GSK Consumer to focus on breakfast and snack segments – could be future growth driver
GlaxoSmithKline Consumer Healthcare (GSK Consumer) is planning to focus on the breakfast and snack segment as its next growth drivers in India. The company is planning to roll out a slew of products which will be positioned as healthy and nutritious breakfast and snack segments.
According to the Industry, the health food segment that includes items such as breakfast cereals, biscuits, dairy products and breads are growing at the rate of 30-35 per cent annually.
GSK Consumer’s Horlicks Oat’s got huge response in the southern markets of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka. Horlicks Oats has already become the third largest brand in the oats segment with around 12% share. Horlicks Foodles gained mix bagged response in the market. The company is re-defining the strategy for Foodles to make it an established brand in the market.
Another focus area for GSK consumer will be oral care category and is planning to launch few more products from global portfolio. Sensodyne has gained 2% market share in the domestic toothpaste market.
View: The non-food drink segment currently contributes around 6% of GSK Consumers total revenue. It is focusing on de-risking its revenue model and is planning to launch products in new segments (including Health Foods and snacks). However there are other larger players who want to gain larger pie in this segment. Hence the competition is building up in the segment.
However considering GSK consumers R&D support, strong brand positioning and enhancing distribution reach, we believe GSK consumer is well poised to tap the healthy food and snacks segment, which we believe will be the key growth driver for the company in long run. We also like GSK Consumers on back of its strong balance sheet and cash generation ability. We maintain our Buy with the price target of Rs 3000.
....more info
GlaxoSmithKline Consumer Healthcare (GSK Consumer) is planning to focus on the breakfast and snack segment as its next growth drivers in India. The company is planning to roll out a slew of products which will be positioned as healthy and nutritious breakfast and snack segments.
According to the Industry, the health food segment that includes items such as breakfast cereals, biscuits, dairy products and breads are growing at the rate of 30-35 per cent annually.
GSK Consumer’s Horlicks Oat’s got huge response in the southern markets of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka. Horlicks Oats has already become the third largest brand in the oats segment with around 12% share. Horlicks Foodles gained mix bagged response in the market. The company is re-defining the strategy for Foodles to make it an established brand in the market.
Another focus area for GSK consumer will be oral care category and is planning to launch few more products from global portfolio. Sensodyne has gained 2% market share in the domestic toothpaste market.
View: The non-food drink segment currently contributes around 6% of GSK Consumers total revenue. It is focusing on de-risking its revenue model and is planning to launch products in new segments (including Health Foods and snacks). However there are other larger players who want to gain larger pie in this segment. Hence the competition is building up in the segment.
However considering GSK consumers R&D support, strong brand positioning and enhancing distribution reach, we believe GSK consumer is well poised to tap the healthy food and snacks segment, which we believe will be the key growth driver for the company in long run. We also like GSK Consumers on back of its strong balance sheet and cash generation ability. We maintain our Buy with the price target of Rs 3000.
....more info