Crisis is good time to make changes in company: Nestle India CMD on lessons from Maggi fiasco
Narayanan, who will retire at the end of this month after leading Nestle India for a decade and turning the company around from an existential crisis to a thriving business, in an interview with PTI said when there is "any movement in the environment, a company should be on top of it in terms of gauging how impactful it is going to be".
The company's popular instant noodles Maggi was banned by the food regulator FSSAI in June 2015 for allegedly containing lead beyond permissible limits, forcing the company to withdraw the product from the market.
Narayanan who was then serving as Chairman and CEO of Nestlé Philippines, was immediately moved to India by the Swiss food multinational to handle the crisis. He joined Nestle India on August 1, 2015, as Managing Director, and Maggi was relaunched in November 2015, five months after the ban was lifted.
When asked about what lessons were learnt from the Maggi crisis, he said, "Crisis is a very good time to make change. You can jettison all the things that are not serving the purpose of adding value to the consumer and put in things that add value to the consumer."
Remembering his experience during the Maggi crisis, he said his first 100 days had been one of the greatest challenges of his career.
"I came into Nestle at a very troubled time. It was probably the existential crisis that was happening. It was one of those situations where Maggi was at the centre of all the news in the business world of India," he noted.
Recollecting the experience, Narayanan said, "A crisis of this kind is more than technical facts. It is perspectives and perceptions that matter. Our initial response was more on facts, whereas we underestimated that Maggi as a brand was so much more impactful with the consumers."
Therefore, he said, "When we started the conversation, not only with the environment, but also with the media, we brought to bear the power of the brand and what we stood for as a company that is of the highest food quality and safety."
Second one, Narayanan said, "I think we learned a lesson that any movement in the environment, a company should be on top of it in terms of gauging how impactful it is going to be."
According to him, it was the trust of brand Maggi and the collective strength of its employees, partners, distributors, suppliers and consumers that helped the company bounce back with a renewed vigour.
"We accepted the dictum that failing to succeed will help us to succeed," said Narayanan, often called the "crisis manager" of Nestle who steered Nestle from crises in several other markets such as Egypt and Singapore besides the Maggi incident in India.
After the Maggi crisis, Nestle India quickened the pace of innovations, added Narayanan who is hanging his boots on Thursday after having a 26-year-long stint with the Swiss multinational Nestle.
Elaborating further, he said, "We were an innovative company, but rather slow in innovation. So today we innovated about four times the rate of what we were doing pre-crisis. We have introduced almost 150 to 160 new products.'
Now the ₹ 20,000 crore FMCG company is stronger, vibrant and connected, added Narayanan,
It again got its pole position in the fast-growing instant noodles segment, where it still dominates with over 60 per cent market share from near extinction.
"It's the only example of a brand that went from market leadership to death and back to leadership in three months time and from then on it has been a journey that has been upwards despite the crisis that we have faced," said he noted.
Nestle India's turnover is now about 2.5 times what it was in 2015 and our profits are about five times what it was in 2015, before the Maggi crisis.
"Our market capitalisation is about 4 times what it was in 2015. Our number of shareholders is about 7 times," he said, adding, "our return of equity, which is a measure of the performance of the company went up from 19 per cent to almost 90 per cent."
