GSK targets India

26 January 2012

NEW DELHI: GlaxoSmithKline, the healthcare group, is heightening its focus on consumer-facing products in India, a strategy led by moves to turn Horlicks, the firm's popular malted drink, into a "mega-brand".

The organisation saw sales of its non-pharmaceutical portfolio climb by 19% in the country last year, compared with a 1% improvement in the US, and a contraction of 1% logged in Europe.

More specifically, its consumer healthcare brands generated $350m in revenues in the opening three quarters of 2011, making up 9% of the global returns delivered by this part of GSK's operations.

Horlicks, a powdered drink, has proved particularly successful, having been reformulated to use malted barley and buffalo milk rather than cow milk, reflecting cultural traditions in India.

Originally, Horlicks was considered mainly as a drink for children, but the company has now rolled out extensions including Horlicks Lite, which is high in nutrients, and Mother's Horlicks, aimed at expectant or breast-feeding mums.

"We are trying to take Horlicks into a mega-brand strategy," Zubair Ahmed, managing director of GlaxoSmithKline Consumer Healthcare in India, told Bloomberg.

GSK has thus utilised the Horlicks brand name on goods like biscuits, cereal bars and instant noodles. Looking forward, it intends to introduce a ready-to-drink offering and healthy snacks.

Ahmed added that the limited availability of milk in southern and eastern regions of India, where infrastructure is somewhat underdeveloped, meant Horlicks was a widespread choice in these areas.

Euromonitor, the insights provider, estimated sales of Horlicks are currently almost twice those of Thums Up, Coca-Cola's leading soft drink, double those of Pepsi, and yield two times the revenue of Tata Tea.

"Glaxo is building on the healthy nutrition heritage of Horlicks in India," Richard Haffner, global head of beverages research at Euromonitor International, said.

Bisleri bottled water, made by Parle Bisleri, is the biggest packaged drink in India, according to Euromonitor.

Among the other brands attracting emphasis from GSK in India are its Lucozade energy drink and Eno antacid, demand for which is "exploding" in cities as fast food gains in popularity, Ahmed said.

Data sourced from Bloomberg; additional content by Warc staff