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Maggi (Germany)

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Maggi is the main international culinary brand in the Nestlé portfolio, and #2 in the worldwide sector to Unilever's Knorr. It is one of the company's strategic global brands, distributed in around 60 countries worldwide, although it is strongest in its heartland of continental Europe, especially Germany, where it regularly features as the country's most trusted food brand. It is also strong in France and Switzerland, in some Central European countries, and parts of Africa. Another key market is India, where Maggi instant noodles enjoyed enormous popularity until unproven allegations of lead contamination prompted Nestle to recall all supplies temporarily pending an investigation.

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Brands & Activities

In Germany, the Maggi range comprises more than 350 separate products, from the core flavourings and bouillons to an extensive selection of instant soups, frozen meals and prepared sauces. The company also operates Maggi KochStudio cookery clubs in several German cities, which present monthly live cooking shows and teaching courses for paying customers, as well as a busy YouTube channel. Maggi's German sales alone are estimated at around €1bn.

Oddly perhaps, Maggi has been available in Latin America since the 1950s, with the result that it is now positioned there and in the US as an "authentic Latino" food product. It has adapted itself just as readily to local tastes in India and the Middle East. In Asia, it is closely associated with two local producers, Totole and Haoji, both part-owned by Nestlé. Nevertheless, the brand is still run from Germany, and the Maggi division also manages European production and marketing of Nestlé's Buitoni Italian food range and Thomy mayonnaise and salad dressings.

Perhaps its biggest success in Asia has been with a range of cheap instant noodle products, which had proved especially popular in India. The Maggi culinary brand was Nestle's most valuable by far in India in 2014, accounting for almost 30% of local sales, or over $600m. Instant noodles accounted for the bulk of that, as much as $450m. However, the company suffered a serious blow in 2015 as a result of a ban by local food safety regulators on these noodles products following allegations of lead contamination. Nestle vehemently denied the accusations, but withdrew all Maggi products from sale pending a full investigation. The company said it was unable to find any lead traces in its own selection of samples, and contended that the products tested by regulators were accidentally contaminated after opening through poor handling.

Ironically the issue only arose because Nestle appealed against an earlier complaint from regulators about misleading claims on Maggi packaging relating to MSG. The supposed lead contamination was only discovered when the original noodles sample was retested. The Indian government is also seeking damages from the Swiss food giant over the case, which has dented consumer trust in the company's other products. Media coverage showed angry customers burning piles of noodles in anger over the possible harm to their health. However, Nestle's case has received moral support from Singapore's food safety watchdog which found no contamination in samples of Maggi noodles imported from India. Nevertheless, Nestlé set about collecting and destroying around 400m packets of Maggi noodles in general distribution throughout India, a huge logistical challenge that is cost as much as €45m.

The brand has slowly rebuilt its market position since then, though it has yet to regain the 80% local market share it once commanded. By May 2017, though, it had climbed back to around 60%.

Background

Swiss-born Julius Maggi inherited his father's flour mill in 1869, at around the time that the Industrial Revolution was reaching its peak. Inspired by a friend who was an inspector of factories, Maggi set about improving the generally appalling diet of industrial workers, experimenting with different cheap but nutritional foodstuffs. Eventually he developed a form of long-life ground vegetable flour, effectively the first vegetable stock, and secured the backing of the government's public welfare unit to market his invention commercially. The first products were launched in 1882, a range of instant pea and bean soups. These, as well as a bottled liquid seasoning introduced in 1886, proved extremely successful, and by the turn of the century, Maggi & Company was producing not only powdered soup, but also the first bouillon cubes, sauces and flavourings.

The company also established offices in several other European countries, as well as the United States. Following the death of its founder in 1912, management of the company was entrusted to Ernst Schmid, and the company's manufacturing base relocated to Germany. The business was renamed Allgemeine Maggi, and later Alimentana. Growth was stifled by the First World War and then hyper-inflation in Germany during the 1920s. During World War II the company's factories were virtually destroyed. Facing collapse, Alimentana was acquired in 1947 by Nestlé, then only a manufacturer of powdered milk, chocolate and coffee.

Over the next few years the business expanded rapidly, introducing scores of new products, including the first tinned ravioli in the 1950s. A wide variety of other international foods followed. In 1959, the brand opened the Maggi KochStudio, or Cooking Club, a dedicated food research and cooking school which aimed to be a more mass-market version of France's Cordon Bleu cooking school. This launched a series of cooking demonstrations and events which eventually spread across Germany. The brand also hosted its own TV cooking programme. Nestlé began rolling out the Maggi brand worldwide in the 1980s.

Last full revision 5th July 2017

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