Hindustan Unilever’s popular soap brands such as Lux, Lifebuoy and Breeze are not the driving force behind the company’s growth. Instead, its premium line of soaps and detergents pushed HUL’s revenues.
Hindustan Unilever’s popular soap brands such as Lux, Lifebuoy and Breeze are not the driving force behind the company’s growth. Instead, its premium line of soaps and detergents pushed HUL’s revenues, a report said. “Even as other parts of home care (dishwashing, toilet/surface care) also performed well, we believe the biggest growth driver for the segment (and the company) was once again the detergents portfolio,” a report by Kotak Institutional Equities said. In fact, the company’s soaps segment has reported a 3.4% decline on-year with the portfolio having struggled for growth for the past many years. The company has however, grown its premium line of soaps even while affordable and popular brands struggled. The FMCG major retails Dove, Pears, among others, under its premium soap range.
The Indian arm of global fast-moving consumer goods company Unilever is also being helped by other strategies such as premiumization, strengthening the core, market development, innovation, new channels, and brand renovation among others. However, like every other company that has been affected by lockdown, HUL too has witnessed the headwinds of coronavirus with its overall revenue growth as well as underlying volume growth at 2% for the year. The pandemic dragged down Q4FY20.
Meanwhile, while the soap segment remained downbeat for HUL in the last year, the company is still betting high on the soaps business in the coming months as coronavirus has suddenly increased the demand for soaps. “While growth rates and usage rates of the past two to three months may not sustain, the HUL management seems confident in the opportunity for volume momentum and premiumization momentum being much stronger than it has been in recent years,” a Motilal Oswal report said on Monday, citing HUL MD Sanjiv Mehta. The company had scaled up the production of its Lifebuoy range of soaps even before the government imposed a lockdown as the company anticipated higher demand of soaps with people growing more concerned about hygiene owing to coronavirus outbreak.