Lessons from the MDH-Everest row: Navigating foreign waters and engaging the conscious Indian consumer

Amid rising scrutiny and foreign bans on iconic Indian FMCG brands, experts suggest ways for these brands to navigate the situation.

Last week, Malaysia became the latest country to ban Everest’s Fish Curry Masala and MDH’s Curry Powder for allegedly containing traces of Ethylene Oxide (EtO). Nepal, Hong Kong, and Singapore have also banned the two spice brands for the same reason. EtO is typically used by the spice industry to reduce microbial contamination, such as E. coli and Salmonella; however, it’s regulated differently across the globe.

FSSAI tested samples of spices from these two major brands in 28 accredited laboratories and found no trace of EtO.

However, reports of these spices being banned in international markets are a major concern for Indian consumers, given the iconic stature of both brands. Everest and MDH spices are staples on almost every Indian pantry shelf.

It's worth noting that while MDH dismissed all the allegations after the Hong Kong and Singapore bans, there has been no communication regarding the issue after that. Everest on the other hand, is yet to release any kind of statement or clarification regarding the issue. Industry experts decode how brands should navigate the situation and regain consumer trust.

A learning opportunity

According to Nisha Sampath, managing partner at Bright Angles Consulting, the situation is a learning opportunity for traditional Indian brands that are navigating international waters. “A lot of markets outside India are very sensitive and stringent regarding their food policy. Indian brands that are serving international consumers must navigate these policies very carefully.”

Sampath adds that both brands should treat this opportunity as a learning experience. “Both brands are family-run businesses at scale. They may not have the typical crisis management skills that other FMCG brands possess.”

Similarly, Sridhar Ramanujam, founder and CEO at Integrated brand-comm, says that these brands should understand that they serve families and not just individuals. “Given the rise of influencers and how powerful they are, as a brand owner, one must proactively address these issues.”

Ramanujam further states that before coming out with any communication, brands must ensure that they are following all the guidelines and protocols. “The communication part comes later,” he says.

Tarunjeet Rattan, managing partner at Nucleus Public Relations opines that the brands need to address the issue head-on. "More silence is only going to hurt them. Ideally, they should have noticed the tide turning and started out earlier, proactively communicating about the credibility of their products. Now when things are at a hilt, they need to be proactive about the very essence that defines their brand and is integral to almost every household in India," she says.

Bhaskar Majumdar, head of marketing communication, CSR & Digital Egis - India and South Asia says that it's imperative for these brands to communicate effectively with their consumers.

He adds that brands should immediately issue transparent statements addressing the bans and assure consumers of their commitment to quality and safety. According to him, clear communication about the steps being taken to address the issue and any potential risks is essential. 

“Both brands must conduct thorough investigations into their supply chains and manufacturing processes to identify any sources of EtO contamination. If necessary, the brands should initiate recalls or offer product exchanges for affected batches. Rebuilding trust with their consumers will be essential for these brands to regain their reputation and continue serving their loyal customer base.”

Past examples

Ramanujam further recalled how Cadbury handled a similar situation almost 20 years ago when a few customers in Mumbai complained about finding worms in Cadbury Dairy Milk chocolates in 2003.

The heat of negative publicity melted Cadbury's sales by 30% during the festive period and Cadbury's advertising went off air for a month and a half after Diwali.

However, a few weeks later, the brand launched the public relations (PR) campaign Vishwas - an education initiative covering 190,000 retailers in key states. Furthermore, it revamped its packaging by adding a metallic poly-flow.

Bharat Puri, the then managing director, emphasised the importance of consumer trust in products, stating, “We believe that to be a responsible company, consumers need to have complete faith in the products. So even if it calls for substantial investment and change, one must not let consumer confidence erode.”

The brand further roped in Amitabh Bachchan as the brand ambassador and indulged in a full-fledged marketing campaign on the back of his stardom.

The rise of the ‘conscious’ Indian consumer

MDH’s Dadaji and Taste me best, Mummy aur Everest campaigns made these two brands iconic and they are trusted by a large majority of the country. These adverse reports also come at a time when there is rising scrutiny of FMCG brands in India.

Many FMCG brands like Lay’s, Bournvita, Horlicks, and Cerelac, among others are finding themselves in a hotpot. While some brands are accused of using low quality ingredients for their products in India, others are in a fix due to excessive sugar or salt content in their products.

As per Sampath, brands today must take cognizance of the fact that consumers are evolving rapidly and are more conscious than ever about what they consume. She further spoke about the rise of smaller D2C players in the category like TheWholeTruth Foods, who are speaking to consumers directly to build trust and affinity.

Similarly, Rattan of Nucleus Public Relations says that legacy brands need to up their game and move ahead with modern means of communication reaching out to their target audience on all levels and touchpoints. 

In 2023-24, India's spice exports totalled $4.25 billion, accounting for a 12 per cent share of global spice exports.