As Zydus Cadila’s arm agrees to buy Heinz’s India business for ₹4,595 crore, the attention now shifts to GlaxoSmithKline Consumer’s Horlicks deal.

GlaxoSmithKline, the UK pharmaceutical giant, is looking to sell a part or all of its 72.5 per cent stake in its Indian subsidiary, GlaxoSmithKline Consumer Healthcare. It started a review this March. Potential bidders include PepsiCo, General Mills and Kellogg, apart from the main contenders Unilever, Nestle and Coca-Cola.

Analysts tracking the sector point out that global majors are in pursuit of GlaxoSmithKline’s consumer nutrition business for several reasons, but the hot chase is for malted milk brand Horlicks. The latter is expected to drive marketshare for the buyer, as it currently dominates the malt-based drinks market in India.

Apart from GSK Consumer Healthcare’s Horlicks, the malted drink market in India is majorly governed by Mondelez International’s Bournvita and Complan acquired by Zydus Cadila from Heinz.

Malted drinks

American food company Kraft Heinz was also mulling an exit along the lines of GSK from the malted drinks category.

On Wednesday, Kraft Heinz signed an agreement to sell 100 per cent of its equity shares in Heinz India to Zydus Wellness and Cadila Healthcare.

Analysts expect GSK’s Horlicks to be sold at premium to this deal given that it is four times the size of Complan and has a superior product range.

With GSK initiating several new product developments to the brand, coupled with the company’s wider distribution network, analysts are expecting these to hold it in good stead to bag a premium.

BusinessLine spoke to several analysts who said that with market rivalries becoming an intense affair, brand strategists and marketers in the health drink segment range have been looking to refresh their brand’s positioning and image.

This has led to companies focussing on modification of the malt drink for different age groups, and pushing variants specially designed for mothers, for women, and diabetes products, due to which consumption has been gaining rapidly.

Pointing to the success of Horlicks Protein Plus and new Women Horlicks in the premium segment, analysts said GlaxoSmithKline Consumer Healthcare has upped the ante.

The company has focussed on increasing share in the high-growth protein segment led by Horlicks Growth Plus, Protein and Cardia Plus, and is also looking at brand extension of Horlicks in other food products.

While some analysts said malt-based drinks appear to be losing sheen with players in the health food drinks category facing intense competition from breakfast cereals, the pivot by certain companies to providing actual nutritional benefits and not just enhancing taste is helping change the scene.

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