Health Drink RevolutionThe Race Begins

AKSHAY SHROTRIYA

India’s Health Obsession Reasons behind a growing inclination of Indian consumers towards

healthier food and beverages -

High level of consumerism backed by rising income levels (~$400 in 2001 to ~$1100 currently) (Health accounted for ~10% of household expense & is risiing)

Exposure to wide product offerings in developed markets Higher rate of urbanization (27% in 2001 to 31% in 2011) Rising health issues owing to changing lifestyles Aggressive marketing by health food and beverages brands Rising concerns among consumers about efficacy of traditional

foods Two faced nutritional problems – one due to excess and other from

deficiency

Health Food Market Functional foods(combinations of all types of health foods) seen as an

effective measure to arrest the growing nutritional deficiency problems

The concept of functional foods was coined by Japanese scientists relating four essential pillars – nutrition, sensory satisfaction, fortification and modulation of physiological systems

India’s definition of functional foods based on FSSA is a broad spectrum that clubs the foods for special dietary uses, the functional foods, the nutraceuticals and the health supplements together

Health and Wellness Foods market estimated at 10000 crores in 2012 and expected to grow to 55000 crores by 2015 at a CAGR of 33%

FSSA – Food Safety and Standards Act, 2006

(India)

As per FSSA,

Functional foods

Includes powders,granules, tablets, capsules

Health-drinks Divided into two categories – White powders (Horlicks, Complan etc)

and Brown powders (Bournvita, Boost etc)

Health drink powders consumed as milk substitute & nutrient boosters

India’s Health-drinks market pegged at around 4000 crores (90000 tonnes) and expected to reach approximately 8000 crores by 2016

India is world’s largest malt-based drinks market with a share of almost 22% in the world’s total retail volume(Malt is germinated cereal grains that have been dried in a process known as malting)

White Powders ~65%

Brown Powders ~35%

Warring Factions GlaxoSmithKline

Horlicks Boost

Kraft-Cadbury (Mondelez International) Bournivita

Heinz Complan

Amul Nutramul Pro

Market-share of Major BrandsHorlicks – 51 %

Bournvita – 16.2%Complan – 13.9%

Boost – 12 %

Brand Trust Ratings by Trust Research Advisory

The Bull’s Eye Horlicks

Tagline : Proven for making kids taller, stronger and sharper Target Group : Kids aged 5-15 years and Mothers (Communication) Positioning : A nutritional supplement that positively enhances

physical and mental growth of kids USP : Huge emphasis on the “proven” efficacy for child’s mental &

physical growth on the basis of results from a series of researches

Boost Tagline : Boost is the secret of winning energy Target Group : Children and adults looking for an energy drink Positioning : Always positioned as an energy drink hence the tagline. It is

promoted as being the only HFD proven to increase stamina by three times

USP : Strong Sportsmen endorsements(Kapil Dev, Sachin Tendulkar, Virender Sehwag, MS Dhoni) leading to brand following by kids

The Bull’s Eye Bournvita

Tagline : Tayyari jeet ki (preparing to win) Target Group : Children aged 5-15 years & Mothers ( For Communication) Positioning : Help kids to grow faster and enhances goodness of milk(Calcium) USP : Strong advertising and taste appeals most in the category to the TG

Complan (COMplete PLANned) Tagline : Extra growing power with Complan Target Group : Children aged 5-15 years & Mothers ( For Communication) Positioning : Help kids to grow taller at twice the rate USP : Backs its ‘tall’ claims by multiple researches

Claims (Product and Benefits) Horlicks :

27 vital nutrients – Proteins, Multi-vitamins and DHA ‘Nutrisorb’ technology – Makes nutrients easily absorbable(& more

effective)

Boost : EnVita Nutrients – Systematic combination of vitamins and minerals

important for energy metabolism and hence increasing stamina

Claims (Product and Benefits)

Bournvita : Enriched with vitamins that help in children’s physical and mental

growth High on vitamin D which enriches goodness of milk (calcium and

other nutrients) High on whey protein content

Complan : 34 vital nutrients (including iron, iodine and essential fatty acids) Includes 100% milk protein for better growth of kids Almost 52% milk solids making it extremely helpful for growing kids

Major Research Claims by Brands Complan

“…Benefits proven through an independent study conducted in 2008 for 12 months on the children with age-group 7-12 years in Coimbatore…”

Bournivta “…Research shows that lack of Vitamin D makes the nutrients of milk weak

and hence Bournvita with its essential nutrition enhances goodness of milk (Calcium)….”

