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Glaxo cooking up instant noodle product

Glaxo cooking up instant noodle product
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First Published: Thu, Feb 04 2010. 12 01 AM IST

Photo: Rajkumar; graphic: Paras Jain/Mint
Photo: Rajkumar; graphic: Paras Jain/Mint
Updated: Thu, Feb 04 2010. 12 01 AM IST
New Delhi: The Rs1,000 crore market for packaged noodles in India is set to see increased competition with GlaxoSmithKline Consumer Healthcare Ltd (GSKCH) introducing an instant noodle product.
In December, the company had test marketed Foodles, its brand of packaged noodles, and plans to sell it across the country in 6-18 months to test the dominance of Nestle India Ltd’s Maggi noodles.
This is part of GSKCH’s strategy to explore the salty snacks market, a company executive said. The firm sells products under the popular Horlicks brand.
Photo: Rajkumar; graphic: Paras Jain/Mint
“Foodles is going to be a test case for us,” said Shubhajit Sen, executive vice-president (marketing) at GSKCH. “Having seen the response so far, we are hoping the product to be a success, which will give us a platform to consider launching more products in this segment.”
Sen said his company is targeting a 5% share of the instant noodles market in 6-12 months.
An expert said there are good chances for the company to establish its brands as the salty snacks category is growing rapidly in India.
“But the success would depend on how they offer, they position the products and what value proposition they offer,” said Anand Shah, an analyst with local brokerage Angel Broking Ltd.
GSKCH launched about 10 new products, including variants and new launches, last year such as Horlicks biscuits, Horlicks Nutribar, Horlicks Asha, a more affordable variant of the health drink, and ready-to-drink flavoured milk dubbed Chill Dood.
Most of these products, including Foodles, have been developed in India, Sen said.
GSKCH is also aligning its products portfolio with it parent given the increasing importance of the Indian market. “India is the third largest market for the company globally,” Sen said. “The country contributes about 70-75% to the total turnover of the Horlicks brand.”
Last week, the company started test marketing its global toothpaste brand Sensodyne in southern India. It also introduced its sports drink Lucozade during the Mumbai Marathon in January this year.
“We are crunching in the last 24 months what we should have done in last 24 years,” Sen said, pointing to the increased frequency of new innovations and launches.
The new launches are crucial. “If we can get half our growth every year from new products, then by 2012-13, when our innovations stabilize, 25% of our business should come from product launches that have happened in the last three years,” he added.
At present, more than 65% of GSKCH’s revenue comes from Horlicks health drink that has a strong presence in southern and eastern India.
“The company has become lot more adventurous and this is good as it flanks competition in new categories while its base growth comes from its core categories,” said Anand Ramanathan, an analyst with audit and consulting firm KPMG Advisory Services.
For the quarter ended 31 December, the company had posted a 26.1% increase in net sales at Rs418.1 crore, aided by a volume growth of 16%. Net profit grew 3.4% to Rs33.7crore.
vijaya.r@livemint.com
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First Published: Thu, Feb 04 2010. 12 01 AM IST
More Topics: Glaxo | Foodles | Noodle | Food | Maggi |