New Delhi According to a report by brokerage Edelweiss Securities, since its merger with GlaxoSmithKline Consumer Healthcare Ltd (GSKCH) a year ago, Hindustan Unilever Ltd (HUL) has been going aggressive with new launches and investing more money in market growth .
In December 2018, HUL announced that it would buy out GSKCH’s business in India, giving it access to brands such as Horlicks, Boost and Maltova. 31,700 crore deal. As part of the merger, 3,500 employees became part of the Indian arm of Anglo-Dutch giant Unilever. As part of the deal, HUL also sought to distribute GSK’s brands like Eno, Crocin, Sensodyne etc in the country.
Hindustan Unilever (HUL), now one of the largest food businesses in India, has completed SAP migration and 85% go-to-market integration for its nutrition business. The brokerage in its report said that HUL has increased its direct coverage in the nutrition business by 2 times as compared to prior acquisitions.
The acquisition of the Horlicks brand pitted HUL against Nestle and Mondelez India (Bournvita).
GSK worked with a network of 800 distributors, which became part of the HUL distribution network after the merger.
HUL, which has the widest distribution network for an FMCG company in India, is also using its distribution capacity to expand the reach of GSKCH’s brands.
“HUL is increasing the effective coverage, which is now at 2x pre-GTM integration level. According to the company, all these have helped it increase penetration sequentially and have delivered double-digit volume growth in the health food beverage business in Q2FY22,” the report said.
The report said HUL has “delayed” the distribution system, with HUL now servicing direct, for a large rural outlet, and HUL taking over the middle layer of the sub-distributor.
To be sure, the reach of the health food beverage category in India is low.
“HUL has a clear strategy to invest behind brands to improve reach and reach, launch impactful innovations, drive profitability through synergies and drive growth,” the report said.
also launched a 2 Horlicks Pouch- As trial run in Andhra Pradesh and Telangana in March this year. And in light of the encouraging signs, the company has expanded further in Karnataka and Tamil Nadu over the past few months, the report said.
It also helps that consumers are more health-conscious, especially in the post-Covid world.
Meanwhile, the company is also launching new variants. For example, it launched Horlicks Diabetes Plus.
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