ANALYSIS: Horlicks wakes up to science

GlaxoSmithKline will give Horlicks a much needed pick-me-up with pharmaceutical evidence. But brands don't always benefit from using the tactic, says Daniel Rogers

Last week it emerged that Horlicks, a brand that has always promoted itself on its bedtime benefits, is to go one stage further and include technical evidence in its marketing to prove that it helps people sleep. (Marketing, August 14).

But why should GlaxoSmith-Kline, which owns the 130-year-old drink, suddenly feel the need to bolster such claims with science?

Ask GSK and it will say only that it is 'moving toward science-based marketing across the board'. Indeed, in its corporate literature, SmithKline Beecham Drinks - the arm of GSK that markets the Horlicks, Lucozade and Ribena ranges - describes itself as a producer of 'health-orientated drinks' rather than simply soft drinks, as is the case with Britvic or Coca-Cola, for example.

"We're essentially a pharmaceutical company and our aim is to make consumers more healthy," says a company spokeswoman. "There is a strong emphasis on health claims across all our brands."

Brand extensions

Perhaps we should not be surprised that Horlicks is now getting the same heavyweight science treatment as its sister brands.

GSK has developed a number of Ribena brand extensions specifically aimed at a healthier lifestyle, namely the lower sugar Ribena Light and the notorious Ribena Toothkind, which positions itself as benign to kids' teeth with the endorsement of the British Dental Association.

And Lucozade - once just a sweet, fizzy drink your mum gave you on your sick bed - has taken its glucose positioning several functional stages further.

The basic product has been renamed Lucozade Energy with a growing array of claims. In April it ran a promotion called 'Load it like Lara', which promoted its credentials as a drink that 'stimulates alertness' and built on its link with the all-action character Lara Croft from the Tomb Raider games.

Meanwhile, Lucozade Sport claims to keep athletes going '33% longer' than water and is now even backed by the Lucozade Sport Science Academy which promotes best practice in athletic nutrition (Marketing, March 6).

GSK clearly sees its heritage as a 'scientific nutrition company' as a vital USP in today's competitive drinks market. Moreover, it needed to do something with Horlicks because it has been losing sales. Turnover fell by 3.6% to £30.3m in the year ending July 12, 2003, according to IRI.

GSK is not the first drinks company to emphasise the functional benefits of age-old formulae to reverse a sales decline.

In January 2002, Tetley, facing flagging market share, pensioned off the Tetley Tea Folk ad cartoon characters and invested £15m in a campaign focusing on a new 'Go on, live a lot' proposition.

Growing reputation

It ran into trouble when both the ASA and ITC upheld complaints in October 2002 from the Food Commission challenging the claim that 'Tetley is rich in antioxidants that can keep your heart healthy'.

Although the positioning for the teabags had to be adapted following the watchdogs' rulings, Tetley has pushed ahead with the overall strategy and is on the verge of launching nationally its first chilled functional soft drink, T of Life.

The drink contains a blend of Tetley tea, spring water and fruit juice, with added ginseng, guarana, and B vitamins. It is aimed at the under-30 age group and taps into tea's growing reputation as a natural antioxidant.

"It doesn't take a market researcher to identify the consumer trend toward healthier products and getting the right vitamins," says a senior advertising agency executive who has worked with Coca-Cola. "And what's happening on the ground is that well-established brands are being forced to compete with a new breed of deliberately functional products."

Red Bull, with its 'gives you wings' energy claims and the inclusion of taurine, revolutionised the soft drinks market in the 90s.

It has been followed with a vast array of designer beverages, most recently P&J's range of functional smoothies, MangaJo's chilled green tea drinks and The Feel Good Drinks Company's mood-oriented soft drinks portfolio.

"In the first seven months of 2003 a great many products have appeared, from cholesterol-busting products through to meal replacement solutions, an abundance of 'water-plus' variants and a surge of wellness products," says Laura Appel, editor of Zenith International's functional drinks news-letter.

Functional growth

Although functional drinks still only account for 3% of the beverage market, Zenith expects 70% growth in Europe by 2004. Could we be about to emulate Japan where functional drinks comprise 18% of all beverages sold?

