FMCG companies in India- description and info

FMCG in India

1. 1
FMCG

2. 2
Contents

3. 3
•FMCG Industry Overview
Characteristics of the FMCG industry
Size and Growth
Segments
Share of Rural and Urban demand
Share of General Trade and Modern Trade
Penetration and per capita consumption
Numeric and Weighted Distribution
Some common strategies adopted by FMCG players
Course Contents

4. 4
Category Analysis
Category break-up in terms of different products
Growth of different products within the category
Company Market shares and changes over the years
Brand shares and changes over the years
New launches and key category trends
Course Contents

5. 5
• FMCG Company Analysis
Business Mix
 Growth
 Margins
 Distribution
Analysis of Brands
New Launches in the last 2-3 years and their performance
Focus categories for the future
 M&As – Why and their impact?
•Impact of Modern Retail on FMCG
Course Contents

6. 6
Industry
Characteristics

7. 7
CHARATERISTICS OF FMCG INDUSTRY
•Steady growth industry with less cyclicality
•Diversified categories
•Diversified companies
•MNCs – Hindustan Unilever, Reckitt Benckiser, Procter &
Gamble, Nestle etc
•Pan Indian FMCG companies – ITC, Godrej, Emami, Marico etc
•Regional FMCG companies – Arun Ice creams, Arasan Soap, RSPL
etc
•Unbranded products
•Diversified Distribution Channels
•General Trade
•Modern Trade
•E-commerce
•DTC

8. 8
Size and Growth

9. 9
FMCG: MARKET SIZE AND GROWTH
Indian FMCG industry size is expected to become $220 bn in 2025.
Source: ibef, Statista
Slow Growth due to
•Demonetization
•GST

10. 10
Segments

11. 11
FMCG: SEGMENTAL SHARE
Food and Beverages constitute more than half of the FMCG industry.
Source:
https://www.elearnmarkets.com/blog/sector-fmcg/
•Food & Beverages
Health Food Drink, Coffee, Tea, Biscuits,
Noodles, Chocolates, Soft drinks,
Packaged Atta etc
•Personal Care
Hair Care, Soaps, Deodorants, Oral Care etc
•Household Care
Floor Cleaners, Detergents, Dishwash, Toilet
Cleaners etc

12. 12
Rural Vs Urban

13. 13
Rural markets contribute to 38% of the industry revenues and contribute to
50% of the new store additions between 2000 and 2022
SHARE OF RURAL AND URBAN MARKET
Source:
https://www.business-standard.com/industry/news/fmcg-flavours-better-volumes-and-rural-demand-revival-uptick-in-
2024-123122400203_1.html
https://economictimes.indiatimes.com/industry/cons-products/fmcg/fmcg-industry-faced-consumption-slowdown-in-
urban-markets-degrowth-in-rural-areas-in-2021-nielsen/articleshow/89944642.cms?from=mdr
62%
38%
Urban
Rural

14. 14
SHARE OF MODERN RETAIL IN FMCG
Modern trade constitute 20% of the overall FMCG sales which is
much lower than that of other developing or developed countries.
Source:
1.Industry Reports
2.https://www.indianretailer.com/article/whats-hot/retail-trends/why-traditional-trade-
share-in-grocery-retail-to-fall-by-20-pc-in-next-5-years.a7736/
20%
30%
60%
85%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
India China Malaysia USA
Modern Trade
General Trade
80%
70%
40%
15%

15. 15
PENETRATION AND PER CAPITA CONSUMPTION
•Penetration and per capita consumption are the two important
growth levers for FMCG industry
•Penetration refers to the reach of the category in %
•Per capita consumption refers to the average usage

16. 16
PENETRATION AND PER CAPITA CONSUMPTION
•FMCG companies try to achieve growth either by increasing
penetration or per capita consumption or both;
•Examples
•Launch of Shampoo Sachets
•Launch of pocket size deodrants is an example of the strategy to
increase per capita consumption

17. 17
URBAN PENETRATION OF SELECT CATEGORIES
Even urban penetration of many product categories are
low which indicate high growth potential.
Source: Industry Interactions

18. 18
LOW PER CAPITA CONSUMPTION
India’s per capita consumption is half of Indonesia and
one-fourth of China.
•“per capita FMCG consumption spend in India is amongst the lowest in the
world, giving the industry a long runway for growth. Matching up to
Indonesian levels would grow the market by 2X and to China levels by 4X.”
Sanjiv Mehta, Former CMD, Hindustan
Unilever
Source: https://www.afaqs.com/news/marketing/55364_per-capita-fmcg-consumption-spend-in-india-is-amongst-the-lowest-in-the-world-
sanjiv-mehta-cmd-hindustan-unilever

19. 19
Industry Overview -3
•Numeric Distribution
•Weighted Distribution
•Share Among Handlers

20. 20
•Numeric Distribution is the percentage of the stores handling the product.
•Weighted Distribution : Category sales in the stores handling product weighted by
total category sales.
•Share among Handlers is the market share of the product in that outlet.
Numeric Distribution, Weighted Distribution and Share among Handlers

