New Delhi: The company behind the iconic Amrutanjan, India’s balm version of Tylenol, has developed an appetite: for food. Amrutanjan Health Care Ltd said it is scouting for an acquisition to get into the food business by mid-2009.
“Food is one of the fastest growing segment in the country at the moment. And being a fast-moving consumer goods company, it makes sense for us to be there,” said Manoj Nair, deputy general manager of the company. “We are evaluating various options at the moment including acquisitions and developing core competencies ourselves. Any development on that front is expected by July-August next year.”
Nair declined to elaborate.
In Amrutanjan’s case, leveraging its deep brand goodwill in pain relief into a successful entry into food will be tricky even if it chooses to stay away from the flagship brand name for its food offerings.
The “foods industry is definitely promising, but it is not easy to break into it,” notes Anand Shah, an analyst at Mumbai-based brokerage firm Angel Broking Ltd.
Even as it pursues a food acquisition, Amrutanjan Health Care is also looking to strengthen its core brand. “We want to position brand-Amrutanjan beyond a pain balm,” said Nair. “Starting March next year, most of our products in the home care, skin care and cough and cold category would see a makeover in terms of packaging and marketing. There would also be new product launches into thesecategories.”
The company recently launched a Rs6 crore national campaign, dubbed Be-Ready, for Amrutanjan balm aimed at increasing market share by 3-5%.
“Amrutanjan balm’s presence is strongest in south India with 60-65 % market share and a fair presence in the East, but not very established in the West and the North. The makeover and new marketing initiative is expected to build a national brand,” Nair said.
According to market researcher AC Nielsen, the annual, so-called rubefacient market in India is estimated at Rs900 crore and growing at 9-10% each year. Amrutanjan Health Care posted net sales of Rs74.5 crore in 2007-8 with the quarter ended 30 September seeing sales of Rs23.3 crore.
According to Nair, the company’s marketing budget, estimated 12-13% of sales, will go up to 17% in 2009. “We are also thinking at celebrity endorsements as it is important for brand building of products.”