HUL sees health supplements as next growth opportunity as premium segments help cope with biting inflation

Fast-moving consumer goods (FMCG) giant, Hindustan Unilever Ltd (HUL), reported its quarter one numbers on July 19, 2022. The numbers largely met Street expectations and the company’s profitability was backed by better-than-expected growth in domestic volumes. HUL reported an 11.1 percent year-on-year increase in net profit for the April-June period.

While speaking to CNBC-TV18,  about the numbers, Sanjiv Mehta, MD and CEO of HUL, said that for the next spurt of growth, they will look at health supplements in a big way. The penetration of Health Food Drink (HFD) as a category nationally is just about 25 percent and India, as a country, India is deficient when it comes to vitamins, minerals, and micronutrients.

“We are being a bit patient with HFD because we believe in its long-term potential and we must understand it's a very profitable business. It's not dilutive to us. So yes, it may be that the kind of growth we had envisaged, instead of getting it immediately, might come with a lag but that's alright with us. We have the capacity to wait, and we believe in it and it will definitely help us move towards realizing our vision of nourishing a billion lives,” he said.

Mehta is very optimistic about India's growth story this decade and beyond. As people move up the pyramid, the demand for premium products, which has helped the company in this quarter too, will only increase.

“Our increased focus is on bringing in premium products and premium products naturally, would have margins which will be superior to the mass end of the portfolio,” he explained.

"HUL has a strong portfolio that caters to the bottom of the pyramid but the company’s focus on innovations is looking at going up the pyramid of benefits and strengthening a premium portfolio, he added.

Also Read: D-Street is cautious as these daily essentials may cost more following GST rate hike

The company is trying to protect price points as much as possible.

“We ensure that we straddle the price benefit pyramid. So we try to protect the price point as far as possible,” he said.

In the context of the GSK Consumer’s acquisition, he said, “We are so delighted that we are able to get brands like Horlicks and Boost in our portfolio.”