Nestlé’s Maggie loses market share

Rivals benefit as Maggi market share declines sharply following 5 months’ ban

India: Maggi Noodles has lost almost 35% of its market share in India, following 5 months’ ban by Food Safety & Standards Authority of India (FSSAI). However, Maggie managed to retain its number one spot in noodles with 42% market share but the ban has allowed it nearest rival ITC Foods’ Sunfeast Yippee to get close to Maggie with strong share of 33%.

The share of Maggie noodles brand in the country dropped to 42% in January from a high of 77% in January 2015. Maggie was banned last year in June and returned to stores early November after 5 months’ ban over allegations by food regulator FSSAI over excessive lead in its products and mislabeling of flavor enhancer. The ban and recall cost almost 66 million USD to the company.

Before the Indian court ruling in the favor of Nestle in August last year, the noodles category was dominated by Maggie until May last year, has now started to become fragmented with players like Nissin’s Top Ramen, Patanjali noodles, Ching’s secret etc. who have intensified the marketing and sales promotion activities to keep their growth stable in the country.

According to TechSci Research- market research & consulting firm, the controversy has cost a significant sum of money to Nestle and has damaged its brand reputation among Indian consumers. This has also allowed other players to get a stronghold in the market in the absence of Maggie from shelves, who were not performing well with Maggie’s presence. It might take Nestle years to get the same brand image that it enjoyed earlier and it may have to spend huge money to achieve the pre-ban sales figure and market share.