Horlicks noodles: One too many?

Seema Sindhu / New Delhi March 1, 2010, 0:51 IST

GlaxoSmithKline is confident that Foodles will be a winner, but the jury is out on whether it will dilute the mother brands equity Product extension is not something new to Horlicks, the flagship brand of GlaxoSmithKline Consumer Healthcare (GSKCH). In fact, the health drink brand, which accounted for over 65 per cent of the Rs 1,985 crore revenue of GSKCH in the January-December 2009 period, launched 10 new products including variants last year.
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These include Horlicks biscuits, Nutribar, a nutrition drink for women, ready-to-drink flavoured milk dubbed Chill Dood and Horlicks Asha, a more affordable variant of the health drink etc. That frenetic pace is a reason why Horlicks continues to have over 50 per cent market share in India. Competitors Bournvita and Complan have just about 15 per cent share each. The latest brand extension is, however, audacious even by Horlicks own standards. In December, the company entered the noodles category with Horlicks Foodles. The main USP of Foodles is the Health Maker sachet which comes along with the noodles pack. The health maker sachet contains the essentials of five vitamins. Many analysts and observers, however, say there is little logic for Horlicks trying its hand in launching a noodles brand, which is a totally unrelated diversification. Besides, many say a foray into noodles may dilute Horlicks brand positioning as a health drink since noodle is perceived by many to be unhealthy, junk food. Naimish Dave, Director, OC&C Strategy Consultants, says noodles remains a test case. Introducing it on the Horlicks platform may be a gamble as this is one product that may not have a healthy connotation with mothers who will be the primary shoppers for the product. Subhajit Sen, executive vice-president for marketing, GSKCH, however, says pre-launch research along with initial market feedback suggests that consumers are very excited with this launch.

The company is positioning Foodles on the health, taste and convenience plank. We are very proud of our multi-grain variant that has the goodness of rice, wheat, ragi and corn and Foodles is fortified with nine vital nutrients, says Sen. But will that be enough to take on Maggi noodles, an established market leader with a dominant market share, and sundry other big players? Sen says he believes the noodles foray is a winning proposition due to the credibility of a trusted brand. The company believes Foodles will capture more than a fair share of the incremental growth in the category and is targeting a 5 per cent share in the geographies it is already present in. Given the size of the opportunity, we believe this business segment will contribute a significant part of our business over a three to five year time horizon, says Sen. GSKCH says the noodles launch is a part of the companys three-level strategy to grow the brand. Sen says the company tackles the challenge at three levels first, investing in new science on the original Horlicks and keeping the promise relevant and the imagery contemporary; second, expanding the brands footprint into new health drink extensions where we tap consumer segments who may not be using the category (eg Junior Horlicks, Womens Horlicks, Mothers Horlicks, Asha, Horlicks Lite etc) and third, expanding the brand to new categories like cereal bars (Horlicks NutriBar), ChillDoodh, biscuits and now instant noodles. Purnendu Kumar, Associate Vice President, Technopak too believes that the company can be on the fast track on noodles. With Foodles, it will be targeting the same consumer (kids/mothers) as of Horlicks. And since the company has strong brand equity in this segment because of Horlicks, it wouldnt be difficult for it to get good volumes in Foodles. The companys strong distribution will help it achieve market share faster. Noodles comes a month after the launch of Asha, an affordable version of Horlicks, through which the company is targeting the price-sensitive mass consumer. Priced about 40 per cent cheaper than the mainstream brand, Horlicks is hoping Asha will open up an entirely new segment, as none of the big players have a similar product. Rural markets already contribute 30-35 per cent to GSKCHs sales. Analysts however are putting their bets more on Asha than on Foodles on the grounds that penetration of health drinks in rural/semiurban markets lags urban areas and thus there is a huge gap in these markets which Asha can fill. Its an open market as there is nobody in the affordable fortified drink segment at present. But here again the lack of awareness among rural mothers about health drinks is a challenge. Having achieved the right product at right price, we do face the obvious challenge of taking the message (awareness) and the product (availability) to the rural consumer. We are building awareness through van activation, street plays and tying up with MFIs - apart from the more conventional mass media, Sen says. The company is also beefing up its sales and distribution infrastructure.