21. 21
Exercise
In one area, there are 2 stores selling biscuits. Store 1 sell 75 units and Store 2 sell 25 units of
biscuits. ITC’s biscuits are available in Store 1 but not in Store 2. Britannia’s biscuits are available
in Store 2 but not in Store 1. Which company has got the better distribution?
•Numeric Distribution (for both ITC and Britannia) = 50%
•Weighted Distribution for ITC = 75/100 = 75%
•Weighted Distribution for Britannia =25/100 = 25%
Weighted distribution indicate the quality of distribution and higher weighted
distribution means stronger distribution network

22. 22
Outlet
Category
Sales
Maggie
Sales
Outlet 110000  
Outlet 23000 700
Outlet 31000 500
Outlet 44000  
Outlet 52000 200
Total 20000 1400
Numeric Distribution = Number of Outlets Selling Maggie Soups = 3 = 60%
Total Category Outlets 5
Weighted Distribution
= Sales Volume of the category in Stores selling Maggie Soups = 6000 = 30%
Total Sales Volume of Category in all outlets 20000
Share of Handlers = Volume of Maggie Sales in that Outlet
Total Volume of the Category in that Outlet
Category : Soups
Brand : Maggie
Region: X
Share of
Handlers
 
23%
50%
 
10%
ILLUSTRATION: NUMERIC DISTRIBUTION, WEIGHTED
DISTRIBUTION AND SHARE OF HANDLERS

23. 23
Some common
Strategies adopted in
FMCG industry

24. 24
SOME COMMON STRATEGIES ADOPTED BY FMCG
COMPANIES
•Frequent New Product Introduction
(NPI)
•New Categories
•New Brands in the existing Categories
•New Variants in the existing brands

25. 25
SOME COMMON STRATEGIES ADOPTED BY FMCG
COMPANIES
•High spend on advertising
•FMCG brands are the biggest
contributors to advertising spends
across channels with 34% share,
followed by e-commerce at 14% and
automotive at 7%.  
•Advertising expenses constitute
around 12-15% of the FMCG company
revenues and For new brands (0-5
years), advertising expenses go up to
22-25% of the revenues
•Source: https://bestmediainfo.com/2022/02/fmcg-ad-spending-
growth-remains-muted-in-q3-fy-21-22
Source: https://www-statista-
com.eu1.proxy.openathens.net/statistics/894075/india-
share-of-fmcg-advertising-spend-by-channel/

26. 26
SOME COMMON STRATEGIES ADOPTED BY FMCG
COMPANIES
•WMI (Win in Many Indias)
Target growth through offering products in multiple categories, multiple geographies,
multiple channels
Multiple brands in a category
Pan India brands and Region specific brands
Brands across all price points – Premium, mid-market and mass market
Personalized offerings
Products in smaller package sizes
Bundling
•Expanding Distribution
•Battle for Shelf Space
•Share of Shelf
•Location in Shelf

27. 27
SOME COMMON STRATEGIES ADOPTED BY FMCG
COMPANIES
•Green initiatives (Ex: Smart Fill machines https://www.youtube.com/watch?
v=vs4kqLryjJs)
•DTC
•Ex: Mamaearth, Sugar Cosmetics, MyGlamm, Wow Skin science

28. 28
Category Analysis

29. 29
Hair Care

30. 30
Hair Care
44%
29%
19%
5%2%
hair oils
Shampoos and Conditioners
Colourants
Saloon Haircare
Styling agents
Category Size : Rs. 30,000 Crores (FY 2024)
Source:
Euromonitor
Estimates from Company Documents , Media Reports and Industry sources

31. 31
HAIR-CARE : GROWTH
Category
CAGR (2019-24)Expected CAGR
(2024-29)
Hair Oils
7% 7%-9%
Shampoos and
Conditioners
6% 4 %to 5%
Colourants 8% 9% to 10%%
Saloon Hair Care 11% 10% to 12%
Total 7% 8% to 9%
Hair care category expected to maintain it’s high growth with Saloon Hair
Care leading the pack
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://www.mordorintelligence.com/industry-reports/india-hair-care-and-styling-products-market-industry

32. 32
HAIR-CARE : COMPANY MARKET SHARES
Hair care category is quite fragmented. Top 6 companies put together
account for around 60% of the share.
Company Market Shares
2012 2024
HUL 15% 16.5%
Marico 7% 16.1%
L'Oréal India Pvt Ltd 7% 9%
Dabur 10% 7%
Procter & Gamble 9% 6%
Emami 5% 4%
Source:
Estimates from Company Documents , Media Reports and Industry sources

33. 33
India’s Coconut Oil War

34. 34
•Some of the major acquisitions were:
•Brooke Bond
•Lipton
•Kissan
•Ponds
•Kimberly Clark
•Lakme
•Tomco (Tata Oil Mills Company)
•HUL and also it’s parent company were on
acquisition spree in 1980s and 1990s.

