The story
Being a strong proponent of its creating shared value (CSV) policy and strong believer in its quality, Nestlé often comes off as very arrogant. Nestlé’s employees and managers are very loyal to the brand because they see that the company does its best to help the community. Yet, Nestlé often forgets that simply because the internal community understands, doesn’t imply that the external community will as well. Nestlé sticks firmly to its values and beliefs, which can sometimes, ironically, negatively impact the company’s reputation. One such instant was during the Maggi crisis in India in 2014 and 2015.
Nestlé claims that it is the “world’s leading nutrition, health, and wellness company”. Employees and managers believe this strongly and take any attack on the company as a personal attack. This pride, however, has caused them to damage their reputation in India, and across the world for that matter. In March 2014, a food inspector was intrigued by Maggi’s claim that they don’t add MSG to their noodles. He sent it to a lab to get tested. When it came back, the results were positive for MSG. The simplest resolution was for Nestlé to pay a fine for not properly labeling its product. Nestlé managers, though, were absolutely certain that they do not use MSG. So, instead of paying the fine, Nestlé decided to work out the misunderstanding with the food officials. The food inspector sent another batch of Maggi noodles to get tested at the other end of the state. Those samples oddly took a full year to get tested, supposedly because the samples got placed at the bottom of a pile and then the results letter got lost. During this second inspection, it was found that, in addition to MSG, Maggi noodles have a very elevated concentration of led and are thus “unsafe and hazardous for human consumption.”
The company’s response
Because of its pride, Nestlé continued to insist that there was nothing wrong with it’s noodles. Nonetheless, the company decided to perform a voluntary recall of the millions of units of Maggi noodles across the country. Nestlé destroyed all of the Maggi noodles that it recalled as it would have been too expensive to store or move them. This act, though, was perceived by the public as the company trying to cover its tracks. That was it’s first mistake. In the summer of 2015, it sued the Food Safety and Standards Authority of India (FSSAI) for false claims. It wanted to maintain the trust of its consumers by showing them that they believe they are right. Ironically, the more the company tried to defend its reputation, the more it seemed like the bully on the playground.
The controversy
By June 2015, Australia, Canada, the US and the UK had also tested their noodles and found them to be safe. This is not the first time that India had found questionable ingredients in the products of food giants. In 1977, Coca-Cola left the market because India required it to share its secret formula. Upon its return a couple years later, India found pesticides in the drink. It also found pesticides in Pepsi. The two multinationals fought the claims and later struggled from a hurt reputation in the country. In 2013, Cadbury chocolates were said to have worms in them. Cadbury, like Nestlé, claimed that their production of the chocolate was completely safe. They insisted that it was the improper storage of the candy that caused that. Regardless of who was to blame, what Cadbury did differently was that it talked with the public instead of at the public. It set up a media organization to help retailers and households know how to store the chocolate properly. It also implemented a purity packaging just in case, which showed consumers that Cadbury was acting in their best interests.
In the end
Nestlé reacted to the FSSAI’s claims in the same manner as Coca-Cola and Pepsi. It turns out that Coca-Cola and Pepsi do contain pesticides that are not harmful to humans but wanted to avoid the stigma. Similarly, Maggi’s noodles do contain MSG but Nestlé does not add any additional MSG to the product. If Nestlé had paid the fine at the beginning for wrongful labeling, it might not have spiraled out of control and done so much damage to the trustworthiness of the brand. When it comes to the led found in Maggi, many believe that it was due to testing error as the state labs are very out-dated. Yet, you should never go into someone’s home criticizing their silverware. Instead, Nestlé should have responded faster to the media. Throughout the entire debate, Nestlé was being criticized for taking too much time to respond to updates in the situation. Moreover, they should have engaged consumers instead of talking at them. Nestlé should have focused on their dedication to CSV and the fact that they seek to make profit by improving the community, not sickening it. As we have seen in the recent US elections, it’s not about being right or winning the battles. To win the war, you have to have charisma and engage your audience. Make them believe in you for what you believe. That’s how they’ll trust you and that’s how they’ll support you. As Simon Sinek said, “People don’t buy what you do. They buy why you do it.”