epic scale.

Nestlé spent three decades building a beloved noodle brand in India. Then the world’s biggest food and beverage company stumbled into a public relations debacle that cost it half a billion dollars. Herewith a cautionary tale of mangled crisis management on an epic scale.

It was the middle of the night when the jangle of his cellphone woke Sanjay Khajuria from a deep sleep. In the few seconds it took him to get his bearings—to remember he was in a Manhattan hotel room and not at home in his bed in Delhi—the Nestlé executive had an unsettling thought: Could this be about Maggi?

Khajuria is not accustomed to receiving urgent, late-night phone calls. As head of corporate affairs for Nestlé India, he typically divides his time between handling routine regulatory issues and trumpeting the company’s achievements in “creating shared value”—the approach to corporate social responsibility that Nestlé espouses.

In fact, Khajuria, 51, was in New York to represent his company in a shared value leadership summit, for which Nestlé was a sponsor.

Virtually everything in his world had appeared to be in order when he boarded his flight to New York. There was just one pesky issue to clear up.

Health officials in one of India’s 29 states had raised questions after testing a sample of one of Nestlé India’s bestselling products: Maggi 2-Minute Noodles.

Nestlé, the world’s largest food and beverage company, has sold Maggi (pronounced “MAG-ee”) in India for more than 30 years, and the brand’s ubiquity and cultural resonance on the subcontinent is something akin to Coca-Cola’s in the US.

In 2014, Indians consumed more than 400 000 tons of the instant noodles — marketed in 10 varieties, from Thrillin’ Curry to Cuppa Mania Masala Yo! — and Maggi accounted for roughly a quarter of the company’s $1.6-bn in revenue in the country.

That year Maggi was named one of India’s five most trusted brands.

Khajuria’s team had received the regulatory notice about Maggi 10 days earlier.

The food-safety commissioner of Uttar Pradesh, India’s most populous state with 205 million people, was claiming that a package of the noodles had been found to contain seven times the permissible level of lead and had recalled the batch.

Nestlé India had quickly responded with test results of its own showing that its noodles were absolutely safe. Khajuria expected that officials would find his company’s response compelling and that the issue would soon be resolved.

But why was someone trying to reach him at such a late hour?

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