'We are now optimising our investments where there is more return on investment for growth. That includes modern trade, e-commerce, and the premium part of the portfolio.'
Hindustan Unilever (HUL) expects volume recovery both for the company and the fast-moving consumer goods industry, says Ritesh Tiwari, chief financial officer at HUL.
In an interview with Sharleen D'Souza/Business Standard in Mumbai, he talks about the firm's plan to bring more Unilever brands to India.
How will you drive volume growth from here?
Our objective is to put growth on the table.
We go where the consumer, growth, and money are.
Premium is one of the growth opportunities, and we are doubling down on premium.
Rural is another growth opportunity.
Although currently, urban areas contribute more to growth than rural, there is no reason why rural areas should not contribute to FMCG consumption.
In the past quarter, we have seen signs of recovery with rural areas growing, albeit on a declining base from the same period last year.
Growth on a two-year compound annual growth rate basis is positive.
Our brands are strong, our product quality is superior, and the price point needs to reflect the quality.
Staying true to our business model is paying off.
What is going to be the main focus for HUL: premium share gain or reviving the mass end of the market?
One-third of HUL's business is in the premium space, a little more than one-third is in the mass segment, and a little less than one-third is in the middle segment.
In the short run, we will not see high growth from the mass segment.
However, as rural areas recover, the mass segment will also recover.
Nevertheless, the premium segment and urban markets have led to recent growth.
We are not changing our position in the mass segment.
It's just that the growth expectation from there will be lower compared to the expectation of growth from the premium segment for the next few quarters as this equilibrium starts to establish.
Our plan is to win in many Indias.
We are now optimising our investments where there is more return on investment for growth.
That includes modern trade, e-commerce, and the premium part of the portfolio.
Feature Presentation: Aslam Hunani/Rediff.com
