After Maggi Noodles Ban Nestle Plans ReadytoEat Snacks Options Report

first_imgTo overcome the uncertainty over its banned Maggi noodles, Nestle India is planning to come up with options, apparently to regain its lost share in the ready-to-eat snacks market. The company had estimated the loss arising out of the ban on Maggi noodles at about $45 million, apart from a substantial brand erosion pegged at $200 million (about ₹1,300 crore). “With no clarity over when Maggi in its existing form will be back on shelves, Nestle is working on alternate snacking options,” a source close to the development told The Economic Times.”Snacking is a huge opportunity which Nestle doesn’t want to vacate, and it already has an existing backend for the culinary business,” added the source.On 5 June, India’s food safety regulator Food Safety & Standards Authority of India (FSSAI) had ordered Nestle India to recall all the available stock of instant noodles in the market after it found higher levels of lead and harmful chemical monosodium glutamate (MSG) while testing samples.The company was forced to recall about  27,420 tonnes of Maggi noodles.Nestle India may roll out the alternative snack in “ready-to-eat” or “ready-to-cook food” form, which will require re-launching of Maggi in a “new format”.However, the product, which will replace Maggi noodles, will have to get necessary clearances from the authorities.”We are working hard to resolve the situation and we aim to be back in the market as soon as we can. Adhering to Nestle’s rigorous quality policies and testing protocol, we are confident that we will come back soon, ensuring food safety, as we always do,” a Nestle spokesperson said.The company has suspended its operations at its five plants in India but continuing its research on a “priority basis”.Sales of Maggi noodles account for 20 percent of the company’s overall revenues and analysts see a 50 percent decline in volume growth of Nestle India’s ready-to-eat food products in 2015 due to the ban. “Any health concerns raised by a credible source such as FSSAI will most certainly damage customer loyalty and consideration of a food brand,” said David Haigh, CEO of the London-based brand valuation consultancy Brand Finance.Nestle India has filed a case against the FSSAI ban in the Bombay High Court; the case has been posted for its next hearing on 30 June.last_img

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