Hindustan Unilever Ltd (HUL), the owner of brands Horlicks and Boost, has repositioned its ‘Health Food Drinks’ category to ‘Functional Nutrition Drinks’ amid a regulatory crackdown on packaged goods companies’ claims about their products being ‘healthy’ when many of them contain excess amounts of sugar.
In its investor presentation post earnings, the FMCG giant said that it is dialling up benefits and nutrition science on the pack to help consumers make informed choices about their food and beverage consumption.
HUL doesn’t see any impact on sales in light of the allegations on social media that have resulted in increased scrutiny for high sugar levels in the so-called health food and drinks.
On April 10, the Ministry of Commerce and Industry directed e-commerce platforms to remove all drinks like Bournvita, Horlicks and others from the category of ‘health drink’, saying there is no such thing as ‘health drink’ defined under the country’s food and safety standards laws.
The Food Safety and Standards Authority of India (FSSAI) has instructed all ecommerce companies not to label dairy-based, cereal-based, or malt-based beverages as ‘health drink’ or ‘energy drink’. This is because the term ‘health drink’ isn’t defined in the country’s food laws, and ‘energy drink’ refers specifically to flavored water-based drinks, both carbonated and non-carbonated, under the laws.
Healthy growth
Horlicks and Boost delivered high growth for HUL in the March quarter on the back of a healthy mix of pricing and volume growth. Horlicks recorded a turnover exceeding Rs 2,000 crore, while Boost is set to join the Rs 1,000-crore club, the company said in its investor presentation.
Rohit Jawa, CEO and MD of HUL said that the company has least amount of added sugar in Horlicks and Boost compared to any other brands. “Horlicks’ tagline of ‘Taller, Stronger, Sharper’ is backed by science,” claimed Jawa. “We are fully compliant with (the) FSSAI guidelines.”
The management said HUL’s adult nutrition portfolio has “no sugar”, while products in the kid’s portfolio have some sugar, which is in line with local as well as Unilever standards to make the drink palatable. The ‘functional nutrition drinks’ category serves community needs of protein and micronutrient deficiency, according to the management. “The category has real meaning for consumers, where penetration is low,” the management of the company told analysts in a post-earnings call.
HUL’s primary focus would be to increase penetration and establish a strong presence in the premium segment, which currently has a turnover of Rs 600 crore. “Horlicks is a generational product with a strong brand recall. The focus remains on reinforcing relevance,” according to HUL.