35. 35
•Tomco had several popular brands – Hamam, Okay, Moti, Magic etc
•Tomco also had one coconut oil brand – Nihar though it’s market share was
only 7%
•Marico’s parachute was the market leader in Coconut oil segment with a market
share of 48%
•HUL wanted to buy Parachute brand and add it’s list of acquisitions but Harsh
Mariwala, Founder and Chairman of Marico refused to sell.
•Parachute brand contributed to more than 60% of the revenue of Marico.
TOMCO’s acquisition

36. 36
•HUL launched a full-blown assault on Parachute through it’s
acquired brand Nihar.
•Though Nihar had only 7% share while Parachute had 48% share
in Cocunut oil, HUL outspent Parachute on advertising by 2: 1
ratio
•HUL significantly increased discounts to retailers giving them a
35% margin on Nihar against Marico’s 10% and displaced
Parachute from many retail stores.
•Many industry insiders thought that the best option for Marico
was to sell Parachute brand to HUL
Coconut Oil War

37. 37
•Parachute was Marico’s main brand.
•They had in-depth knowledge of branded coconut oil:
consumer insights, sourcing expertise, a well-established
distribution and marketing set-up, and the significant cost
optimization achieved across the value chain.
•In contrast, for Hindustan Lever, this was one among several
product categories that they had in India and it was far from
being a significant component in their portfolio.
Marico had a better understanding of Coconut
oil business

38. 38
•Mr. Harsh Mariwala met with Mr. Karsanbhai Patel of Nirma
•Ran a massive TV ad campaign focusing on the importance of coconut in
Indian tradition.
•The campaign struck a strong emotional chord with the consumers.
•Till then Marico’s distribution was confined to urban areas
•Due to tough competition from HUL expanded the distribution in rural
areas. Appointed more than 300 super-distributors to sell only to rural
markets and compensated them for additional costs.
•Incentivised the sales force
•Created a war room to take quick decisions
•Launched rejuvenated parachute brand with new packaging
How Marico responded to HUL’s assault?

39. 39
•By 2006, Parachute’s market share increased from 48% to 52%
•Though Nihar shared increased from 7% to 15% in early 2000s, it’s share dropped to
8% in 2006
•HUL requested Marico to take over Nihar brand.
•Marico acquired Nihar brand for Rs. 216 crore in 2006.
•Strengthened their position in Hair care by widening the portfolio:
Hair oils – Parachute Coconut Oil, Parachute Advanced, Nihar Naturals and Livon
Silky Potion.
Styling agents - Set Wet, Parachute After Shower and True Roots Botanical Hair
Tonic.
Shampoo – Hair and Care
Result of the Coconut Oil war

40. 40
Why Hair Care category is very
fragmented?

41. 41
Why the Hair care category is fragmented in terms of Market Share?
•Different companies have got their own niche within Hair care
•Marico’s dominance primarily come from their strength in Hair oils
•HUL is the market leader in shampoo segment within Haircare and has Clinic Plus, Dove,
Sunsilk, Clear and TRESemmé brands.
•L’Oreal is the dominant player in the Saloon Hair category

42. 42
HAIR-CARE : BRAND SHARES
Parachute, Clinic Plus and Dove are the 3 biggest Hair-care
brands.
Brand Company Market Shares
2012 2023
Parachute
Coconut Oil
Marico 5% 9%
Clinic Plus HUL 8% 5.5%
Dove HUL 2.5% 5%
Head &
Shoulders
P & G 5.0% 3.5%
Bajaj Bajaj Consumer Care 3% 3.5%
Source:
Estimates from Company Documents , Media Reports and Industry sources

43. 43
KEY TRENDS
•Growth of Ayurvedic natural oils
According to Euromonitor’s Product Claims and Positioning data, in 2022 hair care
SKUs with a “natural” positioning in India accounted for 38% of the total, which is a
significantly higher percentage compared with the overall Asia Pacific region, where
only 15% of products carried the same positioning.

44. 44
KEY TRENDS
HAIRFALL – A BIG OPPORTUNITY
•Indian hair care brands are actively addressing the common concern of hair fall by offering
specialised products that target this issue.
•One such brand is WOW Skin Science, which has gained popularity for its range of hair care
products specifically designed to address hair fall with ingredients such as biotin, keratin, and
onion extract.
•Another Indian brand, Mamaearth, had also introduced hair care products with natural
ingredients such as onion oil, which has become one of its flagship products.
•Marico expanded its presence in the anti hair fall segment on the digital platform by launching
Parachute Advanced Onion Hair Oil and Marico Jataa for Men 100% Ayurvedic Hair Growth Oil.

45. 45
KEY TRENDS
Ingredient-led product positioning
•Consumers now prioritise specific ingredients, based on their individual hair care needs.
•Different ingredients have gained popularity for addressing various hair concerns, such as onion
for combating hair fall, almond oil for overall nourishment and strengthening, and argan oil for
moisturising purposes.
•Brands promoting SLS and paraben-free hair care products (Ex: Body Shop, Khadi, Forest
Essentials)

46. 46
KEY TRENDS
SHAMPOO BARS
•Shampoo bars might emerge as a new product format in hair care in India, as consumers
increasingly prioritize sustainable and eco-friendly beauty practices.
•Currently, an Indian D2C brand, Earth Rhythm, offers a diverse range of shampoo bars which
cater to the different hair types and needs of consumers.

47. 47
KEY TRENDS
Digital First Brands
•Digital-first brands in hair care focus on creating an online presence through e-commerce
websites, social media platforms, and digital marketing strategies.
•Example: Bajaj launched two digital brands – Bajaj 100% Pure and Natyv Soul
•The trend of launching digital-first brands took prominence during the COVID-19 pandemic,
when companies were able to utilise technology to launch new products online.
•Having digital-first brands provides companies with a significant advantage in attracting young
consumers while minimising costs compared with traditional distribution channels.

