Peter Harding is warmed up for a “year of sport”. One month in, he talks about GSK’s recent performance

Peter Harding has a secret weapon. And it’s not one the GlaxoSmithKline general manager UK & Ireland is likely to share with rival competitors any day soon.

His weapon is called Viper Boost. It’s an energy bar made by Maximuscle that blends caffeine, guarana and taurine and Harding relies on it when he hits the wall during one of the gruelling Ironman competitions he regularly competes in.

Harding discovered the bar after GSK bought Maximuscle owner Maxinutrition for £162m in late 2010. The acquisition was a reflection of the company’s wider strategy to become what Harding refers to as a “fast-moving consumer healthcare business - a business with the speed and agility of a drinks business or a packaged goods business in the healthcare arena”.

GlaxoSmithKline is now a step closer to realising that ambition following the completion of the merger of its UK and Ireland nutritional and consumer health businesses last month.

In his first interview since being tasked with overseeing the new £1bn Consumer Healthcare business, which brings together brands including Lucozade, Ribena, Sensodyne, Aquafresh, Panadol and NiQuitin, Harding admits that since the announcement last September, GSK has undergone a “seismic” shift internally to integrate the two. “It’s been pretty intensive bringing those businesses together,” he says.

The upside is that the business can now work on delivering the next generation healthcare products consumers are demanding. “We did it to become really customer-centric and bring the potential of this business to life,” explains Harding. “We all know healthcare is a massively buoyant and dynamic sector and we also know the government is asking the industry to step forward and help consumers self-medicate in many areas. We see ourselves as uniquely positioned to help customers and retailers take hold of this opportunity and to grow new categories that have been around for a long time but have unfulfilled potential.”

This year’s full calendar of sport presents a clear opportunity to exploit this potential, believes Harding. He expects GSK’s sports drinks to have a strong 2012 thanks to the Olympic Games (GSK is LOCOG’s official laboratory services provider tasked with overseeing anti-doping testing during the games), the UEFA European Football Championship and GSK’s recent tie-ups with the England rugby team and the F1 racing group McLaren.

He also hopes to reap the rewards of its £15m ‘Faster. Stronger. For Longer’ campaign launched last month. Starring Olympic gold medal prospects Mo Farah, Phillips Idowu and Louis Smith alongside Premier League footballer Ashley Young, “the campaign is far more reminiscent of the original Daley Thompson and John Barnes ads in its execution,” he says.

“But it’s also very much in the spirit of the ‘Yes’ campaign, which will continue to run for the rest of the Lucozade brand - so I’m pretty excited by it.”

As he is by GSK’s fittingly sporty “fast innovation” push. Healthcare NPD is not known for its speedy turn around, but Harding hopes to change that. “We intend to be very agile and fast to market with simple propositions that just add value and allow our customers to offer something different, that drive footfall and keep us all with a smile on our faces as we lean into the economic headwind,” he says, citing Lucozade Cola as a good example.

The drink took just six months to deliver from concept to market and since its launch last October, it has sold well, claims Harding. There’s more to come, he promises. “Even though sports and energy drinks have been doing well, it’s primarily the energy drinks that have been driving that. I think this year we’re going to see a resurgence of sports drinks and the innovation that we’re bringing to market will help drive that.”

In keeping with its strategy to introduce more health benefits to its drinks range, GSK is this month launching Lucozade Revive - a lightly-sparkling drink containing vitamin B and just 50 calories per bottle (see fmcg news, p28) - and also out of the starting blocks is Ribena Plus, which GSK claims is its biggest launch for 20 years.

The £6m marketing spend allocated to Ribena Plus is also the highest ever for Ribena. There are two variants in the no-added-sugar range - one enhanced with vitamins A and E to support immunity, the other containing calcium for healthy bones.

Further NPD is also planned for Maximuscle. The range is currently perceived as being primarily for gym bunnies and Lycra lads, but GSK wants to take the brand into a whole new demographic area. “If one looks at muscle wastage between the age of 45 and 55, most of us will lose about 20% of our muscle mass, which makes us highly vulnerable to ill health, falls and broken limbs,” says Harding. “We’re looking to shift our Maximuscle footprint into that area and age group because we see a real consumer need and benefit.”

In the current economic climate, consumer needs and benefits have, of course, changed and GSK has worked hard to reflect this in its NPD, he adds. “We look at it from two perspectives. At the top end it’s the added-value, unique differentiated science where consumers are willing to pay a premium. Sensodyne is a fantastic example of that. Equally, there is another part of the equation, which is that at the lower end of the market we have to offer value propositions. This is not a value proposition in the sense that it’s a dive to the bottom and we’re looking to give stuff away.”

It is, however, a value proposition in the sense of something that can compete with recession-friendly own-label offerings. Harding concedes that sales of some of GSK’s over-the-counter brands have been hit by consumers switching to cheaper own-label products.

The onus is now on these brands to offer better value and a genuine point of difference. To that end, GSK will be focusing on delivering more innovations such as Beechams Breathe Clear, a product he describes as “smart science with good consumer insight”.

It is also working to more closely align its marketing campaigns with its products. While its high profile ‘Yes’ campaign generated a lot of noise on social media channels, the company didn’t tie the campaign enough to sports performance (even though the ads featured athletes), says Harding, attributing the 1.9% slump in Lucozade Sport sales last year partly to this failure [Nielsen 52 w/e 1 October 2011].

This year’s more targeted marketing and NPD should go some way to addressing this, he argues, as will GSK’s ongoing global divestment programme. The company agreed to sell a handful of North American non-prescription drug brands to Prestige Brands Holdings in December for more than £400m and Harding says further divestments are still under negotiation. These moves may not have been made from a position of strength, but they allow the company to focus on the core brands within its portfolio, points out Harding.

Focus will be key to unlocking GSK’s potential this year, believes the GSK boss. As a keen sportsman, Harding understands the importance of focus only too well. And as an economic history graduate, he’s fully aware that the winners in a downturn will be those who are prepared to put their heads above the parapet - which is exactly what GSK plans to do.

“If there’s one thing I’ve learnt from my history it’s that at particular points in time there is a period of disruption,” he says. “This happens on a five or 10-year basis and that disruption creates lots and lots of opportunities.

“It’s the players who step into that space and who are prepared to really play and can be agile enough and change-oriented enough to adapt who are really going to be able to benefit from it. I see that for us as individuals, I see that for GlaxoSmithKline and I see that for our customers as well.”