Overall, the proportion of new innovations, which was around 1 to 2 per cent of the turnover, went about 7 per cent now.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India.com
34 minutes ago
- India.com
Trump's 50% tariffs on India! which sectors will impact? study says ‘estimated impact of…'
U.S. President Donald Trump has announced a 50% tariff on Indian goods, which will take effect from August 7. This move raised major concerns about its potential impact on the Indian economy. However, there's some good news a new report suggests the impact will be minimal. According to a study by the PHD Chamber of Commerce and Industry (PHDCCI), the tariff is expected to affect India's GDP by only 0.19%, which is almost negligible. Out of India's total exports worth $86.5 billion, only $8.1 billion around 1.87% will be affected by this move. Trump Tariffs: What PHDCCI Study Says? The paper, released by the PHD Chamber of Commerce and Industry (PHDCCI), also recommends a series of measures to mitigate the impact of US tariffs. 'Our analysis indicates that there will be an estimated impact of only 1.87 per cent on India's total global merchandise exports and a negligible 0.19 per cent on India's GDP as a result of a 25 per cent tariff announced by the US on India,' said Hemant Jain, President, PHDCCI. The study said the total potential export impact is estimated at USD 8.1 billion based on 2024-25 merchandise exports of USD 86.5 billion (1.87 per cent of India's total global export). Which Sectors Will Impact By Trump Tariffs? Among other sectors, the study said the levies would impact engineering goods (USD 1.8 billion), gems and jewellery (USD 932 million), and ready-made garments (USD 500 million). In the wake of the US tariffs, the industry body has recommended several measures, including increasing market penetration, product development and market diversification. It suggested that stakeholders should negotiate bundled-pricing deals (textiles plus accessories) to absorb some tariff cost and maintain shelf-price competitiveness. 'Leverage Indian diaspora networks (trade fairs, cultural events) to boost volume with existing buyers under current product portfolios,' it said. PHDCCI also made a strong case for investments in joint ventures with US firms to produce tariff-sensitive goods on-shore, thereby converting exports into high-value services and intellectual property (IP) licensing. (With Inputs From PTI)
Mint
an hour ago
- Mint
Swiss Firms Rethink Global Strategy After Tariff Surge
Simon Michel couldn't take the risk of waiting any longer. As Switzerland was assessing the shock announcement that the US would impose a 39% tariff, the chief executive officer of Ypsomed Holding AG realized that he needed to act. Ypsomed plans to move some production of medical devices to the German city of Schwerin, where the tariff is less than half the Swiss level. The executive also wants to ramp up production in the US, he told Bloomberg News. The Burgdorf-based company isn't alone. Across the country, executives and owners at businesses — from large multinationals such as food giant Nestle SA to small domestic champions — are trying to figure out how to deal with the new reality. The scale of the levy exceeded all expectations and caught the Swiss business elite off guard. In a call with executives on Monday, one of Switzerland's chief negotiators said that they were still working on getting the overall tariff rate down. Their response to her was blunt: there's no substitute for the US market. Plans to move, such as Michel's, could still change if Switzerland gets Donald Trump to lower the tariff. But with so much at stake, some businesses are taking matters into their own hands. Machine-tool maker Netstal Maschinen AG is looking to reduce the share of Swiss components in its supply chain for products aimed at the US market, which accounts for approximately 15% of revenue. Orders from the US have already fallen 20% in the first half of 2025, CEO Renzo Davatz said. And it's likely to get worse if the Swiss don't get a better deal. A one-hour drive away in Weggis, Adrian Steiner, the CEO of Thermoplan AG, which builds coffee machines for Starbucks among other things, is sketching out plans to expand production capacities in the EU and the US, he said. However, he wants to wait for a final decision until the US tariffs kick in. One high-profile consumer product caught up in the Swiss tariffs is Nespresso. Though Nestle SA sells the coffee capsules all over the world, it only produces them in Switzerland. Most of its other product lines are made locally for their respective markets. The same holds true for many of Switzerland's international listed companies, including consumer brands such as Lindt & Spruengli AG and Logitech International AG, as well as industrial players like ABB Ltd and Holcim AG. After Trump's so-called Liberation Day announcements on tariffs, some firms without fully diversified production front-loaded shippings to the US. Shipping company Kuehne and Nagel International AG saw a slight increase in industry-wide shipments from Switzerland to US in the period. Switzerland is only a small part of their business. But for companies that waited, believing the government's optimistic messaging about a US deal, there was a shock last week. Now, there's no time. 'There is some movement to expedite loadings, but generally the timeline is too tight to load unplanned shipments into containers and to then gate in and get on a ship,' a spokesperson for Kuehne and Nagel said. 'Many hinterland manufacturers simply did not have time.' The risks to the Swiss economy are sizable. A 39% tariff rate might knock off 1% of Switzerland's gross domestic product over the medium term. While large multinational companies have some chance of reorienting supply chains and production to cope, it's much harder for smaller family-owned businesses. There's also the personal cost. Lobby group Swissmem says the tariffs put tens of thousands of Swiss jobs at risk. Among Switzerland's top companies, Roche Holding AG and Novartis AG are in the clear for now as pharmaceuticals are exempt. But that might soon change, with Trump warning he could announce tariffs on the sector in the next week. Some companies have tried to get ahead of the tariffs by frontloading early in the year. 'We transferred a lot of stock already in the first six months of this year when the story about the tariffs started,' watchmaker Swatch said in a statement. 'In such a situation, inventory is key and a competitive advantage.' With assistance from Naomi Kresge, Jennifer Creery, Noele Illien and Sonja Wind.
