HUL CEO Sanjiv Mehta: To survive local competition, the key is to adapt, be flexible
Mumbai: Hindustan Unilever Ltd (HUL), the largest producer of consumer-packaged products in the country, added Rs1,000,000 in additional revenue over the past five years as it battled two years of drought and The increasing competition of new participants. In an interview, HUL Director General and CEO Sanjiv Mehta says that organizations need to be flexible and agile because of the external environment in rapid and secure change. Edited extracts:
In recent years, India has outperformed its growth slowdown. Do you think the worst has happened and now you are seeing a resurgence of consumer confidence?
We have constantly increased our market in the last six years, leaving aside the demonetization quarter. We must follow this path.
But India has been known for poor performance a couple of times over the past year.
See, by Unilever, India is the largest GAE market (development and emergency). The shot is good we agree with Unilever on the top line and bottom line. If you look at the year ended in 2014, we have increased 9%, with volume growth of about 5%. Similarly, during fiscal year 2015, we increased double-digit with a mix of sound volume. Even in fiscal year 2016, (us) increased by 4 to 5%. Not that we had major problems with our growth trajectory. Only this exercise due to various external factors. First, it was of course two consecutive years of drought and demonetization.
During the quarter, the premiere led its advanced line and profitability. What percentage of your portfolio is the premium?
There are about 20% of our portfolio in which we invest considerable resources in the development of the market. Most of these brands are in premium segments. These brands have steadily increased to 2-3 times (x) the normal rate of business growth. (HUL defines high-end products, such as the price of which is 120% for the average price category). The valuation occurs in the areas of laundry, leather and with brands like Dove and pears, all of them are on the cutting edge.
But today, there are more brands in the market?
As the country matures, there will be more brands in the market and more money in the hands of consumers. Our quest is to make sure that not only our market shares remain, if they do not rise, but also increase the size of this market. Our growth will improve the size of that cake.
The focus now is on profitability. what does this mean to you?
We consider efficiency and efficiency and provide 3 to 4% of total income in savings. Then we have created a savings projects. We have now delivered a 6% saving in billing. This allows us to invest behind new brands, promotions for the consumer.
Local competition also warms up …
This is a worldwide trend, regional companies are released from multinationals, as they are close to the consumer and are agile. These are the two main factors. It’s not that they do not have access to better R & D. It’s not that they do not have the speed or the best talent.
What are you doing about it?
The important bit is the adaptation of the organization, (be) agile and flexible. Three years ago, we started the Win in Many Indies (Wimi) initiative. It was a fabulous start and I am very happy that we entered this space because India is not a homogenous country. Today, our strategies are developed by groups. They are so different.
Unilever is committed to a journey “connected with growth.” As part of this, in the period 2004-2005, we divided the marketing brand developers and brand manufacturers. I think it was what to do next. The world was moving towards globalization and we need consistency in all our major brands around the world. Now we move to a different stage where we meet brand builders and developers of the brand.