Sandeep Goyal
Dec 10, 2018

Blog: To Leverise Horlicks or to Leverage it?

The acquisition of Horlicks by consumer goods giant, Unilever is a landmark moment in the history of the brand. Will Hindustan Unilever, which has traditionally struggled with its foods business in India, be able to leverage the brand?

Blog: To Leverise Horlicks or to Leverage it?
Horlicks is now a brother brand to Brooke Bond, Lipton, Surf, Clinic, Close Up, Lux, Pears, Liril, Dove, Fair & Lovely and Lakmé, not counting many many more in the Unilever stable. It leads the crossover of Boost, Maltova and Viva, accompanied by Sensodyne, Eno and Crocin from Glaxo Smith Kline to the Dutch giant. The 140-years old Horlicks dominates the malt-based hot drinks market in India with a commanding 42.8% share (off trade volume), followed by Mondelez International’s Cadbury Bournvita with 12.6%, and Boost at 10.6%.  
Horlicks began its journey from Gloucestershire in England in 1869, but it was 1873 by when brothers William and James set up J&W Horlicks in Chicago, and called their malted milk drink ‘Diastoid’. They started to advertise it as ‘Horlick’s Infant and Invalids Food’ and soon added ‘aged and travelers’ to the label. In 1883, US patent no. 278,967 was granted to William for the first ‘malted milk drink mixing powder with hot water’. By 1909-10, Horlicks had become popular as a provision for North Pole and South Pole expeditions led by Robert Peary, Roald Amundsen and Robert Falcon Scott, and this extensive (and somewhat specialized use) of Horlicks earned James the title of a British baronet! What most people would not even know is that in the early 20th century, Horlicks was sold as a powdered meal replacement drink mix. However, the fortunes of Horlicks soared in 1931 with the ‘Night Starvation’ story was developed in the UK to promote it as a ‘bedtime drink’ and it became a kind of national habit in England thereafter.
It would be the 1960s by when Horlicks would move from being a bedtime comforter to a drink for the aged and for convalescents. Somehow, in its home country, Horlicks despite many many efforts could never find a place on the breakfast table. 
In the 1930s, across the Atlantic, Horlicks milky-chocolate-flavoured disks in paper packets, which were eaten as candy, were marketed in the USA via radio commercials touting the ease with which they could be taken to school by children. Horlicks Tablets were sold therefore more as a candy, offered in a glass bottle resembling an aspirin jar than the form in which we see and know Horlicks today. In World War II the tablets were supplied to US, UK and other troops as an energy boosting treat, and included in lifeboat and life-raft rations, and aircrew escape kits.
Horlicks came to India with the British Army. The end of World War I saw Indian soldiers of the British Indian Army bringing back Horlicks with them as a dietary supplement. Punjab, Bengal and Madras Presidencies became early adopters of Horlicks and many well-to-do Indians took to drinking Horlicks as a family drink in the early 1940s and 1950s. It became a sort of status symbol amongst upper middle class Indians and rich landed classes to imbibe Horlicks over breakfast. A good, nutritious way to begin the day. And, a good lifelong habit to get into. The first flavour available in India, as in Britain, was malt. The one big difference however was that most Indians started to add Horlicks to milk rather than hot water. Also, Horlicks in India was made from cow milk rather than buffalo milk like elsewhere in the world.
With such a long and storied history, and with the very very deep pockets of goodwill that Horlicks has enjoyed in this country for over a century, it should be easy for Unilever to ‘leverage’ the brand to much much greater advantage. Not that it has not been tried by Horlicks brand managers in the past. Horlicks has been the favorite morning cuppa for generations now in Bengali and Tamil families. The debate has continued on whether to consume Horlicks in milk or with hot water. Whether to drink it or to ‘eat it’ (remember the Horlicks commercial from the early 1980s starring Moon Moon Sen where a little boy famously says, “Mummy to pilati hain, mein to aise hi khata hoon” and spoons the soggy sediment of Horlicks at the base of the glass into his mouth) has always remained a moot question. But either which way, Horlicks has been ‘The Great Nourisher’ to millions of Indian families for years and years. But since the brand was more a favorite of the East and the South, many marketing and product development efforts have been made over the years to grow and expand the customer base (and geographies) of Horlicks. 
  • While the traditional Classic variant remains the leader by far, to attract customers in the North, Horlicks launched the Elaichi flavor in the 1980s. It is today the second best variant in the Horlicks portfolio. 
  • Horlicks’ biggest competitor was always Bournvita (not Complan as most industry watchers believe). HMM launched Boost in 1975 to attack the chocolate flavoured market of the North and West (this category is more commonly called the brown MFD) and take on Bournvita. While Boost built up its brand franchise with Kapil Dev and Sachin Tendulkar in the mid 80s to the early 90s, it was felt that Horlicks in itself could take on Bournvita. Hence was launched Chocolate Horlicks in the late 80s. The variant has performed decently over the years. 
  • The Kesar Badam variant was obviously launched to take on the growing popularity of Chywanprash as a segment. Has been a lukewarm performer. 