"Refreshment, relaxation or fun are no longer sufficient for today's sophisticated and demanding consumer," explains the advertising executive. "Drinks marketing has moved on through 'need states' - occasions to drink - toward more clearly defined health benefits. The market is now offering drinks that claim to boost your immune system or improve the look of your skin."

Horlicks could potentially fare well in this fightback. GSK certainly has the brand heritage and the marketing war chest to blow any functional upstarts out of the water.

To back its scientific stance, the brand is to get a packaging make-over from Williams Murray Hamm and a major advertising campaign through Grey Worldwide London and MediaCom.

But history tells us that such functional relaunches are rarely plain sailing. Ribena Toothkind was dealt a huge blow in January 2001 when a High Court judge ruled that the company was wrong to claim that it did not encourage tooth decay.

Mr Justice Hunt said that when taken as a whole, the evidence did not justify the "absolute nature of the claim".

The ruling followed a stand from the Advertising Standards Authority (ASA), which argued that Ribena Toothkind's positioning was misleading.

This generated a damaging amount of negative PR for GSK, including various BBC news stories.

Debatable value

Horlicks essential claim - relaxing sleep - seems somewhat less tangible, and probably less contentious, than avoiding heart disease or tooth decay, so the likelihood is that it will avoid a backlash. However, Peter Matthews, former chief executive of Cullens and now the entrepreneur behind a range of high-performance drinks called Optio, believes that, as a rule, brands need to add genuine value if they are to be accepted as functional.

"Where there is an added ingredient with a functional benefit - what is generally known as a 'neutraceutical' - then that's great, but when it's simply a repackaging issue, the value is debatable," says Matthews.

His answer, Optio, is an unashamedly functional creation - a blend of fruit smoothie and vitamin and mineral supplement in a single, daily 'shot'.

"In many countries around the world liquid supplements are popular. With sales of vitamin tablets now stalling, I think this market will take off and Optio is the first real player," he says.

Peter Shaw is director of brand consultancy Corporate Edge. It has extensive experience with branding household names and recently created the identity and positioning for Optio.

Shaw believes the rule is that if a brand is to adopt scientific positioning, then it needs to explain this very clearly to the consumer.

"You need to understand which side of the water you're on," says Shaw.

"If you are a functionally created drink such as Optio you need the right retail positioning, whether that's in a health store or in a Tesco NutriCentre.

If you're an established brand, the repositioning must be done in a subtle and incremental way, or you may even need a mark II version of the drink.

It's when you fudge the issue that you can become unstuck."

Brands face legislation battle

Rules being proposed by the European Commission will trigger a shake-up of food marketing, including a ban on vague health claims and an end to endorsements by medical professionals.

Under plans announced last month by the Health and Consumer Affairs Commissioner David Byrne, nutritional, functional and health-related claims must not be deceitful, raise doubts over foods that do not make similar claims or be unintelligible to the 'average' consumer.

And, in a move that has implications for GlaxoSmithKline's revamp of the Horlicks brand, all health claims based on scientific data must be submitted to the assessment of the European Food Safety Authority. For sister brand Ribena Toothkind the perils are even clearer, with the Commission's proposals banning any reference to, or endorsement by, doctors or health professionals. Tetley Tea, which carries the backing of the British Heart Foundation, would also be affected.

The restriction has been conceived because of a concern within the Commission that customers might mistakenly think that not consuming the endorsed product could lead to health problems.

More broadly, the legislation would place much stricter control on the use of phrases such as 'low-fat' and 'high in fibre', for so long the mantra of hundreds of food products on sale in UK supermarkets.

There will also be greater prohibition on claims that refer to the energy-giving properties of food and drink products, which could curtail the marketing strategies of scores of brand manufacturers.

The proposals, which have already gained the backing of consumer groups across Europe, will have to be agreed by European Union member governments.

But it is clear that with such detailed proposals now being supported at the highest levels in Brussels, food manufacturers are facing an unprecedented battle to retain claims that for many years have underpinned the appeal of their products.

Mark Kleinman.

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