Horlicks “..boiling of milk robs it of almost 25% of its nutrient value..” “…benefits proven with the help of a study conducted by NIN, Hyderabad

on micronutrient enriched beverages on 869 school children…”

Truth vs Hype Complan

Calcium, Niacin and Protein value below the declared value Calcium and Fat content found to be below the declared value

Bournivita Niacin content below declared value Niacin content below declared value

* Results based on consumer voice report July 2013 released by Department of Consumer Affairs, GoI

Truth vs Hype Boost

Iron content found to be least among the competing brands Niacin value found lower than declared

Horlicks Niacin value found to be maximum among the competing brands Calcium and Fat content found to be below the declared value

* Results based on consumer voice report July 2013 released by Department of Consumer Affairs, GoI

The Path Ahead Indian HFD market is a growth market with

tremendous opportunities (Check graph)

India has one of the youngest population in the world making it a long-term HFD market (TG)

Still considered as one of the growth markets in terms of rising income reinforcing the long-term prospects

Rising awareness among consumers due to exposure to developed markets (More people than ever travelling abroad, foreign TV channels, global offerings) adds to TG everyday

Due to foreign origin of most of the HFD products(mostly developed markets) which have stricter laws related to food safety, the products don’t need much tweaking(& expenses) in that aspect

Market Size in crores

0

1000

2000

3000

4000

5000

6000

7000

8000

2006 2013 2016*

Consumer Behaviour Consumers attitudes regarding HFD purchase is largely influenced by

quality attributes of the product

No direct relation between brands and their sensory perceptions

Price, quality attributes and sensory perceptions are three major factors that makes a brand in the eyes of consumer better than other

Value for money(Nourishment vs price), price and packaging are ranked in the same order for influencing purchase decision

Brand loyalty stands out as a very significant factor in HFD purchase Mostly consumers will wait for their brand in case its not available at

the time of purchase instead of buying another brand

Need Recognition

Information Search (low)

Evaluation of Alternatives

Purchase

Post-purchase

Evaluation

Cognitive Dissonanc

eBrand Loyalty

Age segments Biggest TG is the age group of 5-15 years in

terms of products offered to each TG

Other segments have exactly same number of products offered for them (Of the brands considered in this analysis)

Horlicks is present in four out of five segments while Bournivita covers three segments by its offerings

Complan, Boost and Maltova covers one segment each

15%

15%

38%

15%

15%

Share of products offered in each age group

1-3 years4-6 years5-15 yearsAbove 15 yearsAbove 25 years

Brand Benefits Segments

HFD as Energy drinks and source of essential nutrients (specific to TG, eg. Toddlers, Mothers etc) is most common positioning adopted by brands(25%)

Equal number of products offer benefits related to physical and mental growth (19% each)

Recently Horlciks and Bournivita in particular have also adopted a new proposition where they promise to enrich and strengthen the nutrient value of milk. With only 12% of considered brands adopting this positioning it holds the last position

25%

19%19%

25%

13%

Share of products offering based on benefits promised

Essential NutrientsPhysical GrowthMental GrowthEnergyEnrich milk

Key Success Factors in HFD Market Strong market and consumer behaviour understanding to gauge consumer

expectations and market offerings ( Gap Analysis) Unique, clear and relevant brand proposition to the consumers Sensory appeal is very significant since end-consumers are kids who are

fussy about taste and flavours Clear distinction between communication for kids and mothers since both

are significant players in purchase decision and require different satisfaction points to finalize on a product and purchase

Competitive pricing since price and value for money are important attributes in purchase decision for HFDs and it is very important to remain affordable yet attractive to consumers

Backed by strong distributions system and feedback mechanism to ensure availability and a connect between brand and consumers

References

Consumer Voice Report July 2013 , Department of Consumer Affairs Functional Foods: Marketing ‘Health’ To Modern India(Manish Sharma and

Shweta Garg) Customers' Behavior in Health Food Drink Product Category (Dharmesh

Motwani and Khushbu Agarwal) News Releases from Leading Newspapers and Magazines

Times of India Economic Times Business Line The Hindu

Thank you