Hindustan Unilever has to get the volumes and is pivoting its strategy by investing in premium brands that are showing traction and growth, a ₹2,000-crore portfolio of six selective premium lines in which it plans to invest and scale them up. It is also planning to get more brands from its parent Unilever into India.

The high-growth areas in which it plans to invest more include sun care, facial cleansing, serums, light moisturisation, weatherproof body care and masstige beauty segment.

The company calls it reshaping its portfolio to high growth spaces. It has invested disproportionately in premiumising many of its brands because most of the growth comes from the high-end consumer segment. Part of its premiumisation strategy is also led by the fact that many of the new-age companies in the beauty and personal care segment have products that are targeted towards the discerning customer who is prepared to pay more for quality products.

“We aim to build a future portfolio and capabilities that will enable us to meet the evolving needs of Indian consumers,” Chief Financial officer Ritesh Tiwari said. Premium sales already account for a quarter of its overall business and are growing in double digits.

HUL and indeed most fast-moving consumer goods companies have traditionally relied a lot on rural demand to keep the momentum going as a good portion of the products are targeted towards the mass market segment. The slowdown in rural demand and the long recovery process has made the companies, including HUL, change their strategy. Price growth is not an option, at least in the medium term, and it is laying its bet on the premium segment, which is still seeing double-digit growth despite the slowdown in discretionary spend.

For the FMCG market leader, less than 60 per cent of its businesses are gaining market share now and catering to the affluent segment is its plan to claw back that share, which it plans to reach by the end of calendar 2024.

Managing Director and Chief Executive Officer Rohit Jawa pointed out that growth was unevenly distributed. “There is growth in the market. We are going where the growth is, which means investing in segments of the market where there are high levels of growth and wherever we are doing it, at the premium-end and new market making segments with innovation, we are seeing results.” Some categories were seeing triple digit growth, he added.

HUL is also working on bringing in brands from Unilever into India. “We are definitely going to do that, and we are working on entry plans at the right time,” Jawa said. In the past it has brought in Magnum ice cream and Love Beauty Planet. “There are plans, clear plans to extend our portfolio.”