Not just Nestle’s Milo, GSK’s Horlicks will now have to fight Danone’s Protinex Grow
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New Delhi: The health food drink market in India is suddenly getting attention from multinationals.
Within two weeks after Swiss packaged food company Nestle India Ltd relaunched Milo in a ready-to-drink format, the local unit of French multinational Danone SA, on Tuesday said the company is entering the market with its health drink Protinex Grow.
This is unusual for a market that has not seen much action since the 1960s. India’s most-selling malt-based health drink Horlicks, a product sold by GSK Consumer Healthcare Ltd, was brought to India by the British towards the end of World War-II as a dietary supplement. Soon it became popular and is still the market leader. It competes with Complan (sold by GSK to Heinz), Boost, Viva and Maltova. While Bournvita, a malt-based drink Cadbury (now Mondelez International Inc.) launched in India in 1948, Nestle tried to tap the market with Milo in 1996 but withdrew the product from Indian market about a decade ago.
Both Nestle and Danone have been eyeing growth on the health plank. According to Rodrigo Lima, managing director, Danone India Pvt Ltd, the company is betting on health and nutrition to double revenue by 2020. The company will launch 10 products in health and nutrition segment in 2017 only, he said. Danone will launch Protinex Grow in West Bengal and Karnataka in the first phase as the two states together account for about 22% of the market, it said in a statement.
Nestle India chairman and managing director Suresh Narayanan has repeatedly said that the Swiss firm has been working on building healthcare, nutrition and fortification as categories that would ensure the company’s growth in India.
India’s malt-based drink market was estimated at $1.1 billion (retail sales) in 2015, according to a study by research firm Euromonitor International. This was about 41% of the global market, which is projected to grow to 47% by 2020, said the Euromonitor study.
“The market for health food and beverages, nutraceuticals and fortified food beverages in India is growing faster than any other market. However, ready-to-drink beverages are getting better traction and will grow much faster in the coming days. Health and nutrition will be the growth driver for some companies,” said Rajat Wahi, partner and head (consumer markets), at consulting firm KPMG in India.
In the past year, the market has seen companies like yoga-guru Baba Ramdev’s Patanjali Ayurved Ltd pushing its health drink powder Powervita and Sri Sri Ravisharkar launching Ojasvita in the health food drink segment. “It is a good strategy to launch ready-to-drink formats and low sugar products (like Nestle’s Milo) as the powder format is already very competitive and hardly seeing volume growth for the past 8 quarters,” said Abneesh Roy, analyst with Edelweiss Securities Ltd.
Horlicks maker GSK Consumer Healthcare, in its results statement for the quarter ended 31 December 2016, said that the company’s market share in the health drinks segment grew by 0.6% during the quarter, while the category grew by 0.8% between January and September. “Market share for GSK Consumer healthcare has grown in volume at 66.4% (up by 1 percentage point) and value at 58.3% (up by 0.5 percentage point),” GSK said in its statement.