They are two of the world’s best known consumer product companies.

They are both European.

Both have a long history in India.

Yet, the differences between Nestle India Ltd and Hindustan Unilever Ltd (HUL) are significant.

Since 1998, Nestle, now embroiled in a controversy over the presence of lead in its Maggi noodles and staring down the barrel of a possible product ban, has been led by expats in the country. In its hour of need, the company has found itself lacking a local face who can communicate directly and well with regulators and the media.

The troubles with Nestle and the food regulator surfaced in April when the Uttar Pradesh Food Safety and Drug Administration said after tests that Nestle’s Maggi noodles contained lead and monosodium glutamate higher than the legal maximum. Some other states claimed the same after tests of their own. Nestle India withdrew Maggi instant noodles across India on 5 June and is contesting the government’s test results, saying that the product is safe according to its own tests. On Monday, Singapore cleared sales of Maggi noodles imported from India after its own tests.

Nestle India didn’t respond to emailed queries.

In contrast to Nestle, Hindustan Unilever has been led by Indians since Prakash Tandon took over as the first chairman of the company in 1961. At that time, 191 of Hindustan Unilever’s 205 managers were Indian, a timeline on the company’s website says. For Indian managers, career prospects at the company look even brighter now.

“Over 200 managers of HUL currently serve Unilever globally in leadership roles across markets and functions with the numbers steadily increasing over the last few years," a company spokesperson said in response to queries sent by Mint.

Hindustan Unilever can trace its history in India back to 1888.

Then, Nestle isn’t a laggard either. It has been in India in some form since 1912.

But even today, most people see Nestle India as the Indian arm of a very-Swiss multinational. Hindustan Unilever is seen as a local company that just happens be the Indian unit of a multinational. Indeed, Nestle India likes to stress its Swiss heritage. Hindustan Unilever doesn’t really emphasize its Anglo-Dutch parentage.

“HUL is Hindustan first and Unilever next while Nestle does not have Hindustan before Nestle," said S. Raghunath, professor of corporate strategy and policy at Indian Institute of Management (IIM), Bengaluru.

While Hindustan Unilever has a powerful voice on matters pertaining to India strategy and implementation, Nestle India has a strong headquarters orientation, although it is open to ideas required to adapt to the Indian market, he added.

The difference extends to products and reach too.

Nestle India is still largely perceived as an urban company, focused on a few categories; Hindustan Unilever is seen as a home-grown company with a diversified portfolio. Hindustan Unilever today reaches 6.3 million outlets directly and indirectly. It directly reaches three million stores whereas Nestle’s total reach is 4.5 million stores of which it reaches only a million outlets directly.

Hindustan Unilever’s products seem to have a greater affinity to local culture and ethos, said Abraham Koshy, a professor at IIM, Ahmedabad. In contrast, Nestle India’s strategy has always been more global, Koshy said.

Interestingly, Nestle India has enjoyed significant success localizing its products or at least their usage—first with Milkmaid, a condensed milk offering that the company cleverly positioned as the ideal ingredient in tasty Indian desserts (the campaign is chronicled beautifully in Subroto Sengupta’s book Brand Positioning), and then with Maggi, which now finds itself in a storm and has been taken off the shelves. Nestle India is now engaged in one of the biggest recalls in Indian history—withdrawing as much as 25,000 tonnes of Maggi, around 200-300 million packs, from the market. Maggi accounts for 30% of the India unit’s revenue. And unsurprisingly, 11 brokerages have cut the Nestle India stock’s target price since 21 May, when the news broke.

Sure, the decentralization strategy which has helped Hindustan Unilever is now changing as the company gets more integrated with the global operations. In 2013, the parent increased its share in the Indian unit to 75% from 52.28%.

Meanwhile, Nestle under its new managing director Etienne Benet, who came to the helm in 2013, has launched low-fat Nestle sweet lassi, Nestle buttermilk with ayurvedic herbs and spices, and Maggi oats noodles.

Still, in its hour of crisis, Nestle India has discovered that it doesn’t have an Indian manager, an Indian face, an Indian voice to lean on. The company does have its crop of Indian managers, several in global roles, but not to the extent of Unilever Plc., roughly 10-12% of whose global managers are Indian.

Shivani Hegde, who has been described as the “mother of Maggi in India" by some newspapers, joined Nestle India as a management trainee. Over 30 years, Hegde headed many departments at Nestle India, including sales and human resources, and was the category head for Foods division at Nestle India. Hegde is now the managing director of Nestle’s Sri Lanka business. She flew down to help handle the crisis but has largely been invisible.

Irrespective of whether its management were local or expat, Nestle India would have still faced the crisis. Its response, though, may have been different, say experts. “Companies with strong local management teams, have a larger local agenda and are able to push them through as they are empowered by the global management," said K. Sudarshan, regional managing partner (Asia), EMA Partners International, a headhunting firm.

The key to a solution may, however, lie in moving swiftly to address the concerns about product safety, rather than trying to solve it immediately.

“The companies that handle crises well are the ones that move quickly and unilaterally and don’t argue or debate. You have to be swift and unilateral in removing the product from the market and over time let the truth emerge," said Ravi Venkatesan, a former chairman of Microsoft Corp.’s India operations.

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