India’s per capita FMCG consumption low compared to other economies: HUL MD

Hindustan Unilever’s (HUL’s) managing director and chief executive officer, Rohit Jawa told investors that India’s per capita FMCG (fast moving consumer goods) consumption when compared to other similar economies is significantly low and within that rural is highly under indexed, post announcing its results.

He also said that premiumisation is bound to accelerate as Indians become more affluent and urban.

“The more affluent population is expected to double by 2027. Naturally, their per capita FMCG consumption is much higher at about 1.5x to 2x compared to national average,” Jawa said.

He believes that the company is well-placed to lead this growth opportunity and each of its three divisions by itself will be larger in size than most of the FMCG companies in the country.

“We are proudly the market leader in more than 85 per cent of our business. We have a wide and a resident portfolio of 50-plus brands, of which 19 brands clock more than Rs 1,000 crores turnover annually. We reach about 3 million outlets directly, of which 2.3 million outlets are covered through our distributor network, and the remaining by our Shakti entrepreneurs in the rural hinterlands,” he told investors.

He spoke about the company’s thrust to grow the core which includes 19 of its large brands through product superiority and winning-led execution. Second is to build categories of the future through market development. Third, HUL has to continue transforming parts of its portfolio through the on-trend demand spaces, especially in beauty and foods. Fourth is to win in channels of the future through brilliant execution and curating a tailor portfolio by leveraging its design-for-channel approach remains an important thrust for the company.

“We will also need to structurally reset our cost base, which will help generate fuel to invest back in growing the business,” he said.

He also explained, “To this end, we’ll continue leveraging our net revenue management and Symphony programs to drive savings across all lines of the P&L (profit & loss account).”

He also said that he is a big believer in the India story and opportunity. “We are the fifth largest economy with a GDP of over 3 trillion, growing at a fast pace and well poised to become the third largest in a few years. The demographics also stack in our favor. 20 per cent of the world’s working population, over 1 billion, reside in India. 10 million gets added every year to the workforce, giving us a huge demographic dividend,” he said.