48. 48
KEY TRENDS
Many concerns about hair - volumising, dryness, heat, moisturising,
shine, etc
Return to high growth of salons as covid pandemic subside.
Personalization based on hair type (Ex: Bare Anatomy, Freewill)
Personalization based on Dosha type (Ex: Vedix)
Large number of variants – pollution control, weather based etc.
Customers are also willing to spend more for hair care

49. 49
Bath and Shower

50. 50
BATH AND SHOWER
88%
5%
2% 5%
Bar Soap Talcum Powder
Body Wash Liquid Soap/Hand Sanitizer
Category Size : Rs. 32,000 Crores (FY 2024)
Source:
Estimates from Company Documents , Media Reports and Industry Interactions

51. 51
BATH AND SHOWER : GROWTH
Body wash and Liquid Soap will drive the growth of the category.
Products CAGR (2019 -24)Expected CAGR
(2024-29)
Bar Soap 7% 4% to 6%
Body Wash 15% 16% to 18%
Liquid Soap/Hand
Sanitizer
14% 11% to 13%
Talcum Powder -0.6% -3% to -5%%
Overall Bath and
Shower
7% 8 to 10%
Source:
 Estimates from Company Documents , Media Reports and Industry sources

52. 52
BATH AND SHOWER : COMPANY MARKET SHARES
HUL, Reckits, Wipro and Godrej and Reckitts
holds more than 70% share
Company 2015 2024
HUL 43% 37.2%
Godrej 10% 10.1%
Wipro 6.5% 10%
Reckitts Benckiser7.5% 9.7%
ITC 2% 4%
Nirma 7% 1%
Source:
 Estimates from Company Documents , Media Reports and Industry sources

53. 53
BATH AND SHOWER : BRAND SHARES
Top 6 brands constitute 50% of the bath and shower
category.
Brand Company Market Shares
2015 2024
Lifebuoy HUL 14% 11%
Santoor Wipro 7% 10%
Dettol Reckitts 8% 10%
Lux HUL 12% 10%
Godrej No.1 GCPL 6% 7%
Source:
 Estimates from Company Documents , Media Reports and Industry sources

54. 54
NEW LAUNCHES AND KEY TRENDS
•Attribute and Benefits based competition
•Ex: PH battle (Seabamed vs HUL vs Brinton)
https://www.youtube.com/watch?v=0kmA5GucCAU
https://www.youtube.com/watch?v=_vSRdwdGDAI
 https://www.youtube.com/watch?v=7NmXilDJ8gc
•Products with multiple attributes
Wipro’s soap brand variant Santoor Glycerine with Vitamins.
Godrej consumer products launched Cinthol Confidence + as a health soap with
deodorising properties.

55. 55
NEW LAUNCHES AND KEY TRENDS
•Products with new attributes
•Dove Gentle Exfoliating Body Wash
•Nature based products (Herbal/Ayurvedic)
•Ex: Mysore Sandal Millenium (150 g soap priced @ Rs. 810 )
•Gender specific products
•Trading up of lower middle and middle income households from bar soap to body
wash / shower gel.
•Talcum powder decline is going to continue due to substitutes and health concerns.

56. 56
Deodorants

57. 57
Deodorant
22%
1%
77%
Liquid Deodorants
(Pumps)
Roll ons
Sprays
Category Size : Rs. 5,500 Crores (FY 2023)
Source:
Estimates from Company Documents , Media Reports and Industry sources

58. 58
DEODRANTS : GROWTH
Category
CAGR (2018-
23)
Expected CAGR
(2023-27)
Pumps 14% 19% to 22%
Roll Ons 10% 12% to 14%
Sprays 9% 11% to 13%
Total 12% 14% to 16%
Deodorant category is expected to grow at a healthy
rate due to low level of penetration.
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://timesofindia.indiatimes.com/business/india-business/itc-eyes-top-position-in-deo-market/articleshow/
68623268.cms

59. 59
DEODORANT : COMPANY MARKET SHARES
Company Market Shares
2013 2023
Vini Cosmetics Pvt Ltd 0% 21%
ITC 0% 11%
Hindustan Unilever Ltd 30% 9%
Nivea India Pvt Ltd 6% 8%
Helen Curtis India 2% 6%
•Vini Cosmetics and ITC
which did not even exist 10
years ago are the top 2
players.
•HUL’s share had dropped
significantly from 30% to 9%
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://timesofindia.indiatimes.com/business/india-business/itc-eyes-top-position-in-deo-market/articleshow/
68623268.cms
Deodorant category has been undergoing a major
churn in terms of market share.

60. 60
DEODORANT : BRAND SHARES
Fogg, Engage and Park Avenue are the 3 biggest brands.
Brand Company Market Shares
2013 2023
Fogg Vini Cosmetics Pvt Ltd 0% 21%
Engage ITC 0% 11%
Park AvenueHelen Curtis India 2% 6.5%
Wild StoneMcNroe Chemicals Pvt
Ltd
10% 6%
Axe HUL 24% 5.8%
Source:
Estimates from Company Documents , Media Reports and Industry sources
https://timesofindia.indiatimes.com/business/india-business/itc-eyes-top-position-in-deo-market/
articleshow/68623268.cms