The Print
an hour ago
- The Print
Andhra govt to roll out free bus travel scheme for women statewide from Aug 15: Minister
'I'm happy to share that free bus travel for women will commence on August 15,' said the State Information and Public Relations Minister, adding that the initiative is aimed at empowering women and enhancing their access to opportunities in education, employment, and other sectors. The scheme, titled 'Stree Shakti' (Women's Power), is expected to cost Rs 1,942 crore annually—approximately Rs 162 crore per month—and aims to empower women by improving access to education, employment, and mobility. Amaravati, Aug 6 (PTI) Andhra Pradesh Minister K Parthasarathy on Wednesday announced that the state government's flagship free bus travel scheme for women, a key poll promise, will be launched across the state on August 15. Addressing a press conference at the Secretariat after a Cabinet meeting chaired by Chief Minister N Chandrababu Naidu, Parthasarathy dismissed reports suggesting the scheme would be limited to select districts. 'There were reports that the scheme would be restricted to certain areas, but it has been decided to implement it statewide,' Parthasarathy said. Of the Andhra Pradesh State Road Transport Corporation's (APSRTC) total fleet of 11,449 buses, 8,456—nearly 75 per cent—will operate under the 'Stree Shakti' scheme. Bus services such as Palle Velugu, Ultra Palle Velugu, City Ordinary, Metro Express, and Express will offer free travel to women. The initiative is expected to benefit up to 1.4 crore women annually, with each family potentially saving up to Rs 1,000 per month, Parthasarathy said. The Cabinet also approved several other key proposals, including the Andhra Pradesh Land Incentive for Tech Hub (LIFT) Policy 4.0 (2024–2029). Parthasarathy said the policy was introduced in the wake of Andhra Pradesh's bifurcation and loss of Hyderabad to encourage economic development using existing infrastructure and talent. Under the policy, eligible entities will be allotted land at Rs 0.99 per acre across the state. In the power sector, the Cabinet cleared a government guarantee of Rs 900 crore to the State Bank of India (SBI) and Union Bank of India (UBI) to prevent negative reporting to statutory bodies such as Credit Information Bureau India Limited (CIBIL) and Credit Rating Information Services of India Limited (CRISIL) regarding the Andhra Pradesh Power Development Company Ltd (APPDCL). Delays in payments from DISCOMs to APPDCL were cited as the primary reason for the financial strain. Additionally, the Cabinet approved a proposal by the Energy Department to increase the free electricity quota for hair-cutting salons from 150 units to 200 units per month to support the social and economic upliftment of the Nayi Brahmin community. Further, government guarantees amounting to Rs 3,544 crore and Rs 1,029 crore were approved for Andhra Pradesh Southern Power Distribution Company Ltd (APSPDCL) and Andhra Pradesh Central Power Distribution Company Ltd (APCPDCL), respectively. These are in lieu of counterpart and interim fund loans sanctioned by PFC Ltd for the successful implementation of the revamped distribution sector scheme (RDSS), with a two per cent guarantee commission. The Cabinet also extended the ban on the Communist Party of India (Maoist) and its front organisations under the Andhra Pradesh Public Security Act, 1992, for another year. These include the Radical Youth League (RYL), Rythu Coolie Sangham (RCS), Grameen Peedala Sangham, Radical Students Union (RSU), Singareni Karmika Samakhya (SIKASA), Viplava Karmika Samakhya (VIKASA), All India Revolutionary Students Federation (AIRSF), and Revolutionary Democratic Front (RDF). Among other decisions, the Cabinet sanctioned five assistant public prosecutor posts for Puttaparthi, Movva, Gannavaram, Gajuwaka, and Tirupati, and approved a proposal allowing the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) to raise a Rs 7,500-crore loan for industrial development. PTI STH SSK KH This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