GSK to invest Rs 300 crore in Horlicks relaunch

ET Bureau Sep 14, 2010, 12.59am IST Tags:
y y

Horlicks| GSK

NEW DELHI: Packaged consumer goods company GlaxoSmithKline Consumer Healthcare (GSKCH) on Monday said it would invest over Rs 300 crore on repositioning original milk food drink Horlicks as the company's umbrella brand. Apart from relaunching Horlicks with a new

look and promoting the brand across media, including the digital and mobile marketing space, GSK is also looking at foraying into other categories like breakfast and mid-day meals. Shubhajit Sen, E-VP (marketing) at GSK, told reporters that the company plans to achieve sales of Rs 300 crore over the next 18-24 months from its foods business. Recent category extensions of Horlicks, estimated to be a Rs 1,500-crore-plus brand, include biscuits, cereal bars and instant noodles. Mr Sen said Horlicks' Foodles instant noodles brand has been able to capture 5% share within six months of launch. "We would want one-fourth of our sales to come from new launches. The current share is close to 20%," he said. The 110-year-old health drink Horlicks has 51% share in the health-drinks category and along with Boost gives GSK control of over two-thirds market share. "There is a fundamental shift towards synergising all our marketing activities on Horlicks and bringing it under one platform across categories," Mr Sen added.

Brand Update : Horlicks

I was shocked to see an ad in todays newspaper announcing the launch of a noodles brand by

Horlicks.

I was wondering how can a company

like GSK mess up a power brand like Horlicksby launching a totally unrelated extension ?

Horlicks has launched a new extension in the noodles category . The extension has the brand name Foodles and is endorsed by Horlicks. Foodles is positioned as a healthy noodles. The brand has launched two variants of noodles. - Regular and Multi-grain The main USP of Foodles is the " Health Maker" sachet which comes along with the noodles pack. The health maker sachet contains the essentials of 5 vitamins.

Frankly , this is one brand extension which I cannot understand.Theoretically Foodles by Horlicks cannot be termed as a brand extension. In this case Foodles is the main brand and

Horlicks is the endorser brand. But for all practical purposes, Foodles is going to impact

Horlicks

just

like

any

other

brand

extension.

Horlicks off late has been on a extension spree. It recently launched the Nutribar snack bar with an aim of transforming Horlicks in to an umbrella brand for launching health related food products.

My first contact with Foodles happened last week when my wife tried to trick me with Foodles instead of Maggi. I hated the taste of it and wondered whether Maggi changed the taste of its noodles again. It is only then my wife revealed that she tried to make me eat " healthy " noodles.

What can be the possible logic behind Horlicks trying its hand into launching a noodles brand ?

One reason or argument can be that Horlicks is only an endorser brand . Once the brand is accepted in the market, Foodles can remain as a standalone brand.

If that is the logic, then has the marketers thought about the brand equity dilution of parent brand? Horlicks in no way can be associated with noodles category. Noodles is perceived to be unhealthy , junk food and by associating with this category, Horlicks is definitely going to dilute its core positioning of a health drink.

Secondly, why should a multinational giant like GSK launch a brand with an endorsement from its power brand ? What is restricting the company from launching a new standalone brand ? Only reason seems to be the lack of confidence of the marketer or the search of a short cut to market acceptance.

Has the company thought of the impact of Horlicks if Foodles fail ? If Foodles succeed, does it add value to Horlicks brand or will it dilute the core proposition of a health drink ? What is Horlicks now - a health drink for kids, health drink for adults, health drink for women, a snack brand, a biscuit brand and a noodles brand .... where is the connection.

Foodles is not going to revolutionize noodles market in India. All the noodles brands are now on the health plank and having a vitamin sachet is not going to do big things for Foodles.

Earlier, my students used to ask me about my favorite brand and I would tell them it is Horlicks because of the focus and smart marketing moves. Now I would say that Horlicks 'used' to be my favorite brand.

Labels: Brand Update, Food brands, Horlicks, marketing myopia, New Product Launch, product line extension, Snack Foods Save to del.icio.us Digg This! Stumble It!

GlaxoSmithKline launches Foodles from Horlicks

Published on: July 18, 2010 - 22:54

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Business

PANAJI: GlaxoSmithKline Consumer Healthcare has launched Foodles from Horlicks. These instant noodles feature a Healthmaker, which is fortified with 9 vital nutrients and is packed with the goodness of iron and calcium. Foodles from Horlicks is available in two options- Regular and Four-Grain. The Four-Grain variant is made with the nutritious grains -

rice, corn, ragi and wheat, said a press release.

