HUL gears up for a big push on food and beverages segment
The country's largest FMCG firm by sales HUL on Tuesday said it is working on plans to make its foods business 'massive' in India, in-line with global markets, and significantly increase its contribution to overall revenues.business Updated: Aug 03, 2010 23:21 IST
The country's largest FMCG firm by sales HUL on Tuesday said it is working on plans to make its foods business 'massive' in India, in-line with global markets, and significantly increase its contribution to overall revenues.
The company, which sells food and beverages (F&B) brands like Brooke Bond, Red Label, Annapurna, Bru, Kissan and Kwality, gets 18 per cent of its total revenues from the division.
"We have plans to make this segment (F&B) much bigger than what it is right now. Currently the segment is very small as compared to Home and Personal care (HPC)," Hindustan Unilever Ltd Executive Director Shirjeet Mishra told PTI on the sidelines of a FICCI event.
He, however, did not specify by how much does the company intend to increase F&B's contribution to HUL's total sales, from the current of 18 per cent, or the new launches planned.
HUL had posted a revenue of Rs 4,793.89 crore in the first quarter ended June, 30, with a net profit of Rs 533.21 crore.
The company has been trying to make its F&B category much bigger than what it is right now by launching new products for the Indian market and expanding its distribution network.
This year it launched tea - Brooke Bond Sehatmand, and Knorr Soupy Noodles.
According to market observers, the F&B market in India is growing at a very fast pace, but HUL has not done enough yet to crack it.
"This year, the company launched two new variants in the foods division which have been received well by the market. But HUL can do far better. It has not entered into new category for a long time. So there is definitely huge scope," Angel Broking Analyst Anand Shah said.
Globally, the food portfolio of Unilever (HUL's Parent), with brands such as Becel, Flora, Bertolli, Heartband, Lipton, Slim Fast and Knorr, accounted for 50 per cent of total revenues of 10.1 billion Euro in the quarter ended March.
Asked as to why the company has not been able to sell enough food products in India as compared to its home and personal care items, unlike in other markets, Mishra said: "The reason is that we started late here (India). But now it's just a matter of a some time it will become massive."
He added, "The category is growing at a strong double digit growth."
On HPC, Mishra said, "It is a big category with huge potential. There is immense scope for deeper penetration into the market."
For the quarter ended June, 2010, HUL's HPC business grew 5.2 per cent, while the foods business grew 13 per cent.