Introduction:

Fast-Moving Consumer Goods (FMCG) companies are known for their rapid production and
distribution of consumer products. Nestle, one of the largest FMCG companies in the world, has
a history of producing a wide range of food and beverage products. Nestle launched its Maggi
instant noodles in India in 1982. In 2015, Nestle found itself at the center of a controversy when
its popular Maggi instant noodles were found to contain high levels of lead.
Synopsis:
Maggi is a popular instant noodle brand owned by Nestle, a multinational food and beverage
company. Himanshu Sharma is an Area Sales Manager for the company, responsible for
overseeing sales operations in a particular region. The company has faced challenges related to
its product quality and supply chain. One of the main issues that Himanshu has been dealing with
is the presence of lead in the active ingredients used to manufacture Maggi noodles. This issue
was brought to light by a government agency, which found that some samples of the product
contained high levels of lead. This led to a nationwide recall of Maggi noodles. The company has
also faced production issues that have affected its supply chain leading to shortage of maggi
noodles in the market.
The case study explores the events that led to the controversy, the impact on the company, and
the management decision-making process that followed. The case study also analyzes the
research methods used to test the product, and the key learnings from the incident.
The Nestle noodles lead issue is a case study in the subfield of business ethics, it highlights the
ethical responsibilities of corporations towards consumers and society at large.
Teaching Objective:
The case study of Nestle and the lead issue with its instant noodle brand Maggi provides an
opportunity to explore the importance of product safety and quality control in the FMCG
industry. The teaching objective of this case study is to help students understand the importance
of product safety and the impact it can have on a company's reputation and financial
performance. Additionally, the case study aims to demonstrate how management decision-
making can affect a company's response to a crisis.
The case study provides the following teaching objectives to discuss the following topics:

 The importance of regulators in ensuring food safety and quality control in the FMCG
industry.
 The importance of supply chain management and product traceability
 The need for crisis communication and reputation management in the FMCG industry
 The impact of product recalls and crises on brand reputation and market share

Research Method:
The research method used in this case study involves a review of public information on the
Maggi noodles controversy, including news articles, primary information gained through contact
with industry experts, blogs and research papers.
Keywords:
Nestle, Maggi noodles, lead issue, product safety, FMCG, management decision-making, crisis
management.
Assignment Questions:
1. What steps did Nestle take to address the Nestle noodles lead issue?
2. What is Nestle doing to prevent similar issues in the future?
3. Has Nestle regained consumer trust after the Nestle noodles lead issue?
4. What can other companies learn from Nestle's response to the noodle lead controversy?

Additional Materials:
 https://www.youtube.com/watch?v=K10aHT1ARnw
 https://www.youtube.com/watch?v=lAvAhUA1PyA
 https://recipes.timesofindia.com/articles/features/maggi-has-poisonous-lead-in-it-
admits-nestl-after-sc-ruling/photostory/67381858.cms?picid=67381876
 https://www.linkedin.com/pulse/pr-crisis-management-lessons-from-nestl%C3%A9-
maggi-noodle-comcowich/
 https://www.reuters.com/article/nestle-india-maggi-idUKL3N13B4TY20151116

Suggested Core Readings:

 Arora, E. (2015). Social Media and Maggi Crisis: A Case Study. AMITY JOURNAL OF MEDIA
AND COMMUNICATION STUDIES, 227.
 Rajain, P., Rathee, R., & Batra, E. Maggi Noodles: Ban and Revival.
 Sardar, D. R. (2018). Maggi stews in lead and MSG pot: Controversy over India’s favourite
instant Noodles. Case Studies Journal ISSN (2305-509X)–Volume, 4.
 Shaikh, J., & Parikh, J. (2020). The Maggi noodles ban: Perceived quality, emotional trust and
customer loyalty during and post controversy. IUP Journal of Brand Management, 17(4), 7-40.
 Srivastava, R. K. (2019). Rebuilding a global brand under crisis–case of a global brand
Maggi. International Journal of Pharmaceutical and Healthcare Marketing.

