HUL’s balancing act: Premiumisation without pricing out consumers

The strategy comes as FMCG companies navigate a mixed fast-moving consumer goods market, where rural growth continues to outpace urban growth and inflation has returned to categories such as soaps and detergents. HUL, however, says its breadth of brands across price points gives it an advantage in protecting volumes even as it nudges consumers towards higher-value products.

“We are obsessed with volume-led revenue growth. That continues to be our priority,” HUL’s chief executive officer and managing director Priya Nair said in a post-results media interaction on Tuesday, underscoring that growth—not margins—will continue to dictate pricing decisions.

HUL reported a 10% underlying sales growth in the June quarter, its strongest performance in 13 quarters, with growth evenly split between price and volume (5% each). The company expects commodity inflation to remain volatile, estimating sequential inflation or price hikes of 2-5% in the September quarter owing to crude-linked inputs and palm oil.

In the June quarter, HUL reported a 3% year-on-year decline in consolidated net profit to Rs 2,673 crore, impacted by a one-off tax credit in the year-ago period. Revenue for the period stood at Rs 17,341 crore, up 10.1% from Rs 15,757 crore in the same quarter last year.

Instead of fully passing on higher costs, HUL is taking what it calls a calibrated approach. Chief financial officer Niranjan Gupta said the company passed on only about half of the inflation through pricing in the June quarter while maintaining Ebitda margins at around 23%, within its guided range. “We’ll continue to take some calibrated, measured steps on pricing and continue to drive savings as well,” Gupta said.

The balancing act is most visible in personal care. Premium soap brands Dove and Pears continue to post double-digit growth, while body wash—where penetration in India remains in the low single digits—is emerging as HUL’s next premiumisation opportunity. “We are extremely well placed to keep moving consumers up that value ladder,” Nair said of soaps.

Yet, the company acknowledges that a large part of India’s consumption still sits at the lower end of the price pyramid within soaps. Rather than sharply increasing prices on entry-level products, particularly those sold at fixed price points such as Rs 10 and Rs 20 packs, HUL opted to cut grammage to preserve affordability in the June quarter.

“Our portfolio straddles across the price pyramid and benefit pyramid,” Nair said. “Our portfolio insulates us, whether it’s the breadth of our portfolio across categories or the depth of our price-brand architecture.”

That strategy extends beyond soaps. In beauty, HUL is scaling premium brands such as Minimalist and Simple while extending legacy brands including Dove and Vaseline into higher-value categories. Minimalist is now approaching an annual revenue run rate of Rs 800-900 crore and is growing 40-50% year-on-year, according to Nair.

At the same time, HUL is attempting to democratise premium categories rather than keeping them exclusive. It recently introduced Rs 10 sunscreen packs as part of its effort to expand a category whose penetration remains low.

“Penetration of sunscreens in India is under 2%. Our opportunity is to democratise sunscreen at scale,” Nair said.

The strategy reflects HUL’s broader view of the Indian market. While premiumisation remains a long-term structural trend driven by rising incomes and changing consumer preferences, the company believes growth will come only if it can simultaneously serve the country’s vast mass market.

For HUL, premiumisation is no longer about moving away from affordability—it is about widening the ladder while ensuring consumers at every income level have a place on it.