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The Indian hydration market is expected to grow by 12-15% per annum, with a current size of $1.2 billion. To capitalize on this trend, Hindustan Unilever (HUL) and Reliance Consumer have launched two new products: Liquid IV, an electrolyte drink in powder format targeting the affluent at Rs 360 for three sticks, and Spinner, a sports drink priced at Rs 10 a bottle, targeting the masses.

While HUL’s Liquid IV aims to bridge the gap between hydration and overall wellness for the affluent, Reliance Consumer’s Spinner seeks to democratize the sports drink category by making it more accessible to a wider audience. Both products cater to different consumer segments, with HUL targeting the affluent and Reliance targeting the masses.

The Indian hydration market is complex, with various players, including PepsiCo, Coca-Cola, Dabur, and Tata Consumer, along with healthcare majors like Cipla and Himalaya Wellness, operating in the space. The Food Safety and Standards Authority of India has also brought energy drinks under stricter scrutiny, and the broader hydration category has faced criticism from social media influencers, doctors, and health experts over product claims.

HUL’s ED, Beauty & Wellbeing, Harman Dhillon, believes that products like Liquid IV stand out due to their focus on healthier hydration options and the shift away from caffeine-laden energy drinks. Reliance Consumer’s COO, Ketan Mody, argues that Spinner is designed to be a affordable and effective hydration solution for everyone.

Both companies are employing different strategies to reach their target markets. HUL will have a digital-first approach for Liquid IV, focusing on metros and Tier 1 cities, while Reliance Consumer will sell Spinner through both online and offline channels, partnering with IPL teams to increase brand visibility. Ultimately, the two companies are positioning themselves to capitalize on the growing Indian hydration market, which is expected to continue growing at a rapid pace.

Content giants HUL and Disney+ Hotstar are in a bid battle for exclusive IPL ad space.

The upcoming Indian Premier League (IPL) season is bringing together cricket enthusiasts, but behind the scenes, a dispute is brewing between top advertisers like Hindustan Unilever (HUL) and over-the-top (OTT) platforms like Disney+ Hotstar. The issue revolves around the mismatch between what was promised and what’s being delivered for ad campaigns. HUL, India’s largest FMCG company, has been consistently the country’s top advertiser, but they have received complaints from customers who have seen the same ads repeated multiple times on OTT platforms.

A senior HUL executive describes the experience as “spamming a user with the same ad” when they saw the same Dove and Surf Excel ads as many as 150 times within a week. With ad rates on Disney+ Hotstar increasing by at least 50% during the season, HUL is concerned that spending extra money to overwhelm users with ads doesn’t add up. The company, which spends nearly Rs 4,000 crore on ads annually, cannot afford to ignore these complaints, especially during the highly anticipated IPL season that attracts millions of viewers.

The issue has led to a heated debate between top marketing executives and product managers from both HUL and Disney+ Hotstar. The IPL, which starts on March 21, is expected to attract over 600 million viewers, making it a prime opportunity for advertisers. However, the quality of ad campaigns will be crucial in determining the success of both parties. As the season begins, it remains to be seen how Rishabh Pant will perform on the field and whether Virat Kohli can lead Bengaluru to a legendary win, but in the background, the battle between HUL and Disney+ Hotstar will be a closely watched spectacle.

FMCG giants like HUL, ITC, and Dabur are making a significant investment in advertising for the Maha Kumbh festival.

The confluence of faith and devotion, Maha Kumbh, has completed one month, attracting millions of devotees to Prayagraj, Uttar Pradesh. While the event is a significant spiritual gathering, it has also become a lucrative opportunity for brands to advertise and market their products. Many fast-moving consumer goods (FMCG) companies, such as Hindustan Unilever (HUL), Britannia Industries, Amul, Dabur, and ITC, have taken advantage of the event to showcase their brands.

According to Vritti Mindwave Media, the official advertising licensee, FMCG companies have been investing in various branding, marketing, and CSR activities. HUL, for instance, has participated in various activations, including distributing bags with two compartments to women bathing at the Ganga river and running anamorphic advertisements on vans and billboards. Dabur has introduced Pass Pass, Pulse, and Catch-branded boats, bags, and kalashes for pilgrims.

