Aashirvaad: ITC rushes to stomp out rumours against its flagship brand

Experts say it has learnt its lessons from rival Nestle's Maggi crisis

Just when everything seemed to be moving at perfect pitch for ITC’s Rs 42 billion Aashirvaad brand, a six-month old fake video that claims the conglomerate mixed plastic in its flour has found fresh legs on social media and pushed the company’s crisis management team into a state of high alert. ITC has launched a campaign countering the allegations, lodged police complaints in three cities and garnered industry support to stop the spread of such videos.

No company wants a rerun of the Maggi crisis, say brand experts, while an ITC official said the company has thought it better to go and talk to its consumers before the situation escalates. “There’s a lot of stuff we learnt from the noodle days,” the official said.

The first lesson is to never leave things too late. No rumour is too small and social media platforms exercise a power that belies their reach and user demographic. During 2015, when Maggi went off the shelves, the entire noodle category was affected by rumours of contamination, unhealthy ingredients and so on. ITC’s Yippee brand also suffered as consumers moved out of the category. 

“Sales can get impacted for the entire category; people might say we will buy wheat and grind it ourselves. We have to be proactive. I can’t wait till my sales are affected and then say we need to do something about it,” said Hemant Malik, divisional chief executive of ITC’s foods division.

The Indian food market has seen a few situations spin out of control in the past. Apart from Nestlé, Mondelez India for its Cadbury’s brand, Coca-Cola and PepsiCo for their cola drinks and a few other smaller beverage makers have had to face scrutiny over alleged adulteration issues and contamination complaints. One of the criticisms levelled against the brands was that they were slow to react to the crisis, leading to severe damage to their image. 

The ITC story is different say brand experts. The cola and the chocolate controversy required the companies involved to change the product packaging or to change the distribution systems and deal with the regulatory authorities, all of which takes time and slows down the response cycle. “And unless the company is ready, issuing public statements isn’t a good thing to do,” said Ambi Parameswaran, CEO Brand Building.com.

However the regulators have not been called in for ITC, yet. Moreover, the company has involved the police in several cities to stop the uploading of the videos. “Thus compared to previous instances, ITC’s response has been quicker and they are handling it well,” Parameswaran added.

After the videos went viral, the company lodged FIRs with the Kolkata, Hyderabad and New Delhi police. It has a ‘stay order’ from the Bangalore High Court to stop circulation of those videos. It also brought in industry experts to explain that wheat has gluten, but that is not plastic. It also ran a survey in Uttar Pradesh-Bihar-West Bengal-Assam to understand the extent of damage to the brand.

Officials say while in Assam, most of the people surveyed knew about the video, the recall was about 50 per cent in the other states. That was alarming. “When you hear from two to three people you start doubting. It as good as doubts the credibility of wheat itself,” Malik reasoned. Thereafter, it launched a digital and then, a television campaign, telling people not to believe in rumours. It has also roped in food and nutrition experts to speak on the issue. The homepage of the ITC portal has been modified too with a flashing sticker that says Aashirvaad does not contain plastic, the same is also on the landing page of the Aashirvaad micro website. ITC is also conducting daily sentiment analysis in its key markets.

Brand consultant Sandeep Goyal said that ITC is a “more watchful company as compared to its peers”. ITC wants to change the perception that people have about it being a tobacco maker, which makes them more careful and alert, Goyal said.

“One of the challenges of becoming a very large brand is that there are a large number of people probably who aren’t very happy with you because you have become successful,” Malik said, pointing out to a possibility that there is an effort to malign the brand. Company sources say that their doubts about malicious intent were reinforced when they saw around 375 such videos being uploaded in a single day.

“Once we saw it is a pattern and there’s not one person who is doing it, we realised it’s not a stray incident. A lot of people who are uploading the video have newly opened accounts and have not shared or uploaded anything other than this,” a company source claimed. Malik believes such videos have a short life but he is not leaving anything to chance when it comes to ring fencing the brand that has been clocking a compound annual growth rate of 16-17 per cent over the past few years.