GSK PLAYS CATCH-UP IN
FOODS & BEVERAGES
Horlicks wants to go beyond Foodles, cereal bars and biscuits
VIVEAT SUSAN PINTO
ven as the prospect of growth
E drives new players into India’s
booming over `10,000-crore or-
ganised foods & beverage (F&B)
market, existing players are
ramping up fast in a bid to secure their po-
sition in the expanding segment. The or-
ganised F&B market in India is growing at
about 15 per cent per annum, so nobody
desires to miss the bus at any cost.
The consumer healthcare arm of phar-
ma major GlaxoSmithKline (GSK) is no
exception, as it eyes a larger play in the
F & B market. The maker of Horlicks and
Boost already contributes seven per cent
in revenues to the pharma major’s glob-
al consumer business, pegged at $5.1 bil-
lion. India, say company officials, is the
third largest market for GSK Consumer
Healthcare after the UK and the US. So
wanting to grow the business further is
logical, they say.
GSK’s consumer healthcare business,
however, has been largely driven by its
health food drink or HFD portfolio in In-
dia, where it enjoys a dominant 67 per cent
share with Boost, Maltova, Horlicks and
Viva. In terms of share in topline, it is close
to 90 per cent, say sector analysts tracking
the company.
However, this is slowly but steadily
changing as the company attempts to step
out of the HFD category into allied food
& beverages, say company executives.
Leading the charge is Horlicks, GSK’s
`1,500-crore brand — easily the largest in
its portfolio contributing 70 per cent to the
“The 2X Vision was to double
the business in four years.
This can be achieved by
expanding the horizon of our
existing brands”
PRASHANT PANDEY
GM Marketing, Glaxo SmithKline
Consumer Healthcare
brand’s revenues globally.
GSK has been extending the franchise
of Horlicks into territories simply un-
thinkable earlier. “This began with cereal
bars or nutribars, followed by toddler bis-
cuits, and then Foodles,” says Prashant
Pandey, general manager, marketing,
and head of the Horlicks brand,
Glaxo SmithKline Consumer
Healthcare.
This expan-
sion, he says, is
part of the com-
pany’s 2X Vision.
“The vision was to
double the busi-
ness in a span of
four years. This
we felt could be
achieved by ex-
panding the hori-
zon of our existing brands,” he says.
Horlicks, he says, was the most obvi-
ous choice, given the trust and equity it en-
joyed with consumers in the country. Hor-
licks has existed in India for over 100 years
now as a healthy milk food drink, target-
ed at growing children, mainly in urban
areas. There are a number of variants of
the original Horlicks, points out Pandey,
beginning with Junior Horlicks that the
company launched in 1986, following it up
with Mother’s Horlicks for pregnant and
lactating women in 1994, then Horlicks
Lite in 2006, and more recently, Women’s
Horlicks. “The idea,” says Pandey, “has
been to make sure Horlicks touches the
lives of different consumers and is not
restricted to one consumer segment alone.”
Sector analysts agree as much. Says
Anand Shah, senior FMCG analyst, Angel
Securities, “The move to expand the Hor-
licks health food drink portfolio has been
a clever one. You are not just depending
on kids as consumers, but targeting the
crucial segment of women as well.”
GSK at the moment is test-market-
ing an economy product called Asha un-
der Horlicks, which is targeted at rural
consumers. The test-marketing is on in
Andhra Pradesh and Karnataka, says
Pandey. The product is priced at `85 for a
500 grams pack in comparison to `135 for
the same SKU in urban areas.
But the bigger challenge for GSK is ex-
panding its foods portfolio. Though Pandey
declines to comment on potential areas of
entry, people in the know say it will in-
clude breakfast and mid-day meals. Al-
ready, say sector analysts, 10 per cent of
GSK’s topline of `1,984 crore is contributed
by new products including noodles, ce-
reals bars and biscuits. The gameplan, ac-
cording to persons in the know, is to
take this contribution to 20 per cent in the
next two years.
Pandey says a combination of factors
will drive this growth including new for-
mats and flavours of existing products
as well as possible launches in new areas.
Pandey refuses to be drawn into a con-
versation about proposed acquisitions say-
ing the firm is not closed to any prospect
at this time. Incidentally, GSK’s last ac-
quisition was made a decade ago in 2000,
when it acquired Viva and Maltova from
Punjab-based Jagatjit Industries.