HUL Focuses on Premiumization: Aims for Portfolio Shift Towards High-End Products
HUL CEO Rohit Jawa Emphasizes Premiumization in the Beauty Market
HUL CEO Rohit Jawa stated that in the beauty market, the premium beauty segment contributes approximately 50% and is growing at double the pace of other segments.
Hindustan Unilever (HUL) is under-indexed in premium offerings within the beauty and wellness category, although other parts of the business are over-indexed in premium segments. Speaking during an earnings call, Jawa said, “We aim to achieve a 900 basis points improvement in our portfolio’s premiumization over the next few years.”
HUL Focuses on Premiumization
Jawa further explained, “This quarter, we have observed premiumization due to rising consumer aspirations and evolving needs, which partially offsets the impact of a negative mix.”
Currently, the premium beauty segment accounts for around 50% of the beauty market and is growing at twice the rate of the rest of the market. Additionally, India’s per capita expenditure on beauty products is significantly lower compared to many other countries. Jawa noted that this indicates significant potential for premiumization.
To capitalize on this opportunity, HUL announced the acquisition of a 90.5% stake in the skincare startup Minimalist for ₹2,955 crore. Through secondary transactions, HUL will acquire the stake from existing investors, including Peak XV Partners and others.
HUL stated, “The remaining 9.5% stake will be acquired from the founders over the next two years as per the terms outlined in the transaction documents.”
During the quarter ending December, the beauty and wellness segment recorded a modest 1% year-on-year growth. Performance was impacted by a delayed winter season. The haircare category achieved mid-single-digit UVG growth driven by broad-based performance across all sachets and formats.
Jawa added, “Within the pouch segment, premium shampoo pouches are growing faster than mass-market pouches, indicating a consistent trend toward market premiumization. Our targeted efforts in emerging formats like serums, masks, and conditioners continue to yield positive results.”
The FMCG giant announced its earnings on January 22. HUL reported a 19% year-on-year increase in net profit for the quarter ending December 2024, driven by a one-time exceptional gain from the divestment of its Pureit business.
Meanwhile, the consolidated revenue for the quarter ending December 31 stood at ₹15,559 crore, compared to ₹15,259 crore in the same period last year.
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