The world’s largest food and beverage company, Nestlé, came under fire after an internal presentation revealed that much of its mainstream food and beverage portfolio is unhealthy.
In the internal document, the company said that 60 percent of its food and beverage portfolio – with the exception of categories like pet food, baby food and coffee – do not meet the accepted definition of health. It also acknowledged that some of its foods “will never be healthy”.
Reading | Nestle’s “Unhealthy” Food Portfolio Controversy: All You Need to Know
The main reason for criticism this time around revolves around how healthy the company’s mainstream products are. The company is now in Damage control mode.
This controversy, however, is nowhere near the crisis of Nestlé Indias Maggi Noodles over six years ago.
THE MAGGI NOODLE CRISIS IN INDIA
The Crisis with Maggi Noodles in India was so bad that several Case studies were made about it. It almost threatened the existence of Nestlé India as the sale of Maggi contributed to over 25 percent of the sales of the Swiss company’s India unit.
It was in 2014 when food safety regulators from the Barabanki district in Uttar Pradesh reported that samples of Maggi noodles had high levels of monosodium glutamate (MSG) in addition to high levels of lead above the allowable level. At the time, the labeling on the packages of Maggi Noodles indicated that no MSG was added.
A livemint.com Report from 2017 told that a person named Sanjay Singh, food inspector for the Uttar Pradesh government’s Food Safety and Drug Administration, discovered the label on the light yellow Maggi box that read “no MSG added” during one of his routine raids on retail stores in March 2014.
When it was sent to a government laboratory in Gorakhpur for testing, it was found that the instant noodle packets contained MSG. The samples were then sent to the Central Food Laboratory (CFL) in Kolkata a few months later.
Almost a year later, in April 2015, the CFL confirmed the Gorakhpur laboratory report and also confirmed that the amount of lead found was over 1,000 times that of Nestle India Ltd.
However, Nestlé claimed in its first official statement after the report that there was no order to remind yourself that Maggi pasta was being sold and that it was safe to eat. However, the controversy grew when the Food Safety and Standards Authority of India (FSSAI) asked Nestle to recall Maggi Noodles.
Nestlé had no choice but to remember the popular snack from the market. Between June 5 and September 1, 2015, nearly 38,000 tons of Maggi noodles were recalled and destroyed from retail stores across the country. Maggi’s share of the Indian market fell from 80 percent to zero.
Also read | Maggi range: Nestle India decides to take noodles off the shelves
Five months after the brand was forced to withdraw from the market due to safety concerns, Nestle India’s Maggi noodles returned to shelves in November 2015. However, in some states, local bans continued even after Maggi returned to the markets. It took Maggi almost another year to return to every state in the country.
Nestle India, Chairman & MD, Suresh Narayanan, in a 2017 interview with BusinessToday.in said how the Maggi Noodles crisis was most challenging and dramatic situation in his entire professional career.
“Maggi is the worst crisis we have experienced in this country in the 104 years of our existence, and the worst crisis the company has experienced in a long time,” he said at the time.
NEW CONCERN PROBABLY AFFECTING INDIA UNIT
The new ‘unhealthy’ food and beverage controversy is unlikely to affect Nestlé India as its portfolio is different from Nestlé India. It should be noted that India is one of the few countries where Nestlé has a long-standing local research and development facility.
Abneesh Roy, Executive Director (Institutional Equities), Edelweiss Securities, said BusinessToday.in that Nestlé India only has nine brands out of the parent company’s 35 billionaire brands. Roy also said he doesn’t expect the global dispute to significantly affect Nestlé India’s business.
One of the reasons for this is that over 45 percent of Nestle India’s products include health and nutritional products such as baby food, dairy products and coffee that are not classified as “unhealthy” in the internal document.
Other prominent products in Nestle India’s portfolio include Maggi Noodles and Chocolates – both of which can be difficult to renovate if they don’t meet healthy criteria. Even then, the “unhealthy” food portfolio is unlikely to affect sales of Nestle India’s products.
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