If there is one food brand that probably unites the entire India, it has to be Maggi. The brand today is synonymous with Noodles and is loved by people across age groups and geographies
Let’s take a look at how Maggi became India’s favorite snack
A Century-Old Brand
In 1882, Julius Maggi came out with the recipe of Maggi Noodles mainly to cater to the working women, who had no time left to cook food during the Industrial Revolution. The idea was to create something healthy and instant and so instant noodles made the cut. It had great utility and proved to be of great convenience for the consumers
100 years after this, Maggi was brought to India by Nestle in 1982. Though Nestle had been operating in India since 1912 through imports from its western manufacturing units
Today, after 38 years in the country, it is a brand that is loved by everyone and is the market leader in instant noodles
Positioning as a Snacking Alternative
Maggi initially entered India to cater to Indian women who were entering the workforce slowly and found it difficult to cook meals at times because the traditional Indian dishes took time to cook. At that time, no other brand provided something called as instant food and hence Maggi had to carve a category by itself
Initially, Maggi advertisements featured Maggi Mom who wants to cook something quick and healthy. The sales picked up initially but began dropping soon after. Indians did not accept a quick food replacing their traditional dal chawal and roti and hence the company had to reposition itself
Now, if you want someone to try a new product, you cannot do so by replacing his/her age old habits and hence Maggi realized that instead of replacing the traditional Indian meals, it would be good to project Maggi Noodles as a snacking option. Also, there was no real product available in the market to fulfill this gap
The company was quick to realize that the product needs to be customized according to the Indian food and hence they introduced a “masala tastemaker” packet to give it a desi twist and add some great Indian spices
Connecting with the Target Group
Maggi changed their marketing strategy a bit in 1985 and launched a new advertisement in which kids saying, “Mummy, I am hungry” to their Mom and she then cooks instant noodles which kids seem to enjoy. This ad was a change from the earlier strategy of positioning Maggi as a convenience product only as now it focused on women through their kids
Also, during the eighties, Indians were still very much traditional in their food habits and it was a common belief that home cooked food is better compared to anything cooked outside. Maggi struck the right balance here as it was cooked inside the kitchen once you have the ingredients in place. The masala packet ensured you need not have any pre requisite before cooking Maggi
The above advertisement stuck a chord with the masses and they quickly started to believe that Maggi can be a great snacking option. The target group remained the same which were mothers but this time they were targeted through kids in an indirect manner
The complete advertisement can be viewed here https://www.youtube.com/watch?v=1Jdj5hcvGYE&feature=emb_logo
During those times, TV was the main media for advertising and reaching the masses however, many kids did not watch or have access to prime time TV ads and so Maggi decided to distribute their packs for free in schools and canteens. Also, they leveraged the distribution network and made Maggi available at all the nearby stores. These stores were also taught how to hang packs right in front to ensure it gets maximum attention. All these measures ensured that kids connected with the brand and so their mothers had little choice but to buy Maggi
This way Maggi became the household name in India
From Good to Great
In the 90s, Maggi had established itself as a prominent brand in India and its consumer base was growing rapidly. In 1997, the company tried to do some variation and hence changed the taste of noodles. But it failed miserably and old formulation was reintroduced in 1998. Since then, it has launched several new variants but the oldest and simplest variant is the one that sells the most even today.
Over time, Maggi has constantly innovated with its communication strategies and has stayed relevant to the people and it has also added young adults to its target group along with kids.
What’s common between students staying in hostels, young adults staying away from home, and school kids?
All of them love Maggi and have grown up with Maggi being an integral part of their cuisine. If you ask any bachelor about his 2 am cravings, Maggi is usually the answer
To mark the 25th year in India, Maggi launched the “Me and Meri Maggi” campaign in 2008 wherein they invited consumers to share their Maggi stories. Their advertising agency was flooded with more than 30 000 entries from even the remotest parts of the country a testament to the connection the brand has with its consumers
A lot of people earn their livelihood solely by selling Maggi. These so-called “Maggipreneurs” are present everywhere right from busy cities to your treks in the Himalayas
It is no surprise that the Economic Times once said, “If Xerox is for photocopies, Colgate is for toothpaste then, Maggi is for Noodles”
The Controversy
On 5th June 2015, Maggi faced a nationwide ban for six months because tests conducted by FSSAI showed it contained lead more than 1000x of what the company had claimed, and hence it was not safe for consumption.
Between June and September, Nestle recalled more than 38000 tonnes of Maggi Noodles, and these were then burnt at 11 cement incinerators across the country. Maggi had gone from 75% of the market to zero is less than 2 months
Then began the process of rebuilding the brand. CEO Suresh Narayanan briefed the Swiss leadership about what needed to be done. He focused on diversifying Nestle’s offerings in India and reducing the dependence on Maggi. It offered only 20 brands in India at that time from its global portfolio of 20000 brands. It has since then entered into the coffee machine segment and even kids nutrition with Ceregrow
In 2016, Nestle was ready to relaunch Maggi noodles after it received clearance from all the concerned authorities. Amitabh Bachchan was made the brand ambassador and advertisements showed the stories about Maggi that people had sent. Within a year, it captured back more than 50% of the market and today it is again the market leader
What do the Numbers Speak??
Currently, Maggi noodles command a market share of more than 60% in India which is somewhat less than 75% it had before the ban. This is followed by Sufeast Yippee noodles by ITC and then comes Top Ramen
Nestle India’s clocked an annual revenue of about INR 12000cr last year and Maggi as a brand contributed to about INR 3000cr and was the second biggest contributor after Milk and Nutrition Products. All this is a result of a focus on diversification post the 2015 crisis before which Maggi contributed to about 35% of the total revenue
The fact that it captured most of the market share it had lost in just a year after the crisis shows how well connected the brand is with the people
According to ET Brand Equity, Maggi is the 13th most trusted brand in India after the likes of Dairy Milk, Amul, Dettol, and Colgate
Refer to the link for more
https://brandequity.economictimes.indiatimes.com/news/industry/most-trusted-brands-2020/74800967
Not only Noodles
Though Maggi noodles are probably the most known product, Maggi as a brand has a whole host of products under its umbrella. It includes products like ketchup, Pasta, Masala tastemakers, soups, and coconut milk powder
Besides Maggi, Nestle India has some of the most iconic brands under its portfolio. These include KitKat and Munch in the confectionery space, Nescafe and Nestea under beverages, Ceregrow in Nutrition, Milkmaid and Koko crunch are some others
These products have been growing significantly over the past few years and even though India business contributes only 2-3% to the total business of Nestle, it is one of their most important markets. The company has been launching new products even during covid times and is also increasing its rural footprint. All these factors keep the investors positive on the long term business of the company and hence the stock currently trades at a P/E of 78
COVID – 19 and Maggi
The ongoing pandemic has led to an increase in demand for ready to eat/cook food and Maggi happens to be the ultimate comfort food that everyone loves. So Maggi has registered a strong growth of 25% in recent months due to increased in-house consumption.
Read more about how the pandemic is reshaping India’s FMCG industry here https://pinankr.wordpress.com/2020/09/06/how-covid-is-reshaping-indias-fmcg-industry/
Sensing that a lot of people have taken up cooking recently, Maggi has even come up with a new advertisement campaign “Aao Maggi Banaye”
In a country as diverse as India, Maggi is probably the only food that unites everyone
That’s all I have for today
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Mr. Inquisitive 