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Nestle’s Milo in makeover mood

25-February-2004
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Nestle’s Milo in makeover mood

Nestle India is repositioning its health food drink (HFD) brand Milo. Part of the reason for Milo’s makeover, industry sources say, is Nestle’s intent to introduce another beverage brand from its global product portfolio, NesQuick.

While Nestle India refused to comment, sources say a relaunch of Milo is on the anvil. “It should happen somewhere around April, this year,” a source requesting anonymity said.

In Milo’s new avataar, sources say, Nestle plans to define and claim ownership of the ‘school going kids’ category, more precisely the class 7 to class 11 segment, rather than the broadbased ‘kids’ segment. This, sources add, will be done by sharpening Milo’s positioning as a drink for a school going kid who’s a champion in mind and body.

The aim, sources say, is to gain volumes in the brown liquid market and also create space for its new brand NesQuick in the estimated Rs 1,100-crore HFD category. “NesQuick may be introduced as a taste enhancer,” says the source.

In recent times, Nestle India has been aiming to increase penetration by following a multi-pronged strategy of expanding the product basket, increasing sales turnover by reducing the shelf life of products and lowering price points by making smaller packs.

Stagnant for the last three years, the Rs 1,100-crore health food drinks market, classified into two categories white and brown segments, has lately started getting active. The first initiative was launched by market leader Glaxo SmithKline Beecham Consumer Healthcare (GSK), last year, when it repositioned the Horlicks brand from health drink to a fun drink for young people.

GSK’s Horlicks and other brands like Boost, Viva and Maltova, together have a 75 per cent share of the health food drinks market. Horlicks alone, as a white beverage, has an over 50 per cent market share.

Nestle’s Milo, however, being a brown drink faces direct competition from Cadbury’s Bournvita and GSK’s other brand Boost. Industry sources say the market has moved marginally from the white malted beverages to the brown segment. While GSK has addressed this by adding more flavours to Horlicks, Nestle seems to be gearing up to put more resources behind its brown beverage now.

Apart from seeking a new positioning, and thereby a new target audience, Milo’s relaunch will include a new packaging, possibly new stock keeping units (SKUs) at lower price points and, for the first time new flavours as well. The product is expected to be launched in a flat bottomed Stabilo pouch pack instead of its current cardboard pack. The relaunch of Milo, which has otherwise kept a low-key profile, will also be supported by an aggressive media campaign.

Also, in keeping with its current strategy of increasing penetration through lower price points, Nestle may introduce the brand in smaller packs, too. Currently, Milo, is available in a SKU of 500-gms priced at Rs 96.

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