61. 61
KEY TRENDS
HUL lost bulk of it’s market share in the last decade from 30% to 9% despite having 6
brands – Axe, Dove, Denim, Rexona, DIY, Sure due to:
 Wrong promotional strategy for Axe
 Failure of brand extensions of Dove, Denim and Rexona
 Failure of New Launches like DIY, Sure
 Failure to bring innovation in products or promotions.
ITC introduced the Pocket size Deo in it’s Engage brand which is a big hit.
Fogg made huge gains through it’s unique liquid deodorant, auto-pause mechanism and
innovative marketing (Ex: Deodorant as a Gift product)

62. 62
On-Trade Vs Off-Trade

63. 63
SOFT DRINKS : OFF-TRADE VS ON-TRADE BY VALUE
Almost 46% of Soft drinks sales by value are to on-trade
channel.
Products Off-trade On-trade
Bottled Water 49% 51%
Carbonates 41% 59%
Fruits and vegetable
Juices 77% 23%
Concentrates 100%
Sports and Energy
Drinks 71% 29%
Overall Soft drinks 54% 46%
Note:
1.On-trade is selling to hotels , restaurants, pubs. (Ex: Coca Cola-
McD, Pepsi-Pizzahut)
2.Off-trade is sales to the end customers through retail outlets.

64. 64
Company Analysis

65. KEY PARAMETERS FOR FMCG COMPANY ANALYSIS
 Business Mix
 Growth and Margins
 Distribution
Analysis of Brands
New Launches in the last 2-3 years and their performance
Focus categories for the future
 M&As – Why and their impact?
Key Initiatives of the company

66. 66
Hindustan Unilever
Limited

67. 67
Overview, Business
Mix, Growth and
Margins

68. HUL, among MNC peers is the largest contributor to overall group
turnover
HUL: THE JEWEL IN UNILEVER’S CROWN
•90% of Indians use at-least one HUL product.
•India is the second biggest market for Unilever in
value after US.(21% of global revenue) and the largest
by Volume
•HUL’s market capitalization is 50% of Unilever’s
market capitalization
Company
Indian Revenue
as % of Global
Revenues
Hindustan
Unilever 13%
Reckitt Benckiser
(India) 8%
Colgate Palmolive
(India) 4%
Mondelez (India) 3%
Procter & Gamble
(India) 2%
Nestle (India) 2%
L'oreal (India) 1%
Source: Company Reports, https://www.hul.co.in/files/b690a76e-f570-48c1-9308-3c473c41558f/india-will-overtake-us-as-unilevers-
largest-business-says-hul-chief.pdf

69. Personal Care products contribute 39% of HUL ‘s Sales
but close to 50% of it’s profits.
BUSINESS MIX: REVENUE AND PROFIT CONTRIBUTION
Beauty
and
Persona
l Care,
39%
Home
care,
36%
Food &
Refresh
ments,
25%
Beauty
and
Persona
l Care,
48%
Home
care,
29%
Food &
Refresh
ments,
23%
Revenue Contribution
EBITDA Contribution
Source: Company Documents

70. REVENUE GROWTH TRENDS
HUL annual growth increased from 8.4% between 2004 to 2010
to 8.7% between 2010 and 2024
Source: Company Documents
10.8
11.9
13
14.8
16.5
20.220.5
22.8
26.6
28.9
32.132.9
33.934.6
37.738.2
45.3
50.3
58.1
61.4
0
10
20
30
40
50
60
70
FY
2004
FY
2005
FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
FY
2012
FY
2013
FY
2014
FY
2015
FY
2016
FY
2017
FY
2018
FY
2019
FY
2020
FY
2021
FY
2022
FY
2023
FY
2024
CAGR : 8.4%
CAGR : 8.7%
Revenue in Rs. 000 crs

71. EBITDA Margin in %
HUL’s margin was hovering around 13-15% between 2004 and
2010 but on an upward trend since 2010.
Source: Company Documents
15%
13%
14%
15%15%
16%
13%
17%17%
18%
19%
20%20%
21%
22%
23%23%
24%
0%
5%
10%
15%
20%
25%
FY
2004
FY
2006
FY
2008
FY
2010
FY
2013
FY
2015
FY
2017
FY
2019
FY
2023

72. HUL has been able to increase the margins for each of its
segments.
BUSINESS MIX : SEGMENT WISE MARGINS
Source: Company Documents
EBITDA in % FY 17 FY 24
Beauty and Personal
Care
23.6 26.1
Home Care 11.1 18.7
Foods and
Refreshment
14.1 17.9

73. 73
Analysis of Distribution
and Brands

74. 74
DISTRIBUTION: GENERAL TRADE AND MODERN TRADE
HUL has strongest distribution in both General and
Modern Trade
Company General Trade
Reach
Modern Trade
Sales
Contribution
HUL 9.5 mn 23%
Dabur 7.7 mn 18%
ITC 7 mn 17%
GCPL 6.8 mn 14%
Coalgate 5.7 mn 13%
Marico 5.3 mn 22%
Source: Company Documents, Industry Sources

75. 75
HUL’s brands straddle the entire price pyramid across, different
categories.
Winning in many Indias (WMI) is one of the important
strategies of HUL.
Premium Brands Surf, Dove, Taj Mahal, Lipton
Examples
Mid-priced Brands
Rin, Sunlight, Pepsodent, Bru, 3
Roses
Mass Brands Wheel, Lifebuoy, Taaza, Sunsilk

