Market Challenges and Competitive Pressure
For a global brand like MILO, success in one market does not guarantee success everywhere. The reasons why MILO was discontinued in certain regions are often tied to specific market dynamics and competitive pressures that Nestle failed to overcome. The case of India serves as a primary example of how a dominant, pre-existing market can stymie a new entrant, regardless of its global brand recognition.
The Indian Market: A Case Study in Competition
In India, Nestle launched MILO in 1996, but it failed to gain significant traction against established local brands like Horlicks and Bournvita. These competitors had already built a strong foundation with Indian consumers, who perceived health drinks as essential for overall nourishment and growth rather than just sports energy. MILO’s sport-centric marketing approach, which worked so well in Southeast Asia, did not resonate with Indian parents who prioritized academic performance. Furthermore, MILO was more expensive than its rivals, making it less attractive to price-sensitive middle-class families.
The Japanese Market: A Supply Chain Disruption
In Japan, the reasons for discontinuation were different. A viral social media post in 2020 extolled the health benefits of MILO, leading to an unprecedented surge in demand. Nestle Japan, which imports ingredients from Singapore, found its supply chain unable to cope with the sudden spike in orders. This led to a temporary halt in sales of several MILO variants, though the product was expected to return to shelves once the supply framework was re-established. This was not a failure of the product itself, but rather a temporary operational issue caused by unexpected market interest.
Recipe Changes and Consumer Backlash
Nestle has faced significant consumer backlash over recipe changes, which have sometimes led to temporary discontinuation or a complete reversal of the new formula. In 2015, Nestle changed the MILO recipe in New Zealand to make it healthier and more sustainable by adding different vitamins and removing vanilla flavoring.
The public reaction was overwhelmingly negative, with many fans arguing the new version tasted "disgusting" and less chocolaty. A "Change Milo Back" Facebook petition gained significant traction, and after four years of ongoing feedback, Nestle reverted to the original recipe in 2019. While the product wasn't permanently discontinued, the episode shows how recipe changes can lead to a 'soft' discontinuation by alienating the consumer base.
Table: Comparison of Market Challenges
| Aspect | India | New Zealand | Japan |
|---|---|---|---|
| Reason for Discontinuation | Intense competition, poor market fit, high price | Consumer backlash over recipe changes | Supply chain issues due to unexpected demand surge |
| Market Landscape | Mature market with strong local competitors (Horlicks, Bournvita) | Established, but sensitive consumer base | Low market presence, sudden spike in demand |
| Marketing Issues | Mismatch between MILO's sports image and local preferences | Failure to anticipate consumer loyalty to the original taste | Success of viral marketing led to operational failure |
| Resolution | Complete withdrawal from the market | Reversion to the original recipe after backlash | Temporary suspension until supply framework was rebuilt |
Ethical and Health-Related Controversies
Beyond market dynamics, MILO has also faced controversies over its nutritional claims, which have contributed to its withdrawal from certain promotional categories. In 2018, Nestle came under fire in Australia for labeling MILO with a 4.5 Health Star Rating. Public health groups argued this was misleading, as the rating was based on preparation with skim milk and not the powder itself, which is high in sugar.
Facing pressure, Nestle voluntarily removed the rating from its MILO powder products. In Malaysia, a similar controversy erupted after a viral video highlighted that MILO powder is 40% sugar, sparking debate about its 'healthy' image. These health-related discussions, while not leading to full discontinuation, forced Nestle to re-evaluate its branding and marketing strategy in different regions.
Conclusion: A Multi-Factorial Decision
There is no single answer to why MILO was discontinued; rather, the situation varies significantly by region. In some cases, like India, the decision was a strategic retreat from an unsuccessful market foray, driven by fierce competition and a failure to align with local consumer needs. In others, such as Japan, the halt was a temporary measure caused by an unforeseen supply chain issue. Recipe alterations, as seen in New Zealand, triggered strong consumer backlash, forcing a retraction. These varied instances demonstrate that discontinuation is not always a sign of a failing product globally, but often a result of targeted market failures, logistical issues, or consumer taste preferences specific to a particular region. The case of MILO is a prime example of the challenges inherent in managing a global brand with diverse market conditions and expectations. For more insight into how global brands adapt to local markets, see this comprehensive analysis of market localization strategies by Prototypr: [https://blog.prototypr.io/the-story-of-milo-s-success-in-southeast-asia-and-struggles-in-india-a8ca4aa1b528].
