Jas Business Blog

Financial Chronicle reports that GSK will be exploring the possibility of extending the Horlicks brand in several food categories over the next 12 to 15 months. It’s significant sales initiative – Horlicks Vending machines has already wrapped up due to lack of sales, so such a step to expand the mature brand like Horlicks is a strategically important step in long run. Glaxo Smith Kline (GSK) has launched a new product – Nutribar in Indian market under Horlicks brand name in this very regard. Few years back Horlicks had ventured into biscuits for same reason. Horlicks has about 60 percent of market share in the Indian health drink market with annual revenue close to Rs.1000 crore.

You would have noticed the presence of these three different variants of Horlicks Nutribar stacked up just near the checkout section of your modern retail outlets or the kiryana shops. With this launch Horlicks has entered the cereal bar market in India, which until now had presence of only imported products like Ritebite. The Horlicks brand, owned by GSK, has gone in for a category extension with this launch. The earlier category extension for Horlicks was into biscuits.

“The nutrition bar segment is actually non-existent in the country. As per our estimates, presently the category sales would be anywhere around 10 crores. Globally it is huge. In US the market for nutrition bars is worth a billion dollars a year. It is a good time to enter and grow the category,” said Shubhajit Sen, executive vice president, marketing of GSK India.

Priced at Rs 15, Horlicks Nutri Bar it is targeted at young adults in the age group between 15 and 35. It is a nutritional snack available in three flavours Cereal ‘n’ Milk, Choco Crispy and Nuts ‘n’ Raisin. As per Sen, GSK wants to leverage from the Horlick’s strong brand equity and hence wants to extend its offerings through the brand (instead of launching as a new brand). GSK has,hence, used Horlicks brand as an endorser brand as of now and may later make Nutribar a parent brand itself if it captures market well.

GSK in India invests about 12 and 12.5 per cent of its sales on advertising and promotion activities. In 2008, the company spent around Rs 180 crores in the communication activities and has said it would maintain the same in the current fiscal year. The company overall turnover last year was Rs 16,00 crore.The cereal or nutritional bar market is a sub set of functional foods markets, the latter being pegged at about Rs 17,000 crores right now in India.  Globally , functional foods have become a high growth market because of the health and convenience factors. India too has seen following such a trend.

Addendum

Nutribar may be shown useful in various ways, but as of now it has been marketed as an impulse buy. GSK has also come up with some innovation in modern retail merchandising. On right side below you can see a light plastic hanger which can be just fixed near the checkout counter or the shelves and is easy to install and dismantle. One single unit carries 27 units (9X3)with side part used as advertising space. It is effective as the salesperson can ‘install’ them when he comes to deliver the packs.

On left you can see the new packaging where the box itself is used as the branded shelf merchandising. If you see the box of Cadbury’s perk on left of this box, the person has ripped off the top of the box to showcase units inside, which has been effectively and elegantly handled by Nutribar package. The box itself takes care of right advertising as designer knew how it was supposed to be placed beforehand.