Horlicks Foodles Nutrilicious Noodles

Glaxo Smithkline Consumer Healthcare, a Fast moving consumer goods (FMCG) company today announced its entry into the instant noodles segment. It has entered the market with the product named as Foodles under its already popular brand name Horlicks which acts as an endorsing brand for the product Foodles. This move of theirs seems to be a move to take on the might of Maggi from the stable of Nestle which is an out and out market leader in this segment with an overall market share of close to 70 percent. The Indian noodles market is estimated to be around ` 1,000 crore and has been growing at the rate of 25 per cent. We, believe that the overall entry of Horlicks will expand the category further, GSK Consumer Healthcare (GSKCH) India executive vice-president (marketing) Subhajit Sen said. The company aims to capture 5-10 per cent of the estimated ` 1,000-crore organised noodles market within a year. Source: Business Standard- Press Trust of India.

This new launch under the brand name Horlicks will help the companys Horlicks brand to grow the brand to even greater than ` 1500 crore and will help in sustaining the double digit growth that this brand has been registering year on year. And this launch of Foodles under Horlicks brand is going to extend this brands reach to newer segments also because of the very good brand equity that Horlicks as a brand has in the eyes of the consumers, which the company believes will help the company to gain its objective of attaining a market share of around 6 to 10 percent in the first year of its launch itself. GSKCH says the noodles launch is a part of the companys three-level strategy to grow the brand. Sen says the company tackles the challenge at three levels first, investing in new science on the original Horlicks and keeping the promise relevant and the imagery contemporary; second, expanding the brands footprint into new health drink extensions where we tap consumer segments who may not be using the category (eg Junior Horlicks, Womens Horlicks, Mothers Horlicks, Asha, Horlicks Lite etc) and third, expanding the brand to new categories like cereal bars (Horlicks NutriBar), ChillDoodh, biscuits and now instant noodles. Source: Business Standard: Seema Sindhu

Also, the company can get the benefit of the brand Horlicks which has got a positioning of offering products which are for the health conscious consumers like, the health drinks that Horlicks is offering, biscuits under the same brand name which they have positioned on the point that it has got power of calcium in every pack which is good for our bones, then a new health drink known as Horlicks Lite- which is basically for the health conscious adults and also is suitable for diabetic patients and this product has the positioning With zero added sugar and zero cholesterol and many others like, Nutribar, a nutrition drink for women, ready-to-drink flavoured milk dubbed Chill Dood and Horlicks Asha, a more affordable variant of the health drink etc. And now Foodles which has also been positioned on the same lines as having a good nutritious value and that has been made more credible with the help of the contents in the packed i.e. the taste maker( in case of maggi as it is called) is knows as Healthmaker which contains five essential vitamins in the sachet. This is the USP of Foodles which helps it differentiate from the others in the market. Though there would have been a risk of dilution of the positioning of Horlicks brand as it stands for health and this new segment that it has entered into is believed to be unhealthy and junk food segment, but it can stop the dilution because even foodles has been positioned as a healthy snack with its health maker having five vitamins as its contents. Subhajit Sen, executive vice-president for marketing, GSKCH, however, says pre-launch research along with initial market feedback suggests that consumers are very excited with this launch. The company is positioning Foodles on the health, taste and convenience plank. We are very proud of our multi-grain variant that has the goodness of rice, wheat, ragi and corn and Foodles is fortified with nine vital nutrients, says Sen. Source: Business Standard: Seema Sindhu GSKCH also said at present it is focusing on the South India, including Kerala, Andhra Pradesh, Tamil Nadu and Karnataka. It plans to introduce the product in the national capital and other northern states in the next six months to one year period. Source: Business Standard: Press Trust of India Horlicks, has had a long reign at the top in the health drink segment but this time around in the noodles segment, GSK is the challenger. Instant noodles were first introduced in the country by Nestl under brand name Maggi in 1984. Since then, many rivals have come and gone but Maggis rule has remained unshakable. But now Horlicks which is a David in this category now has decided to take on the Goliath of the noodles market. Horlicks Foodles is GSKs attempt to get a share of this pie. Not just Nestls Maggi, it has to contend with Hindustan Unilever which has entered the instant noodles snacking segment for the second time with Knorr Soupy Noodles. And to take on Maggi in its stronghold the Foodles has not taken it on front on but by positioning itself away from the positioning being used by Maggi and focusing on the nutrition which is also their forte as believed by consumers also in the case of health drinks being offered by them. And to further bolster this fact Horlicks has tactically made it a point to tag the packs with the respective flavours and ingredients very clearly. But isnt it too late? Maggi repositioned itself as a healthier snack option some years ago when it introduced rice and atta noodles, and adopted the tagline, Taste bhi, health bhi (Taste as well as health). But the contribution of these variants to its total turnover remains small. Source: -Business Standard Sayantani Kar And to further strengthen this positioning it is charging ` 15 for a pack of 80 grams as compared to Maggis price tag of ` 10 for a pack of same weight and by doing this trying to tell the consumers that they are charging a higher price because they are offering a highly nutricious product and not a normal noodle as is being offered by other competitors.

