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Is the race for Horlicks almost over? Unilever emerges as the frontrunner for beloved malted milk br

Zoom in font  Zoom out font Published: 2018-11-29  Views: 8
Core Tip: British-Dutch transnational consumer goods company Unilever is emerging as the frontrunner in the race to snap up malted milk hot drink brand Horlicks.
British-Dutch transnational consumer goods company Unilever is emerging as the frontrunner in the race to snap up malted milk hot drink brand Horlicks. Previously, Nestlé and Unilever were reportedly vying for GlaxoSmithKline Plc’s nutrition business after months of speculation over who will take on the “much-loved” brand with a history that goes back more than a century. Now, Unilever is being named as being in exclusive talks, according to media reports.

Finalizing the deal could be just around the corner. GSK has previously said the outcome is expected by the end of this year.

The race for Horlicks was previously thought to also include another suitor, Coca-Cola, which was believed to be looking into expanding in emerging markets as US growth slowed. At one point, Kraft Heinz was also thought to be an interested party, but now it’s reportedly just down to Unilever who is believed to be in talks which should be coming to a head very soon.

According to a Reuters report, the auction for the assets – including Horlicks and the chocolate flavored drink sold in India and produced by GSK, Boost – could reach up to US$4 billion. However, there are no confirmed reports from any of the companies thought to be involved in the negotiations. GSK also remains tip-lipped on the subject. NutritionInsight has reached out requesting more information but was told: “GSK is not commenting on these reports.”

GSK owns a 72.5 percent stake in the business, GlaxoSmithKline Consumer Healthcare Ltd which is listed on the Indian stock exchange. India is considered one of the most important emerging markets with large companies like Unilever wanting to strengthen their positions in the South Asian nation.

As part of a major UK review last July, GSK announced it was making strategic decisions concerning its consumer healthcare business and pharmaceuticals, including options to divest some nutrition brands and its intention to sell its Horlicks brand in the UK.

By March this year, GSK reached an agreement with Novartis for the buyout of Novartis’ 36.5 percent stake in their Consumer Healthcare Joint Venture for US$13 billion.

Long-established Horlicks, which is sold through GSK’s Indian subsidiary, has a solid track record. Speaking during a press conference call held earlier this year, GSK CEO Emma Walmsley, stressed that India remains a priority market for GSK, a key location for growth opportunities. Walmsley also described Horlicks as “absolutely extraordinary brand with more than a century of history in India.”

“It’s much-loved,” she said. “India remains a priority market for this company, whether that be for our non-nutrition brands where we still see an opportunity for growth, and also particularly for pharma and vaccines. It’s absolutely critical for all of our Indian businesses and partners to understand how invested we are in the market’s potential.”

“We expect to get to an outcome by the end of 2018,” she said.

Long history
Dating back to 1873, Horlicks was founded in Chicago by two British men, James & William Horlick. It was taken to India as a dietary supplement by First World War soldiers who had fought alongside the British. In the early 20th century it was sold as a powdered meal replacement drink mix. It’s now marketed as a nutritional supplement.

The formulation can vary in different countries, however, ingredients include wheat flour, malt extract, malted barley, milk solids, sugar, minerals, salt, vitamins and protein isolate.

It remains a very popular choice and does still dominate the health-drinks market in India, but consumers, particularly the urban-based millennial population, are shifting their preferences to less sugary, healthier alternative beverages.
 
 
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