Teaching Plan and Timings:

Nestle's Maggi noodles were one of the most popular instant noodle brands in India until a major
controversy erupted in 2015, when the Food Safety and Standards Authority of India (FSSAI)
declared that samples of Maggi noodles contained high levels of lead and monosodium
glutamate (MSG) beyond permissible limits. This led to a nationwide recall of Maggi noodles,
and Nestle was subsequently sued for damages.
The case study of Nestle's Maggi noodles is an excellent teaching tool for several reasons.
Firstly, it highlights the importance of food safety and regulatory compliance, especially in
emerging markets where food safety standards are still evolving. Secondly, it demonstrates the
power of social media in shaping public opinion and influencing corporate behavior. Finally, it
showcases the challenges faced by multinational corporations when operating in different
cultural contexts.
To teach this case study effectively, a 90 minutes session could be planned as follows:

 Introduction and Background (15 minutes): The instructor can begin by introducing
the case study and providing some background on Nestle's Maggi noodles, its popularity
in India, and the events that led to the controversy.
 Relevant video (10 minutes): The instructor can show relevant videos related to case
study to the class for the better understanding and clarity of the topics. The videos can be
taken from You Tube or any other source.
 Case Analysis (35 minutes): Next, the instructor can divide the class into small groups
and provide each group with a set of questions to analyze the case. The questions could
cover areas such as food safety regulations in India, Nestle's response to the crisis, the
role of social media in the controversy, and the impact on Nestle's brand reputation.
 Group Presentations (15 minutes): Each group can present its findings to the rest of the
class, and the instructor can facilitate a discussion on the different perspectives and
insights that emerged from the case analysis.
 Wrap-Up/conclusion (15 minutes): In the final 15 minutes, the instructor can
summarize the key takeaways from the case study and invite students to share their
reflections and opinions. The session can end with a brief quiz or poll to gauge students'
understanding and engagement.
In terms of timing, this session could be scheduled towards the end of a semester-long course
on international business or corporate social responsibility. This would allow students to
draw on the knowledge and concepts they have learned throughout the course and apply them
to a real-world case study. Alternatively, the case study could be used as a standalone module
in a shorter course or workshop on business ethics or cross-cultural management.
In conclusion, Nestle's Maggi noodles case study offers valuable lessons for students and
practitioners alike. By analyzing the case and discussing its implications, students can
develop a deeper understanding of the complexities and challenges of operating in a
globalized economy, as well as the importance of responsible corporate behavior.

Analysis of Assignment Questions:

1. Nestle India initially denied the allegations and claimed that their products were safe for
consumption. However, they later issued a nationwide recall of all Maggi noodles
products and suspended production and sales of the product until further notice. Nestle
India also announced that they would be destroying over 38,550 tonnes of Maggi
noodles, which comes to approx. 54 cr. of Maggi packets. Moreover the company also
has spent 30cr. for destroying the packets. Nestle took several steps to address the Nestle
noodles lead issue, such as recalling all Maggi noodles from the market, conducting
rigorous testing of its products, and implementing strict quality control measures in its
manufacturing processes. The company also launched a comprehensive communication
campaign to address consumer concerns and rebuild trust.
https://www.indiatoday.in/mail-today/story/nestle-maggi-lead-msg-presence-342693-
2016-09-23

2. Nestle has implemented several measures to prevent similar issues in the future, such as
strengthening its quality control processes, increasing transparency in its supply chain,
and improving its communication with regulators and consumers. The company has also
established a Food Safety Institute to provide training and resources to its employees and
suppliers. Nestle has taken steps to address the issue and prevent similar incidents in the
future. The company has implemented new quality control measures, including increased
testing and improved supply chain management. Nestle has also increased transparency
and communication with customers, regularly sharing information about its quality
control processes and addressing any concerns that arise.
Additionally, Nestle has made commitments to sustainability and responsible business
practices. The company has set goals to reduce its environmental impact and ensure
ethical sourcing of its ingredients. Nestle has also pledged to improve the nutritional
profile of its products and promote healthy eating habits.

3. Nestle has taken significant steps to regain consumer trust after the Nestle noodles lead
issue, such as launching new product lines and implementing strict quality control
measures. While it may take time for Nestle to fully regain consumer trust, the company
has made significant progress in rebuilding its reputation in India and other markets.
Nestle India launched a massive media campaign to address the issue and reassure
customers about the safety of its products. The company also released a detailed
statement on their website, outlining the steps they were taking to resolve the issue.
Nestle India also appointed a new CEO, Suresh Narayanan, who took immediate steps to
address the issue and improve the company's image. The company has invested in new
equipment and processes to improve the quality and safety of its products, and has also
worked on strengthening its supply chain to ensure a consistent and reliable flow of
products to the market. Overall, the company has faced significant challenges in recent
times.
 4. The incident was a significant challenge for Nestle, but the company's response provides
valuable lessons for other companies facing similar crises.
Firstly, Nestle took swift action by recalling the product from the market, cooperating
with authorities, and conducting internal investigations to identify the source of the
problem. Secondly, the company communicated transparently with its stakeholders,
including consumers, regulators, and investors, about the situation, the actions being
taken, and the progress made.
Nestle also demonstrated its commitment to quality and safety by implementing new and
improved processes for product testing and quality control, which helped regain the trust
of its customers and regulators. Additionally, the company engaged with stakeholders to
understand their concerns and feedback, and used it to inform its decision-making and
response strategy.
Finally, Nestle recognized the importance of building and maintaining strong
relationships with stakeholders by actively engaging with them through regular
communication and collaboration.
In conclusion, the Nestle noodle lead controversy provides valuable insights into
effective crisis management, which includes swift action, transparent communication, a
focus on quality and safety, stakeholder engagement, and relationship building. Other
companies can learn from Nestle's response and apply these principles to their crisis
management strategy.

