HUL walks the tightrope: Volume with fewer bets

HINDUSTAN UNILEVER (HUL) will double down on high-growth demand spaces, as the firm eyes fewer, but bigger bets, underthe leadership of CEO and MD Priya Nair.

- VIVEAT SUSAN PINTO

The focus will be on emerging niche categories or “market makers” as consumers increasingly premiumise.

HUL is also bringing its focus back on volume growth, as commodity prices remain soft and GST cuts reduce prices on 40% of its portfolio.

While Nair, who took overin August, is going back to the company's well-documented playbook of tapping both mass and premium consumers with a portfolio that “straddles the price pyramid”, analysts say she may have to make a choice in the current environment. That is,either go mass to ensure consistent volume growth or premiumise to improve margins.

Experts also point to competition from regional, local and D2C brands. A low-inflationary environment will mean that these brands, especially local ones, will remain competitive, chipping away share from legacy players.

“Though enabling factors such as income tax cuts and GST rate reductions have put more money in the hands of consumers, people are prioritising paying off debt, savings and making purchases of durable items,” G Chokkalingam, founder of Mumbai-based Equinomics Research, said.

THE BASKET FOR FMCG expenditure is actually limited.