Maggi controversy affects ready to cook food industry in Q2

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The controversy that prevailed over Maggi noodles in the past few months has not only affected the ready to cook food industry but also affected the sales of the entire packaged food category. This is evident as the second quarter of this year that ended in June shows drastically reduced packed food purchase.

The sales of ready to cook products such as noodles, soups and oats have dropped by 9 percent in the second quarter of 2015. In the same period last year, the category witnessed a growth of 5 percent. These details were revealed by IMRB Kantar Worldpanel that studies the consumption patterns via volume sales.

As per the study, the beverages dropped by 4 percent and the overall food segment witnessed a growth of only 4 percent from 9 percent in the last year.

It was in the first week of June that the noodles brand Maggi was recalled from the retail shops. This development came into effect after the country’s food regulator stated that the brand contained harmful elements. To be specific, Maggi contained a flavor enhancer – monosodium glutamate and higher levels of lead than the permitted limit. After appealing to the court, Nestle has been ordered to get the fresh samples tested and then proceed with the sales if they are safe.

As per the experts, the Maggi controversy has affected the food segment at the time when the consumers are cutting off the discretionary expenditure. The retardation in the food segment growth was due to many factors, and the Maggi case worsened the condition.

With the sudden downfall of the Maggi noodles, the local as well as global food companies have hired confidential advisories in their organizations. They are also urging their executives to ensure that the packaging, ingredients, labeling, seasoning, and product testing meet the regulatory standards.

These companies are investing highly in the market, and they put all their efforts to protect their brand image. They are subjected to attack anytime by the activists, consumer groups and regulators.

 

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