The GlaxoSmithKline Consumer Healthcare Limited merger with Hindustan Unilever heralds a new milestone in India’s nutrition story.
‘What’s good for India is good for Hindustan Unilever’ was one of the key outtakes from Chairman and Managing Director Sanjiv Mehta speech at the company’s Annual General Meeting which was held virtually this year. A statement undeniably confirmed by the company’s growth over the past decade.
Over a ten-year period, Hindustan Unilever (HUL) has added 26,000 crore rupees (€3 billion) to its bottom line and doubled its turnover to 45,000 crore rupees (€5.1 billion). It has also increased its market capitalisation nine times to end the decade at more than 570,000 crore rupees (€65 billion). HUL is now the second-largest Unilever business in the world.
Read on to find the six lessons for growth the Chairman shared with the audience and some of the company’s plans to ensure that HUL continues winning in the next decade.
1. Leveraging the power of purpose
In 2005 Surf was HUL’s fifth-largest brand. Today it’s No.1. The first ‘Dirt is Good’ campaign for the detergent was based on the premise that ‘if while doing something good, you get dirty, then dirt is good’. The message worked because the brand’s purpose and performance aligned.
“To win in the next decade we know being purpose-led is not enough,” says Sanjiv. “We have to be future-fit – by being fully digitised, more innovative and faster to respond to the many changes shaping people’s lives every day.”
And this is already being seen in the work HUL’s brands are doing today. Across its beauty and personal care portfolio, Dove has used real-life stories to challenge societal expectations through its #StopTheBeautyTest campaign. And on Women’s Day, Clinic Plus launched a new campaign pledging to educate women to stand up against domestic violence.
2. Shaping categories of the future
During the past decade, steady growth in the Indian economy has seen an emerging middle class with evolving consumer needs and aspirations. HUL has met them through strategic acquisitions, launches and new product formats.
HUL’s acquisition of Indulekha hair oil strengthened its presence in the Premium Naturals segment and the brand has seen sixfold growth in the five years since its purchase.
HUL has also added famous brands such as Horlicks and Boost to move into the growing nutrition space. As a result, it has become one of the largest Foods and Refreshment businesses in the country.
Covid-19’s impact led to growing consumer demand for health, hygiene and sanitation products, and new products including fabric sanitiser and fruit and vegetable wash. More people doing more household chores themselves also created a surge in demand for and saw the launch of the Vim Matic dishwasher range to meet this emerging trend.
A surge in the demand for dishwashers saw the HUL team respond with the launch of a range of Vim Matic products
3. Winning in Many Indias
Knowing what spaces to move into relies on knowing your customer base. “In India, dialects, customs and rituals change every 100km. To look at a country as diverse as India as one homogeneous entity is a gross under-service to the vast cultural and business opportunity it presents,” says Sanjiv.
So HUL created its ‘Winning in Many Indias’ (WIMI) model, which classifies the country as 15 consumer clusters to provide insights into product development and marketing. These are supported by 16 country category business teams that function as micro-organisations to reduce the time taken to land innovations.
One example of the model’s success is how it enabled Lifebuoy to ramp up capacity 30 times and launch 17 hand sanitiser variants in just 100 days during the 2020 pandemic. WIMI helped the team capture data and understand where demand for the product was needed most. It provided the insights to develop different SKUs, packs and labels which in turn modernised the brand to meet new consumer needs. As a result, Lifebuoy grew by 1,000 bps, and the strong demand for Lifebuoy sanitiser and handwash remains.
Capturing local data and insights helped Lifebuoy launch 17 different hand sanitiser variants in 100 days
4. Creating inclusive growth
The drive for inclusive growth for all of India has seen HUL manufacture brands in 29 different factories in remote areas. It has also worked to enable more women to join the workforce through initiatives such as Project Shakti, which has created 136,000 women micro-entrepreneurs across 18 states.
To protect and sustain natural resources, Hindustan Unilever Foundation (HUF) has worked with villages and partners to enable more than 1.3 trillion litres of water potential through improved water management, inspired by its ‘Water for Good’ programme.
And today, 100% of HUL’s electricity is certified renewable, and it’s making solid progress with thermal energy. “We have also stepped up our efforts in plastic waste management,” adds Sanjiv. “We have collected and safely disposed of more than 100,000 tons of post-consumer plastic waste and have committed to collect and safely dispose of more plastic waste than that used in our packaging, as from this year,” he says.
Inclusive growth is a key drive of HUL’s workplace culture, too. “Women make up 42% of our managerial workforce and in a few more years we will achieve gender parity,” explains Sanjiv. “We have also set up accessible workspaces for people with disabilities, introduced a paternity leave policy and included same-sex partners in our medical policy to create a workforce that is truly diverse.”
5. Designing a digital backbone
“Data-driven, analytics-led and AI- and machine-learning-powered technology that leverages automation and builds intelligence over time will be the bedrock of this ‘intelligent enterprise’ – and will drive HUL’s growth in this decade,” says Sanjiv. “It’s the backbone of a digital strategy that will bring its traditional suppliers and consumers with it.”
“HUL has the strongest foothold in traditional trade, and we believe wiring this up will give us competitive advantage,” he explains. To this end “we are digitising the entire customer journey from demand capture to demand fulfilment. At the core is the digitisation of distributor operations, AI-based order capturing followed by the next layer of intelligent operations including recommendations, replenishment-based ordering, delivery route optimisation and dynamic beat optimisation,” he says.
It’s already bringing results. Shikhar is HUL’s eB2B app which connects sales teams with more than 500,000 stores that stock Unilever products. During the pandemic it ensured orders were received when the sales team couldn’t reach the outlets during lockdowns. It also helped optimise deliveries. By using location data to triangulate, it calculated the best possible routes to reach stores that avoided containment zones and other restrictions.
More than 500,000 retailers are now connected to HUL’s Shikhar app, which has helped them order and keep their shelves stocked with essentials during the Covid pandemic
6. Focusing on a future-ready workplace
“New levels of uncertainty and volatility require us to build new muscles that will help us to truly lead from the front while addressing changes. This requires a fundamental shift in the way we work and the way we help our talent develop to face the challenges of the future,” says Sanjiv.
Alongside investment in a digital transformation programme, “we established a Digital Council comprising cross-functional leaders, which facilitates digital experiments across the company,” he adds.
“Our Digital Transformation Lead works to see how technology can positively impact business while the Chief Data Officer is working on building data pipelines and laying the foundation of a data-rich company. We are also leveraging AI for recruitment and cognitive computing and using NLP for a variety of purposes.
“At the same time, we have been transforming how we work at HUL by introducing more flexible ways of working. Last year, we embarked on a holistic programme of redeployment, moving people to teams that needed more resource to meet the rising demands of the time,” he adds.
Building back better
The pandemic has pushed businesses to break new ground and reimagine the future – an equitable, sustainable and purposeful one. It has put organisations like HUL – an integral part of most households in the country – in a position of great responsibility.
“It will take concerted efforts from governments, businesses and individuals to commit to an equitable and sustainable future. Hindustan Unilever is geared to walk that path,” says Sanjiv.
“As the former UN Secretary-General and Nobel Peace Prize laureate Kofi Annan said: ‘Our biggest challenge in this new century is to take an idea that seems abstract – sustainable development – and turn it into a daily reality for all the world’s people.’”
“It is for us to make sure that it becomes a reality in this decade,” he says.
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