How Maggi won 60% market share and turned Indians into Maggiholics!?

Maggi originated in 1880s Switzerland and 100 years later it came to India with Nestle! Today it's India's most LOVED brand. Here's how they did it!

6th October 2022
3 min read

In a nutshell

Maggi's history spans 2 countries and dates back to ~150 years ago! The company was founded by Swiss entrepreneur Julius Maggi, who created a precooked soup and sauce brand, specifically targeting working women in the factories.

In 1947, this company was acquired by Nestle and they made it an instant noodle brand. Nestle brought Maggi to India in 1983. And, like their Swiss counterpart, they started targeting working women.

But, unfortunately, that strategy didn't work. You see, in the 1990s, women in India were fairly accustomed to their traditional diet of roti and sabzi (vegetable stew). So, changing their taste palette to a Southeast Asian, noodle-based diet, was near impossible.

Instead, they sold Maggi as an after-school, quick and easy snack for school-going kids. Maggi created the "2-min Maggi" brand, which means you can make Maggi in just 2 mins. So, mothers became the customers (who buy Maggi) and school-going children became their end consumers (who consume Maggi).

This positioning was the winning recipe that quickly:
a) carved out a whole new market for instant noodles in India
b) and, naturally won Maggi a 90% market share, which persisted for 25 years!

So, all their marketing was aligned towards this messaging. Here are some of their strategies:
A) Giving free hampers and taste samplesย 
B) Lower pricing to reach low-income households
C) On-point advertising
D) Double-down on distribution

But, it was not all easy sailing for Maggi. After having a spectacular 30-year run, in 2015, the company hit rock bottom when their product was tested to have more than permissible amounts of lead.

What followed was a full-fledged ban on all Maggi products. Which caused their market share to go from 80% to ZERO almost overnight!
We'll be covering their recovery journey and more in a follow-up article. So, stay tuned! ๐Ÿ˜‰


If there were to be a national snack that all Indians unanimously LOVE, it would have to be Maggi!

For 40 years now, people of all ages no matter their economic background, have turned to Maggi to satisfy their random snack cravings. In fact, in India, instant noodles are literally synonymous with Maggi.

Naturally, this means BIG bucks for Maggi's parent company, Nestle.

  • In 2021, Nestle India made a whopping profit of INR 1441 crores and revenue of INR 9373 crores [1]. Out of this, 30% of their sales are directly attributed to Maggi![2]
  • Owing to Maggi, Nestle enjoys a 60% market share of India's ~INR 11,600 crore instant noodles segment. [3]
  • Maggi has a monopoly in the market despite strong competition from big players like ITC, global noodles giant Nissin, and the local favourite, Patanjali.

But, how did Maggi buildd an instant noodle brand in 1980s in India, when both "instant" and "noodles" were totally foreign concepts? Well, we have covered that and Maggi's journey from Switzerland to many Indian hearts in this article. So, let's go! ๐Ÿš€

Maggi's Origins: From Switzerland to Japan to India

Maggi is perceived as a super modern brand. But, its history spans two countries and dates back to ~150 years ago!

Julius Maggi, a Swiss entrepreneur, invented precooked soup and Maggi sauce all the way back in 1886. The period marked a heavy influx of women participating in Switzerland's industrial revolution. So, Maggi was meant to nourish these women with quick, healthy meals.

Nestle, another Swiss company, bought Maggi in 1947. But, it was not until the 1950s, that Maggi was turned into an instant noodle brand that we all know today.

In 1958, Momofuku Ando invented instant noodles in Japan, and immediately the entire Japanese population was hooked. Nissin, the main Japanese company, was exporting instant noodles all over the world. On the flip side, India was fairly unaware of this noodle wave.

Now, Nestle of course wanted a piece of this emerging market and Maggi was its main product. But, Nissin had already captured the Japanese scene, where demand was super high. So, instead, Nestle turned to India to sell Maggi.

So, Nestle had a HUGE task ahead of them. They not only had to sell a product, but they also had to carve out a brand new market in a country which despised packaged foods!

Winning over Indian consumers: How Maggi positioned itself

Maggi entered India in 1983, and learning from its early Swiss history, they turned all their focus towards targeting working women.

But, unfortunately, that strategy didn't work. You see, in the 1990s, women in India were fairly accustomed to their traditional diet of roti and sabzi (vegetable stew). So, changing their taste palette to a Southeast Asian, noodle-based diet, was near impossible.

In fact, many in India believed that refined flour based noodles were unhealthy (which is not completely wrong!)

So, initially, Maggi was a flop product and Nestle had to think of a different way to penetrate the Indian market.

Maggi as an after-school snack!

Here's how Maggi repositioned themselves.

