ITC open to lapping up Horlicks

Abhishek Law Kolkata | Updated on November 28, 2018 Published on July 27, 2018

Horlicks holds 49% share of the ₹7,000-cr health food drinks sector

But Complan is not its cup of tea

Diversified Indian enterprise ITC Ltd has evinced interest in the acquisition of GSK’s health drink brand Horlicks.

Horlicks holds a 49 per cent share of the ₹7,000-crore health drinks segment.

GSK has put the brand under “strategic review”, and a final decision is expected to be taken by this year-end. Kraft Heinz-owned Complan, a major malt-based brand, is reportedly up for sale in India.

“If it is at the right price, why not (acquire Horlicks)? But I don’t think the bid has opened for Horlicks....However, for (the acquisition of) Complan, that is a very clear no,” said Sanjiv Puri, Managing Director and CEO, ITC.

Puri, however, clarified that the company is keen to enter the protein-supplement market, which, he said, is gaining traction.

Incidentally, Horlicks has a protein-based offering apart from malted drinks. Both malt- and protein-based drinks are broadly categorised into the health food drinks segment.

“Health and wellness is a trend in the market. And, from that angle, protein supplements are better,” Puri maintained.

The company has kept all options open to enter the segment — including investing in start-ups. “Whatever is synergistic with what we are doing, we will go for it,” Puri said.

Bigger FMCG pie

ITC, which reported a non-tobacco business of ₹26,000 crore in FY18, is looking at a larger play in the fast-moving consumer goods (FMCG) segment.

This year, the company will look to enter at least four new categories, with nearly 30 new offerings. ITC has already forayed into the cakes and baked snacks, anti-ageing personal care solutions, and floor-cleaning segments. It will soon break enter the ₹2,000-crore frozen snacks segment.

The company is also mulling enhancing its share of ‘managed’ properties in its hotel business.

Although the company is setting up its own property in Colombo, ITC may look at managed properties in the SAARC region, South-East Asia and West Asia. Managed properties could also be explored in India, Puri said.

Currently, ‘owned’ to ‘managed’ property is a 60-40 mix for ITC, and over time, it is expected to be around 50:50.

Published on July 27, 2018
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