Further the communications that it has been using to promote the product also seems to spread this message through TV or Print ads that the kids eating normal noodles are not doing right as the mothers are shown fighting with their kids regarding their demand to have noodles and then suddenly the earth breaks up and Foodles comes out as an avatar to provide a solution to this fight between mothers and their kids. The best thing that I found out in this ad is the statement being used to describe foodles as Noodles without the No. To watch this ad click here: http://www.youtube.com/watch?v=Vbopct0dkvQ&feature=player_embedded#!

SWOT Analysis of Foodles: -

Foodles Decoded
Strength Legacy of horlicks in wellness, large distribution network Lack of experience in the segment, lesser traction in North and West Market growing in double digits, instant noodles widely accepted as snack food Category hinges on subjective taste, market monopolized by Nestles Maggi, Hisdustan Unilevel also wants a slice of the pie

Weakness

Opportunity

Threat

Source: -Business Standard: -Sayantani Kar Now lets try and analyse the marketing strategy being adopted by Horlicks which is a challenger to the Brand Maggi in noodles segment. It has become an adapter to the noodles category that has been created by maggi and has then launched a very different version of the product being offered by Maggi, i.e. a noodles that are considered healthy because the contents of the noodles contain at the most 4 different grains and even the taste maker or the healthmaker as it is called in the case of foodles contains vitamins in its overall composition. It has tried to position its product by getting noticed through an unusual advertisement to separate itself from the general noodles category and position it as a healthy noodles proposition for the consumers. They had used the frontal attack strategy where they have attacked Maggi the market leader and all the other players in this category by showing them as unwanted by mothers and then positioning themselves as an alternative to this problem, and then trying to strengthen this position with the help of every media possible. You can say that they are trying to challenge the status quo that exists in the noodles market and trying to define a niche for itself as a healthy alternative even in the noodles segment, which even maggi had realized a few years ago and so it launched the Atta and vegetables to their stable, but this further strengthens the fact to a very minute extent that normal maggi atleast is not that healthy an alternative so it itself also had to launch its atta and vegetable versions of maggi itself and Horlicks in that terms can be considered to be the first player to which has entered the market itself with a healthy snack positioning which is complementary for it as Horlicks the endorser brand itself supports this characteristic.

So now let s wait and watch how this new avatar from the stable of Horlicks (GSK) performs in the market and whether it is able to help the company realize its objectives in the long run.

-Successfully launched in South & East of India -is now available in your city too New delhi, July 16, 2010: Are your kids finicky about the food they eat? Do you often have food fights with your kids? So, if you are looking for some tasty snacking options, which are also nourishing, breathe a sigh of relief as GlaxoSmithKline Consumer Healthcare has launched Foodles from Horlicks. These instant noodles feature a Healthmaker, which is fortified with 9 vital nutrients and is packed with the goodness of iron and calcium. from Horlicks is available in two optionsRegular and Four-Grain. The Four- Grain variant is made with the nutritious grains -rice, corn, ragi and wheat. The two packs are priced at Rs.10/- and Rs.15/- for 80gm respectively. Each variant is available in three lip smacking flavors. The regular pack comes in flavors like Must Masala, Crazy Curry and Spicy Treat whereas the four grain pack is available in Ala Masala, Curry in a Hurry and Slice of Spice. Foodles from Horlicks is the new, convenient and nourishing snacking option that your kids will love.