76. 76
PERFORMANCE OF TOP BRANDS
Source:
Company Documents
https://www.livemint.com/companies/news/huls-dove-rin-vim-brands-enter-rs-2-000-crore-
club-in-fy22-11651132046035.html
2011 2024
No. of Brands with Annual
Revenue of more than Rs. 5000
crores
0 2 (Surf Exel, Brooke
Bonde)
No. of Brands with Annual
Revenue of Rs. 2000 crores to
Rs. 5000 crores
0 8 (Wheel, Glow &
Lovely, Lifebuoy,
Horlicks, Dove, Vim,
Rin, Clinic Plus)
No. of Brands with Annual
Revenue of Rs. 1000 crores to
Rs. 2000 crores
7 (Surf Exel,
Wheel, Brooke
Bond, Fair &
Lovely,
Lifebuoy, Lux,
Rin)
9 (Lakme, Ponds, Lux,
Lipton, Boost, Comfort,
Kissan, Bru, vaseline)

77. 77
TOP ITC BRANDS
While 10 of the top 11HUL brands belong to Personal care, 5 of the
top 6 FMCG brands of ITC belong to Food and Refreshments.
•Ashirwad Atta > Rs. 6500 crores
•Sunfeast biscuits > Rs. 4500 crores
•Bingo Chips and Snacks > Rs. 3000 crores
•Yippie Noodles > Rs. 1500 crores
•Mint-o, Candyman, Gum on > Rs. 750 crores
•Vivel > Rs. 600 crores
Source: Company Documents

78. Source: Company Analysis
PERFORMANCE OF NEW LAUNCHES
Brands launched in the
last few years
Category Performance
Indulekha Hair oil, Shampoo
Excellent or
Good
Lever Ayush Beauty and Personal Care
Comfort Fabric Conditioners
Love and Beauty PlanetBeauty and Personal Care
Love and Care Liquid Fabric Wash
Magnum Ice Cream
Pure Derm Shampoo
Cif Surface Cleaner
Poor
Citra Skin Care
Sure Deodorants

79. 79
HUL is betting on 9 categories for future growth.
Source: Company Reports
FUTURE CATEGORIES
Facewash, Instant
Coffee, Handwash
Explode
Soups, Hair
conditioner, Liquid
Detergents, Fabric
Conditioners
Accelerate
Bodywash, Liquid
Dishwash
Seed

80. 80
Analysis of recent
M&As of HUL

81. 81
Source: Company
RECENT ACQUISITIONS

82. 82
INDULEKHA
•Acquired in April 2016 for Rs330 crs, the brand had
an annual turnover of Rs100 crs
•In 2019, the brand clocked a turnover of Rs400 crs
(4x) and the Valuation increased to Rs. 2000 crs
(6.8x)
•HUL converted a regional brand into Pan India
brand through it’s distribution and marketing.
Indulekha is the most expensive even
among Ayurvedic oils
Source: https://www.business-standard.com/article/companies/hul-s-
indulekha-enters-rs-2-000-cr-club-three-years-after-acquisition-
119082301346_1.html

83. 83
GSK MERGER
•HUL-GSK merger is the biggest in the Indian consumer goods space.
•GSK major brands Horlicks, Boost, Viva and Maltova
•Health Food Drinks (HFD) is an under penetrated category and HUL aims
to grow the category more than 5x
•Post merger, HUL launched Rs. 2 , Rs. 5 and Rs. 10 sachets of
Horlicks and Boost to increase penetration.
•Distribution Synergies
•Strengthening of GSK brands in North and West where Mondelez is the
leader.
•Cross Promotions
•Cost Reduction (GSK had very high operating Cost structure )

84. 84
Key Initiatives of HUL

85. 85
•Project Shakti
•Project Shikhar

86. 86
Project Shakti

87. 87
PROJECT SHAKTI: MOTHER OF ALL RURAL
MARKETING SCHEMES
https://www.youtube.com/watch?v=Idu-tFCle2A

88. 88
PROJECT SHAKTI: MOTHER OF ALL RURAL
MARKETING SCHEMES
Note: https://www.hul.co.in/planet-and-society/case-studies/enhancing-livelihoods-through-project-shakti//
•Launched in 2001 as CSR to empower Rural Women.
•Rural women from poor background villages were appointed as HUL Distributors –
“Shakti Ammas”
•Training to them would be provided by HUL’s team of Rural Sales Promoters (RSPs)
in various areas - sales, marketing, accounting, fundamentals and problem-solving
techniques as well as improving their communication and negotiation skills.

89. 89
PROJECT SHAKTI: MOTHER OF ALL RURAL
MARKETING SCHEMES
Note: https://www.hul.co.in/planet-and-society/case-studies/enhancing-livelihoods-through-project-shakti//
•In 2023, HUL had more than 2,00,000 Shakti Ammas (SAs) covering 22 states.
•Through Project Shakti, HUL reached more than 4 lacs of the 6.5 lacs villages in India.
•Sales through Project Shakti is in the range of Rs. 3800 crs to Rs. 4200 crs which is around 7-
8% of the company’s turnover.
•During Covid lockdown, Project Shakti has helped HUL to ensure uninterrupted supply of
products in rural India.
•Though it started as CSR, Project Shakti now gives huge strategic advantage to HUL and
contributing to the company’s mainstream business.