  1. Catch them young! โ€” Instead of targeting the adult population, Nestle sold Maggi as a snack for children, who were much more open to trying new food types.
  2. Understand the pain points โ€” Nestle recognized that working women and homemakers alike always struggled to make evening, after-school snacks for kids that were both filling and tasty. Nestle sold Maggi as that snack.
  3. Define product attributes โ€” Since this was a mid-meal snack, the preparation had to be quick and simple!

Maggi created the "2-min Maggi" brand, which means you can make Maggi in just 2 mins. So, mothers became the customers (who buy Maggi) and school-going children became their end consumers (who consume Maggi).

This positioning was the winning recipe that quickly:

  1. carved out a whole new market for instant noodles in India
  2. and, naturally won Maggi a 90% market share, which persisted for 25 years!

We'll later learn how targeting children also helped Maggi recover from its biggest controversy!

Lesson โž All startups seem like failures till they become an overnight success.

Maggi's marketing strategy

Now, the next step was to spread the word that a new snack was in town!

Right from the bat, Nestle hammered hard on the fact that

  1. Maggi was a quick, easy snack that was meant to relieve the usual pressures all mothers face.
  2. And, even though the preparation involves just cooking the noodles and adding the spice mix, the credit for making "tasty" Maggi goes to the mother.

So, all their marketing was aligned towards this messaging with taglines like
โ‡’ "2-min Maggi" & "Mom's Magic".

Here are some marketing strategies that Maggi used:

A) Giving free hampers and taste samples

Maggi started distributing free samples and hampers in schools. The bet was that once kids get a taste of the product, they would demand their parents to buy Maggi periodically.

B) Lower pricing to reach low-income households

Nestle experimented with a bunch of different sizes and pricing for Maggi. But, after a few years, they had penetrated well into the middle and upper-middle class households. But, the majority of opportunity was present in lower-income households. So, they introduced "chotu maggi" (little Maggi) which retailed for just INR 5. With this, Maggi's penetration increased by 60 to 70%! [4]

C) On-point advertising

Maggi has created some memorable ads and it has been one of their most effective marketing strategies. But, Maggi is also a great example of how ads can help introduce new products in the market.

Maggi's ads exactly portrayed their product messaging. For example, after a long day of playing cricket, the kid comes home and demands a quick snack. The mother is tired from working all day, so she quickly grabs Maggi, and viola in 2-mins, the dish is ready! The kid, of course, devours the noodles.

Now, if you were to watch this ad 10-times a day, you'd surely start craving some Maggi ๐Ÿ˜‰

Lesson

  1. No matter the competition or the present scenario, your startupโ€™s story is unique. So, tell your story!
  2. Great marketing involves "selling" while "helping".
  3. Sell your solution, before selling your product.

D) Double-down on distribution

Finally, with Nestle distribution networks and supply chain expertise, Maggi was able to reach every corner of the country in a cost-effective way.

Lessons โž Poor product with great distribution BEATS great product with poor distribution

The making of a HIT product!

The journey of Maggi from being a nobody to becoming the go-to instant noodle in India is incredibly crazy. And, they were able to do all this because:

  1. They accurately read the pulse of the most common problem all Indians face.
  2. They positioned themselves in such a way that their messaging directly targeted the sentiment of a very emotional population.
  3. They were able to spread this message and distribute the product with great efficiency all thanks to the many resources that come with being a Nestle product.

Lesson โž If your startup is built based on popular trends. Also make sure it actually solves real customer problems.

But, it was not all easy sailing for Maggi. After having a spectacular 30-year run, in 2015, the company hit rock bottom when their product was tested to have more than permissible amounts of lead.

What followed was a full-fledged ban on all Maggi products. Which caused their market share to go from 80% to ZERO almost overnight!

We'll be covering their recovery journey and more in a follow-up article. So, stay tuned! ๐Ÿ˜‰

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So, Amul is clearly doing pretty well at spending less while earning MORE!

Jockey's GENIUS marketing strategy to create an underwear brand

Before the 1990s, underwear shopping was a hush-hush affair. The shopkeeper would hand you any random product and you simply had to trust their judgement. Moreover, underwear was a strictly functional commodity and no one remotely imagined making a fashionable brand out of it.

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Jockey only got a fraction of attention from them and in 1973, when the Indian government forced foreign companies to dilute their stake to 40% or less, Jockey left the country!

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And finally, the Genomal family had shown that they were ready to experiment & make bold moves. This was particularly critical for Jockey, given their ambitious vision of creating an aspirational underwear brand.

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C) Promotional or Messaging
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2. Jockey is also completely debt-free, and has a healthy ROCE of ~64%, which is 2.2x that of Rupa (~28%).