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Hindustan Unilever's premiumisation bets, acquiring majority stake in Minimalist
In a bid to capitalize on India’s growing affluent beauty and personal care market, HUL targets portfolio shift towards premium offerings.
Hindustan Unilever (HUL) is positioning itself to capitalize on the growing demand for premium beauty and wellness products, aiming for a 900 basis point improvement in its portfolio toward premiumization in the coming years, according to CEO Rohit Jawa. Speaking in a post-earnings call, Jawa emphasized that the company continues to see a trend toward premiumization, fueled by evolving consumer aspirations and needs, which has partially offset some of the negative effects of product mix shifts.
Currently, the affluent segment of the beauty market accounts for approximately 50 percent of total sales and is expanding at twice the rate of the broader beauty sector. Despite this, India’s per capita expenditure on beauty remains significantly lower than in many other markets, signaling substantial potential for growth in premium categories, Jawa noted.
In line with this strategy, HUL has announced the acquisition of a 90.5 percent stake in the skincare brand Minimalist for Rs 2,955 crore. This acquisition, conducted through secondary transactions, sees HUL buying out the stake from existing investors, including Peak XV Partners. The remaining 9.5 percent will be acquired from the company’s founders over the next two years, according to HUL’s statement.
For the quarter ending December 31, 2024, HUL’s beauty and wellness division experienced modest growth of 1 percent year-on-year, a result impacted by delayed winter weather. In contrast, haircare delivered mid-single-digit volume growth, driven by strong performance across sachets and emerging formats. "Within the sachet segment, premium shampoo sachets are outpacing their mass-market counterparts, further highlighting the ongoing shift toward premiumization," Jawa explained.
The company also reported a 19 percent year-on-year increase in net profit for the for the quarter ended December 2024, largely attributed to a one-time gain from the divestment of its Pureit business. Consolidated revenue for the period stood at Rs 15,559 crore, up slightly from Rs 15,259 crore in the same quarter last year.
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