90. 90
Shikhar app
Digital Leap for Small Retailers

91. 91
Shikhar – Not just an ordering app
•Through Shikhar app, Kirana Stores could place orders with HUL directly, without the
involvement of distributors and sales personnel.
•More than an order placement app, Shikhar app empower the shopkeepers in several ways:
Retailers could see different offers and schemes that the company was offering at any
point in time.
They get notifications about the details of the orders, dispatch schedules, and delivery
time.
Shopkeepers could also see the products that were in demand in their locality.
Shikhar app also give recommendations to shopkeepers on which products they needed
to stock to improve sales.

92. 92
Shikhar app – How it works?
•SHOPKHATA
Shikhar also has an additional feature called ShopKhata.
This enables the retailers to maintain records of the goods sold on credit and the amount
received.
Through ShopKhata, the shopkeepers could send reminders to the customers about payments
due as well.

93. 93
Shikhar app – How it works?
•Credit Availability through SBI partnership
According to CEO of HUL,
“In India, as many as 10 million retailers faced problems in accessing credit because of their
informal operation and non-adoption of digital technology”
HUL’s retailers  who use the company's Shikhar app will be able to avail SBI’s instant
paperless overdraft facility of up to 50,000 to retailers to help them settle their bills
₹
with distributors.
This has been enabled through SBI’s YONO (You Only Need One) app.
HUL-SBI partnership would greatly help small retailers in accessing credit.

94. 94
Shikhar app in Numbers
•Over 5,00,000 retailers are ordering through Shikhar app.
•This constitute over 6% of HUL’s massive reach of 9 mn outlets.
•60 per cent of the retailers in towns with a population of over 5,00,000 started using Shikhar
app.
•Value of orders placed through Shikhar app has been doubling every year since it’s launch in
2020.
Source:
•News Reports
•https://bloncampus.thehindubusinessline.com/case-studies/how-hul-enabled-small-retailers-to-take-the-digital-
leap/article34812609.ece

95. 95

96. 96
NEW PECKING ORDER IN FMCG INDUSTRY
Patanjali became third largest FMCG company in India in 2017.
Company Revenue in Rs.
Cr 2017
HUL 30,783
ITC (FMCG) 10,337
Patanjali (excluding pharmacy) 9,200
Nestle India 9,159
Godrej Consumer Products 9,134
Britannia 8,844
Dabur 7,691
Marico 5,918
Colgate-Palmolive 4,010
Emami 2,480
Source: Capitaline, Business Standard

97. 97
PATANJALI AYURVED: FMCG REVENUES
While Patanjali has grown almost 92x between FY 11 and FY 17
but it’s growth suffered for the next couple of years before
marginally recovering since 2019.
Source:
ET, Business Standard and other Media Reports
100
1184
2006
5000
9200
81368330
9022
9810
10664
0
2000
4000
6000
8000
10000
12000
R
s
.

C
r
o
r
e
s

98. 98
1.How Patanjali grew very fast between 2011 and 2017?
2.Why their growth stagnating after 2017?
3.Analysis of Ruchi Soya acquisition

99. 99
How Patanjali grew very fast between 2011 and 2017?

100. 100
FLANKER STRATEGY
Alternative Distribution System
Ayurvedic products
Low Price
Less Advertisements and promotion costs
Branded House Strategy
Combination of Yoga, Baba Ramdev’s popularity, Spirituality, Nationalism
and Religion
Initially entered less competitive categories
Launched products across many categories in short time
FACTORS CONTRIBUTING TO PATANJALI’S SUCCESS
BETWEEN 2011 TO 2017

101. 101
PRESENCE ACROSS CATEGORIES
Source: https://unlistedzone.com/analysis-of-patanjali-an-indian-fmcg-giant-of-baba-ramdev/
•Patanjali’s top 3
categories - Cow(Ghee)
 (Rs. 1467 Crores),
followed by
Toothpaste (Rs. 940
Crores) and them
Shampoo (Rs. 850
Crores).
•These three products
contributes ~35% of the
total sales.

102. 102
Why Patanjali’s growth stagnated from 2017?

103. 103
PATANJALI AYURVED: FMCG REVENUES
While Patanjali has grown almost 92x between FY 11 and FY 17
but it’s growth suffered for the next couple of years before
marginally recovering since 2019.
Source:
ET, Business Standard and other Media Reports
100
1184
2006
5000
9200
81368330
9022
9810
10664
0
2000
4000
6000
8000
10000
12000
R
s
.

C
r
o
r
e
s

104. 104
•Lack of readiness of the Channel for GST compliance in 2017
•Other strong FMCG companies increased their focus on Ayurvedic and
Nature based products.
•Quality issues on certain products and risk of branded house strategy
•Serious Process Issues
•Weak Distribution
•Poor Replenishment– Many retailers report frequent stockouts
•Receivables of 86 days
1
much higher than the industry average of 14 to
21 days.
• Excessive Diversification intentions(Logistics, SIM cards, Solar panels,
Phones, Jeans etc)
•Fail to become market leader or achieve critical market share in many of the
categories
Source:
1. https://unlistedzone.com/analysis-of-patanjali-an-indian-fmcg-giant-of-baba-ramdev/

105. 105
Acquisition of Ruchi Soya

106. 106
•Ruchi Soya had strong core business portfolio.
•It landed into trouble because the earlier promoters made huge losses in trading
activities and in their international business.
•This led to debt in their core business and the company had to go to insolvency
process.
•Patanjali acquired Ruchi Soya in 2019 for Rs. 4350 crores under insolvency process.
•After acquisition, rebranded as Patanjali Foods.
OVERVIEW