Key Learnings:
The Maggi noodles controversy highlights the importance of product safety and crisis
management in the FMCG industry. Companies must prioritize product safety and have a well-
defined plan to address potential issues. Additionally, management decision-making can have a
significant impact on a company's response to a crisis, and it is essential to have experienced and
competent leaders in place.
The key learnings from this case study are as follows:

 The importance of product safety cannot be overstated, and companies must prioritize it
in their operations.
 Crisis management is critical in times of controversy, and companies must have a well-
defined plan to address potential issues.
 Transparency and open communication are essential in crisis management, as they help
build trust and credibility with stakeholders.
 Management decision-making can have a significant impact on a company's response to a
crisis, and it is essential to have experienced and competent leaders in place.
Management Decision Making:
Nestle's management decision-making in response to the Maggi noodles controversy was swift
and decisive. The company conducted its internal tests, which showed that the product was safe,
and communicated this to the public. However, the government's ban on the product caught the
company off guard, and it struggled to respond to the situation effectively.
Nestle's initial response was to challenge the ban and maintain the safety of its product.
However, as the controversy grew, the company took a different approach and decided to recall
all Maggi noodles from the market. This was a significant management decision as it involved
not only financial costs but also reputational risks for the company.
Nestle also initiated an extensive testing and quality control process to ensure that all its products
met safety standards. The company worked closely with regulators to demonstrate its
commitment to food safety and regain consumer trust.
The controversy highlighted the importance of effective crisis management and the need for
companies to take swift action to address any potential safety issues. Nestle's decision to recall
the product and work towards ensuring the safety of its products helped to rebuild its reputation
and regain the trust of consumers.
Nestle faced criticism from consumers and stakeholders for its handling of the crisis, with many
accusing the company of being slow to respond and lacking transparency. The company
eventually agreed to recall the product, which led to significant financial losses.
Postscript:
Since the Maggi noodles controversy, Nestle has made significant changes to its operations to
prioritize product safety. The company has invested in quality testing and increased transparency
in its operations. Additionally, the company has focused on innovation to develop healthier and
more sustainable products.
Nestle denied the allegations and challenged the ban in court, claiming that its products were safe
and complied with all regulations. The company conducted its own tests and maintained that the
lead content was within the permissible limits in all samples. However, the FSSAI refused to lift
the ban, citing concerns over the safety of the product.
The case went through multiple legal battles, with Nestle challenging the ban in various courts
and seeking relief. In November 2015, the Bombay High Court lifted the ban on Maggi noodles,
stating that the FSSAI had failed to follow due process in testing the product. The court ordered
fresh tests to be conducted and allowed Nestle to resume production and sale of Maggi noodles,
subject to the results of the new tests.
Subsequently, Nestle conducted over 3,500 tests on samples of Maggi noodles, both in India and
abroad, and all tests confirmed that the lead levels were within the permissible limits. In 2016,
the FSSAI accepted the test results and lifted the ban on Maggi noodles, allowing Nestle to
resume its production and sale in India.
Overall, the Maggi noodles controversy was a challenging time for Nestle, but the company has
emerged stronger and more resilient as a result.

Exhibit TN: Suggested Board Plan

The instructor can divide the 90 minute session into the above mentioned activities in Teaching
Plan and Timing section of the case study.

Topic Time
Introduction and Background 15 minutes
Relevant Video 10 Minutes
Case Analysis 35 minutes
Group Presentation 15 minutes
Conclusion 15 minutes

The content of the discussion can cover topics such as corporate responsibility, ethical decision-
making, product safety, and consumer protection. Students can also examine the role of
government regulations and industry standards in ensuring the safety of food products. Through
this case study, students can develop critical thinking skills and an understanding of the
importance of ethical practices in the corporate world.