Nearly 145 years ago, brothers John and William Horlick from Gloucestershire, in south west England, developed a malted milk drink which the world would soon come to know and love as Horlicks. Legendary explorers like Roald Amundsen and Richard Byrd took the drink to the farthest corners of the world as Horlicks became an important provision for expeditions to the North Pole and the South Pole. Byrd even named a mountain range on the Ross Ice Shelf after the beverage. Yet, perhaps, nowhere has the drink been loved more than in India.
Horlicks arrived here during the First World War and quickly became a popular family drink across the well-to-do families of the erstwhile Punjab, Bombay, and Madras presidencies. India remains the one market where Horlicks’ popularity remains unchallenged.
According to market research provider Euromonitor International, Horlicks has a 42.8% market share in the malt-based beverages segment. Bournvita, owned by Mondelez International, comes in a distant second with 12.6% market share.
But the popular beverage could soon be up for sale. Its current owner, GlaxoSmithKline (GSK), recently announced that it has reached an agreement with Novartis to buy out the latter’s stake in their global consumer healthcare joint venture for $13 billion. In the same announcement, GSK announced that it is undertaking a strategic review of Horlicks and other consumer healthcare nutrition products like Boost.
The business generated £550 million in 2017 and roughly 80% of the sales came from India. GSK’s 72.5% holding in GlaxoSmithKline Consumer Healthcare, the company which sells these products here, is also on the block. It is a move that analysts and brand consultants see as positive for the Horlicks brand.
“Horlicks is a heritage brand it has a deep connection with generations of customers in India. Reinventing that is a big opportunity and the new owner will need to focus on reinventing the magic,” says Harish Bijoor, brand expert and founder of Harish Bijoor Consults.
More important, Bijoor and Ankur Bisen, senior vice president, retail & consumer products, Technopak, say that Horlicks could thrive if it goes to a consumer goods company. GSK is largely a pharmaceuticals giant. “What has happened in the GSK portfolio is that Horlicks has emerged as a platform for nutrition that behaves more like a food brand rather than a pharma brand,” says Bisen.
He elaborates, saying that the Horlicks brand has been successfully expanded to include biscuits. That, he says, “shows how it’s capable of surviving as a food brand”. GSK’s focus on pharmaceuticals and pharma research is not ideal for the growth of a food brand, he adds.
Meanwhile, analysts see no lack of buyers for this legacy brand. “Packaged foods is an exciting space and GSK has strong brands which are likely to attract interest from potential buyers…We also believe the brands Horlicks and Boost have been under-leveraged,” brokerage firm CLSA said in a recent note. It will take a few months for a buyer to be finalised.
Clearly, though Horlicks over time has disappeared from our television screens and billboards, the hunger for the brand is thriving.