107. 107
Why Patanjali acquired Ruchi Soya?
Portfolio of established
brands
•Strong presence in cooking oils including mustard, sunflower,
palm, cottonseed and groundnut oil.
•Robust brands portfolio of Mahakosh, Ruchi Gold, Ruchi
Star, Sunrich, Soyumm, Tulsi, Ruchi No.1, Bakefat, Avanti,
and vanaspati and other brands, are well positioned in the
market.
•Ruchi Gold is India’s highest selling palm oil brand.
Strong backward linkages
•One of the largest integrated oil seed solvent extraction and
edible oil refining companies in India.
•The largest oil palm plantation company in India, with
allocated area of ~5 lakh hectares, of which ~60,000 hectares is
currently developed.
Leader in soya foods
•Pioneered soya chunks with a leading ~40% market share in
India through its brand ‘Nutrela’.
•Exports Soya products to more than 31 countries

108. 108
Ruchi Soya Turnaround
•Professional Management through big ticket hiring:
•Hired former Reliance Retail and Cargill Chief Executive, Sanjeev Asthana, as CEO,
•Hired Sanjeev Khanna, who had previously done stints with ITC, Metro Cash &
Carry and BigBasket, as COO.
•Improved Operations
•Prior to takeover, 12 out of the 23 manufacturing facilities of Ruchi Soya were
functional.
•More than 20 plants became operational by 2022
•Refining Capacity utilization increased from 40-50% to 60-65%
•Crushing Capacity utilization increased from 30% to 50%
Source:
https://www.businesstoday.in/interactive/immersive/patanjali-ramdev-ruchi-soya-fmcg-company/
Media and Company Reports
Industry Interactions

109. 109
Ruchi Soya Turnaround
•Strengthened distribution:
•Added 2400 new distributors
•Launched an app called BPos, which has helped retailers to place order online and resolved
many supply chain issues.
•Built personal rapport with distributors through face-to-face meetings
Source:
https://www.businesstoday.in/interactive/immersive/patanjali-ramdev-ruchi-soya-fmcg-company/
Media and Company Reports
Industry Interactions
•Towards profitability:
•Ruchi Soya's commodity products generate low margins in the range of 6-7% while their
branded business like Nutrela generate 20% to 25% margins
•After acquisition, Patanjali has increased the focus on branded business
•Targeting to achieve 80% of revenues from branded business.

110. 110
Patanjali delivered impressive financial performance of
Ruchi Soya after it’s acquisition.
Source:
Company Reports
FINANCIAL PERFORMANCE
Rs. CroreFY 20 FY 21 FY 22 FY 24
Net Sales13,117.816,318.624,205.431,721
EBITDA 400.9 954 1487 1512
EBITDA
Margin %
3.1% 5.8% 6.1% 4.8%
Net Profit224 680 806 765.2

111. Ruchi Soya’s stock turned a multi-bagger after the
acquisition by Patanjali.
0
500
1000
1500
2019 June 18, 2024
Source: Company Reports
https://www.business-standard.com/article/companies/patanjali-group-eyes-rs-1-trillion-turnover-over-the-
next-5-7-years-122091601256_1.html
6.88
1455
Share Price in Rs.
0
10000
20000
30000
40000
50000
60000
2019 June 18, 2024
216
52,730
Market Cap in Rs. crores

112. 112
Impact of Modern
Retail on FMCG

113. 113
SHARE OF MODERN RETAIL IN FMCG
Modern trade constitute 15% of the overall FMCG sales which is
much lower than that of other developing or developed countries.
Source:
1.Industry Reports
2.https://www.indianretailer.com/article/whats-hot/retail-trends/why-traditional-trade-
share-in-grocery-retail-to-fall-by-20-pc-in-next-5-years.a7736/
15%
30%
60%
85%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
India China Malaysia USA
Modern Trade
General Trade
85%
70%
40%
15%

114. 114
SHARE IN MODERN TRADE TRENDS
Share of modern trade in FMCG has been increasing steadily.
Source:
1.Industry Reports
2.https://www.indianretailer.com/article/whats-hot/retail-trends/why-traditional-trade-
share-in-grocery-retail-to-fall-by-20-pc-in-next-5-years.a7736/
0%
5%
10%
15%
20%
25%
30%
2000 2010 2020 2030E
1%
5%
15%
25%-30%

115. 115
Impact of Modern Retail on FMCG
Pros
•One more distribution
Channel
•Modern retail can increase
the sales due to better
visual merchandising and
Store level activation
•Less distribution cost
Cons
•Shift in Bargaining power
•Private Labels
•Channel Conflicts with
General Trade

116. 116
Data Source for FMCG

117. 117
•Equity Analyst reports (Edelweiss, HDFC Securities, Prabhudas
Liladhar, Nirmal Bang, Nomura, Motilal Oswal etc).
•Equity Analysts reports can be accessed for free at Trendlyne (
https://trendlyne.com), ET intelligence and websites of Equity
Analyst Companies
•Annual Reports of FMCG companies
•Statista
•Euromonitor
•CMIE
•ET intelligence, ET Prime
•https://the-ken.com
•Many other databases
•Talk to the people from the industry (Ex: your alumni)
•Regular reading of business dailies