HUL recently announced its currency effects for the first quarter of fiscal 2024, reporting an underlying year-on-year expansion of sales of 3% to INR (US$595. 8 billion) in cash and a 4% year-on-year expansion in after-tax profit to INR. (US$ 101. 1 billion). this quarter.
According to Ritesh Tiwari, HUL’s chief financial officer, much of that comes from the company’s food and soft drink category, which includes nutritional drink brands such as Horlicks and Boost, as well as its ice cream, condiments and tea businesses.
“In HUL’s three main segments — home care, good looks and private care, and food and soft drinks — the latter had positive costs and mid-digit growth,” he said at HUL’s latest investor conference. effects for the first quarter of fiscal year 2024.
“We had invested heavily in inventions and activations for this category, such as ice cream with product inventions [such as] a partnership with Cadbury to launch an ice cream that incorporates Cadbury Crackle Chocolate and Feast; as well as the Mango Duet ice cream.
“Our teas also strengthened their market leadership this quarter [and despite consumer degradation], green tea and functional tea continued to perform well. “
Tiwari is under pressure to continue its nutritional beverage portfolio and expects this category to make even bigger gains now that it is less hampered by inflationary pressures.
“Diversity Plus includes product spaces such as protein, diabetes, women’s fitness and much more, and is the component of the business that is top-of-the-line and has seen the most powerful acceleration in terms of growth.
“We have been working hard to increase consumption in this category, as it is what has peaked in the era of peak inflation, with milk being one of the limiting points affecting consumption, now that the prices of new milk have decreased and are now more moderate. In general, the costs of raw fabrics used in the manufacture of these products have experienced some deflation.
“So, taken together, pricing and fee details now will help us drive intake growth even further, and going forward, our major suppliers will continue to increase intake. “
HUL CEO Rohit Jawa added that the company would also invest more in diversity to increase its accessibility to more customer groups.
“We put a lot of emphasis on building Diversity Plus, as it is the high-end component of the portfolio and we saw encouraging results. That’s why we’re also investing in the products in terms of making packages more accessible,” he said. said.
“This means reducing the average value according to the packet, which [will increase] penetration; as well as the knowledge of the construction logo and expanding the portfolio into more variants, and with those types of initiatives, we have already noticed an improvement in our market consistent with the percentage. and slow growth.
Jawa is under pressure and wants to evolve HUL’s nutrition portfolio beyond a high-end functional logo to develop and succeed because of the role it must play in addressing the demanding malnutrition situations in India.
“This category addresses a network that wants to cover the carbohydrate, protein and micronutrient deficiencies of the average Indian, whether male or female, deficient or rich,” he said.
“This is a pan-Indian opportunity and this category has a genuine goal in people’s lives: to improve their functional health.
“At present, this category is still poorly penetrated, basically in southern and eastern India. Therefore, we have a great opportunity to grow this category, and we know that this is quite imaginable because we already have the right models in Southeast Asia. , for example, where the category is much larger.
He also expressed optimism for the short and long term and confidence that “the worst is behind us” in the market, hoping this represents an opportunity for rural consumers to have a broader component of the landscape.
“In recent years, inflation or price increases have been quite significant [and therefore] have had a specific effect on rural sales as they have been caused by COVID and inflationary shocks,” he said.
“But I think we’re seeing a slow recovery; We expect there to be a larger monsoon [which] will have an impact, as we all know, on the agro-economy and on rural consumption; however, I think in that sense, that’s probably the worst. It’s outdated.
“As of now, we’re seeing a slow recovery in rural income, and of course, urban income has been more resilient, especially on the high-level side. [So] I think now that we’ve had a few years of negative termination, the positive termination of the cycle has arrived. “
We’ll be talking about vital topics like healthy aging, women’s health, active nutrition, nutrition and Nutra for Kids, healthier product inventions, and much more at our upcoming Growth Asia Summit 2024 with a host of experts signing up to join us – click here to find out how you can register for us in this talk about ion.