  • Horlicks has over the years launched Juniors for toddlers, a Mother’s variant for breast-feeding moms, a bones-nutrition specialist for Women, tried a Protein+ for young adults, a Lite version for adults and has dabbled with Horlicks Growth+ and Horlicks Cardia+ to bring in more focused offerings.
  • Horlicks biscuits were launched in the late 1980s. The ‘experts’ ad went on air in 1989. The goodness of Horlicks made available in a more convenient any-time take-away avatar. A lot of research, consumer understanding and category knowledge as invested into the launch. The new diversification was looked at as a major step forward for the brand. Initial off-takes were good but the biscuits never really managed to carve out any decent or visible market share versus category leaders Parle or Britannia. Also, nutritional biscuits, as well as digestive biscuits, as a category is almost non-existent in India. So, volumes were a struggle. Hence, Horlicks tried to enter the creams category within biscuits but failed miserably. 
  • The 2009 launch of Horlicks Nutribar also met with very little success and to all accounts was withdrawn from the market in 2013. A weak attempt to launch flavored milk under the Horlicks banner around the same time resulted in disaster and the product line was shuttered. 
  • 2011 saw the launch of Horlicks Oats. In keeping with the mother brand’s equity in health and nutrition (and aided by the Horlicks Nutrition Academy), the oats were positioned as a healthy breakfast option for today’s fast-paced life and came with a ‘3-Way Health Advantage’ that helped manage weight, manage blood pressure and help reduce cholesterol. The oats range is still struggling. 
All of the above brand history points to the fact that ‘leveraging’ Horlicks is not easy. It suffers from the same problem as faced by other monolithic brands that can extend to closely related categories but find it extremely difficult to crack segments with different product codes. Horlicks has remained obsessed with serious health attributes, driven by the core values of its malt drink. Getting into casual snacking categories and other not-so-serious product lines somehow does not come naturally to Horlicks. 
Against this background, it would be interesting to see what the ‘leverisation’ of Horlicks could lead to. Hindustan Unilever has succeeded in reigniting many an old brand from within its portfolio. Lifebuoy and Pears for instance, have been successfully expanded into hand sanitisers and face wash despite the core brand representing bathing soaps for ages. Similarly Lux has successfully extended itself into the women’s deo market. ‘Leverisation’ to me is the understanding that the 118-years old Lux brand needed not to target the antiperspirant category which is a small fringe in India, but to go after the fragrance category which is far larger as an opportunity.
The stated priority of Unilever’s food and refreshment division was recently articulated by their global team as, “… to grow our presence in emerging markets, to modernize the portfolio and to continue to build growth in alternative channels such as food service and out-of-home impulse occasions”. The attempt to “modernize” the portfolio actually centres on efforts to respond to consumer needs in fast-growing segments such as free-from, vegan, health and wellness. This new philosophy has already been translated into newer playing fields for brands like Knorr which launched a range of natural mini meals and organic meal starters in as many as 11 countries across Europe and North America earlier this year. All of this is good stuff, but not really ‘leverisation’. 
‘Leverisation’ is the Shakti initiative of HUL which by 2015 had grown to 70,000 sales agents serving 165,000 Indian villages, with each of the sales agent equipped with a smartphone app to help manage inventory and other aspects of the business. ‘Leverisation’ is the creation of Guddi Bajis (good sisters) in Pakistan where hundreds of village women were trained as beauticians working out of their own homes. ‘Leverisation’ is the transformation of distribution in Philippines by creating a new layer of sub-distributers who could more effectively service a million mom-and-pop sari-sari stores. Similarly, ‘Leverisation’ is the creation of ‘blue star’ stores in Thailand that even have community washing machines to cater to a more aware rural audience. ‘Leverisation’ is also the ideation and launch of Kan Khajura Tesan by HUL to harness the reach and impact of mobile in rural India. But the pinnacle of ‘Leverisation’ is the Unilever expertise in creating consumption opportunities and apertures through the use of low-cost, single-use packs or sachets … HUL alone sells about 30 billion sachets a year, mostly in rural India and to India’s urban poor. 
To leverage Horlicks or to leverise it? Only time will tell. HUL has traditionally never really succeeded in its food business, quite as well as its other lines of business. The entry of Horlicks (and Boost and Maltova and Viva) could well be the turning point for Unilever in the food business in India. Horlicks is a legendary brand. It is not just loved; it is trusted. In fact trusted for more than a hundred years, and with good will across generations. The Great Nourisher is a motherhood brand, perhaps deeper and far far more entrenched in the homes and hearts of consumers than any of Unilever’s ‘power’ brands. The change of ownership should not dilute or alter the DNA of Horlicks. The magic will be to continue to build on that DNA and concurrently usher in growth through contemporising the brand. 
(Dr. Sandeep Goyal worked on the Horlicks brand from 1986 to 1989 as an account executive at what was HTA in those days.)  


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