Over the last several years FMCG companies have successfully used sachets to expand product sales and enter new markets. Drug maker Pfizer is following suit. Last month it launched a 10 ml sachet of its popular antacid brand Gelusil. Pfizer hopes the sachet will help attract new customers and bridge the shortfall caused by dwindling tablet sales.
In a market (antacids) that is growing at CAGR of 8.5 per cent and Gelusil (in the last three years) at 7.8 per cent, Pfizer is keen to keep a tight hold. It has seen a few setbacks recently. Last year, when TRA, a global brand intelligence agency, released its ranking of the top 1000 Indian brands, GSK Consumer Healthcare brand Eno made a surprise entry to the list at 387 while Gelusil did not figure at all and Pfizer barely scraped in at 925 having dropped 98 places from its rank in 2014. A report on the digestive remedies market (of which antacids is a significant component) by Euromonitor said that Dabur India continued to lead the category in 2015 with a 35 per cent share of value sales with its flagship brands Hajmola, Pudin Hara and Nature Care.
Pfizer says that its competition is not from these brands. And its position in the prescription drugs in the antacids category is intact; Gelusil is ranked number one in India with annual sales of Rs 119 crore. It has 30 per cent market share, according to IMS data and competes with brands such as Digene (Abbott), Ulgel (Alembic), Diovol (Wallace Pharma) amongst others.
Sachets will help Gelusil take the fight to Eno's doorstep. Sold by both by chemists and provision stores, Eno has a wider distribution network. According to industry estimates Eno's sales numbers are over four times higher than Gelusil. Even Abbot, number two to Gelusil, sells Digene in a sachet. In 2014 Abbott introduced Digene Fizz while Eno adopted the small-sized packaging a long time ago. Both Eno and Digene are sold in fruit based flavours too.
Pfizer's senior director (Global Established Products) Partha Ghosh said the company continuously looks to innovate but does not have an immediate plan to launch Gelusil in other forms or flavours. He added that the liquid Gelusil in a sachet is far superior to the powder form of antacids being sold in the market. "Gelusil gives instant and long lasting relief. It protects stomach lining from damage due to excessive acid and it is more long term in efficacy," Ghosh said.
According to Ghosh, the sachet gives Pfizer twin advantages. Sales of antacid tablets are on the decline and the gap can be bridged by liquid. Sachets can help here as they allow consumers to buy smaller quantities. Besides, the unit price of the product comes down, a sachet sells for Rs 8 and this gives the company an opportunity to penetrate the market better. The 200 ml bottle of liquid Gelusil is priced at Rs 81. It is also easy to carry and allows customers to consume the antacid on the go.
"The sachet can create a new market for Gelusil with its lower price point. Also it will appeal to a relatively younger consumer segment and thus help widen the consumer base," said brand expert N Chandramouli.
In 2006 the drug maker sold its OTC portfolio to Johnson & Johnson in a global deal but has retained Gelusil in India. Gelusil overtook Digene as the number one brand in the antacid anti-flatulent segment in India in 2013. But the two brands are neck to neck in sales today. Digene has a market share of 28 per cent and has higher number of prescriptions (2.7 million) as against Gelusil which received 2.5 million prescriptions annually. However Gelusil has more repeat customers and hence records higher sales amongst the two products. Prescriptions account for 22 per cent of Gelusil sales and rest are repeat purchases.
Ghosh says Eno is not a direct competitor to Gelusil but agrees that both vie for business in the same market and have the same customer base. But Gelusil has an advantage as it is prescribed by a doctor, he believes. Increasingly even gastroenterologists are prescribing it, bringing in more credibility for the product, Ghosh said. Another sign of customer confidence is repeat purchases.
But in a competitive antacid market Pfizer will still have to ensure promotion for sachets. Rana Bawa, country manager of Ogilvy CommonHealth Worldwide, health communication arm of Ogilvy said Pfizer will have to ensure distribution and visibility for the sachets. And for that, he said, "The company will have to engage with chemists for promotions."