Daybreak
Why FMCG giant Hindustan Unilever has never really screamed for ice cream
Dec 3, 2024
Hindustan Unilever's decision to demerge its ice cream business raises eyebrows amidst a thriving market. The podcast explores the stark contrast between the struggling ice cream division and the booming beauty and personal care sectors. With emerging brands capturing younger consumers, HUL's strategic pivot highlights a fascinating paradox of rising demand versus low profit margins in ice cream. Tune in for insights into how this FMCG giant navigates changing market dynamics while redefining its priorities.
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Quick takeaways
- Hindustan Unilever's decision to demerge its ice cream division reflects a strategic shift to prioritize more profitable product categories like beauty and personal care.
- Despite the growing Indian ice cream market and changing consumer preferences, HUL is stepping back to focus on established brands with better margins.
Deep dives
HUL's Strategic Shift in Focus
Hindustan Unilever's decision to demerge its ice cream business highlights a strategic pivot towards its core product categories: beauty, personal care, and home care. Despite the ice cream division's worth of over 1700 crore rupees, it has contributed minimally to the company's overall revenue, increasing from just 1% to 3% in over a decade. In contrast, brands like Surf Excel have shown significant growth, with Surf Excel projected to become a 10,000 crore brand, emphasizing HUL's shift towards premium products in sectors where margins are higher. As consumer behavior trends toward more premium and diverse product offerings within these core categories, HUL aims to streamline operations and focus resources on its most profitable sectors.
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