Horlicks plans acquisitions in the food segment

by:Genyu     2020-07-25
Horlicks, a known name in the Indian households in heading for change. The flagship brand of GlaxoSmithKline Consumer Healthcare (GSKCH) is now seeking new acquisitions in the food and health category. This implies that Horlicks, the name that conjures images of an energy drink and occasional biscuits, can now be tagged in broader categories such as cereals, yoghurt and more. The company is planning fresh acquisitions in the near future that could help attain its objectives. In the last two years, Horlicks (that accounts for R 1, 500 crore in annual sales) has made efforts now to move ahead. For several years, Horlicks saw success as a milk substitute in an Indian market where milk was scarce or expensive. It now desires to reinvent itself. Last month, GSKCH made everyone aware of its plans to endow R300 crore on uplifting Horlicks as a brand. The FMCG (fast-moving consumer goods) major said it would re-launch Horlicks in a new avatar. Moreover, it would also promote the brand across media, including the digital and in the mobile marketing space. Currently, under Horlicks as its umbrella brand, the company sells health drinks like Lite Horlicks, Women's Horlicks and Junior Horlicks. Along with this, they have also started to sell biscuits, noodles, energy drink and nutribars. The company is set to consolidate its current portfolio and venture into new segments. 'Horlicks has a strong equity and 70 per cent of GSK's global turnover comes from Horlicks. We are now looking at extending the Horlicks equity to other categories. The idea is to further consolidate categories that are new and at the same time look at opportunities in other categories,' said Prashant Pandey, head, Horlicks, GSKCH. Anand Shah, FMCG analyst with Angel Broking said, 'The company has been keen on acquisitions for quite some time now but nothing substantial has materialised. With a surplus cash of Rs 800 crore, the possibility of an acquisition is on the cards. The company's focus on expanding the Horlicks brand is quite clear and it may enter new segments under the food and health category,' In 2005, the company had revamped Horlicks and since then it was successful in achieving a volume sales of 12 percent. They also recently launched an instant noodles brand called Foodles pitted directly against Nestle's Maggie. The company aims to strengthen its distribution presence across India before introducing newer variants and smaller SKUs.
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