Functional positioning spurs malt-based drinks growth in India
While malt-based hot drinks have seen somewhat of a decline in popularity in the Western markets that they originated in, such drinks remain popular in countries that were formerly British colonies, says a report by Euromonitor International’s senior beverage analyst Virginia Lee.
This is especially true in India, where sales of malt-based hot drinks hit US$1.1 billion in 2015, said Lee – who noted that a recent re-focus on the functional and health benefits of malt beverages has helped market growth.
“The British Army brought Horlicks to India at the end of World War II for nutritional fortification,” Lee wrote. “Since that time, makers of malt-based hot drinks have taken advantage of rising health awareness and incomes to position them as health food drinks that can aid physical health and mental functioning.”
“The focus on function instead of flavour has allowed malt-based hot drinks retail volumes to grow at a faster rate from 2010-2015 than all other hot drinks categories, excluding instant coffee and tea bags black,” said Lee.
She noted that while producers of similar beverages, like flavoured powder drinks and RTD chocolate milk target children by focusing on taste, makers of malt-based hot drinks in India target adults by focusing on its ability to address nutritional deficiencies and to improve physical and mental performance.
“In India, the functional claims made by malt-based hot drinks are similar to those made by toddler milk formulas (…) and supplement nutrition drinks,” said the Euromonitor analyst.
Lee noted that marketing for Mondelez-owned brand Cadbury Bournvita currently focuses on how a combination of vitamin D, vitamin C, iron, and other vitamins and minerals enhance the nutritional power of milk for growing children.
Meanwhile, GlaxoSmithKline has looked to extend its range of malt-based beverages the Horlicks brand family through the introduction of Horlicks Lite and Women’s Horlicks which are based on functional benefits for diabetics and pregnant women.
By 2020, India is expected to account for 47% of all global malt-based hot drinks retail volume sales, up from 41% in 2015, said Lee, who said that the country’s expected growth shows that the combined influence of greater incomes and improved nutrition knowledge can help to boost the fortunes of a category that ‘has been around for decades.’
“A look at per capita retail volumes for malt-based hot drinks shows room for continued growth in India,” said Lee – adding that despite overall high sales volumes the country’s retail volumes of 0.2kg per capita are far behind other countries in Asia, including Singapore (1.2kg per capita), Malaysia (1.1kg) and Hong Kong (0.5kg).
“At the same time, malt-based hot drinks are likely to see more competition from RTD flavoured milk drinks that offer more convenience,” noted Lee who added that expansion of functionally focused malt-beverages in to a RTD format could also work well.