The cost of brand activation at Maha Kumbh varies, with costs ranging from Rs 5-10 lakh for CSR activities and Rs 3-5 lakh for producing an anamorphic video. FMCG giants have also used high-profile LED displays at Prayagraj railway station to reach pilgrims, with brands paying upwards of Rs 1.5-2 lakh for a single spot.

Brands have also adopted creative measures to engage with pilgrims, such as ITC’s distribution of 1 lakh Mangaldeep jalbattis and Adani Fortune Foods’ introduction of “Ahar Kumbh” to bring the flavors of home-cooked food to pilgrims. Reckitt-owned Dettol has trained 15,000 sanitation workers and made soaps accessible to them at the Kumbh.

The Confederation of All Indian Traders estimates that Maha Kumbh will generate Rs 2 lakh crore in business over 45 days, with the food and beverages sector and religious offerings contributing Rs 20,000 crore each. With its massive scale and reach, Maha Kumbh has become an attractive platform for brands to connect with a large number of people and promote their products.

Comparing the chronicled performance and unpredictable prospects of Procter & Gamble and Unilever, which company is more likely to yield substantial returns for long-term investors?

For long-term investors, Hindustan Unilever Limited (HUL) is an attractive option due to its dominant brand position, stable growth performance, and premium market strategy. The company’s innovation-driven approach provides a stable investment opportunity, making it a reliable choice for growth-focused investors. In contrast, for investors seeking high dividends, ITC Limited is a better option, offering diversity and a strong cash flow generated from its tobacco business.

HUL’s strong brand presence, efficient operations, and robust distribution network enable it to deliver consistent growth, making it an attractive option for long-term investors. The company’s premium market strategy, which focuses on innovation and sustainability, provides a stable investment opportunity, as its products are designed to meet the evolving needs of consumers while also reducing its environmental impact.

On the other hand, ITC Limited is a sound option for investors seeking high dividends. The company’s diverse business portfolio, which includes tobacco, mutual funds, and agri-products, generates a stable stream of cash flow. This, combined with its strong financial performance, makes it an attractive option for investors seeking regular income.

Ultimately, the choice between HUL and ITC depends on an investor’s specific goals and risk tolerance. Growth-focused investors may prefer HUL’s reliable performance and premium market strategy, while those seeking stability and dividends may find ITC a more suitable option. Both companies have the potential to deliver strong returns in the long term, but it is essential for investors to consider their individual financial goals and risk tolerance when making a decision. By doing so, they can align their portfolio with their investment objectives and achieve their desired outcomes.

PepsiCo Aims to Acquire a Rs 90,000 Crore Stake in Haldiram Snacks

PepsiCo, the US-based multinational food and beverage giant, is set to acquire a significant stake in Haldiram Snacks, a popular Indian snack food manufacturer. According to reports, PepsiCo is considering investing around ₹90,000 crore (around $12 billion) in the company, marking one of the largest foreign direct investments in India’s food sector.

Haldiram Snacks, founded by the Oswal family in the 1980s, has grown to become one of India’s leading manufacturers of snack food products, such as namkeens, kachoris, and other flavored snacks. The company has been expanding its footprint across the country, with over 1,000 outlets nationwide.

The possible investment by PepsiCo is being seen as a strategic move by the company to strengthen its position in the growing Indian snack market. India has been one of the fastest-growing snack food markets globally, with the sector witnessing a compound annual growth rate of around 14% over the past few years.

PepsiCo is looking to gain a foothold in the organized snack food space in India, which is estimated to be valued at around $10 billion. The company hopes to leverage its global expertise in manufacturing and branding to expand its presence in India and tap the growing demand for snack foods in the country.

The investment deal is expected to be structured in a way that PepsiCo takes a significant equity stake in Haldiram Snacks, providing the company with the necessary financial resources to fund its expansion plans. The collaboration is also likely to lead to the creation of new job opportunities and the modernization of production facilities.

Apart from PepsiCo, other major global food giants, such as Nestle, Unilever, and Heinz, are also eyeing the Indian snack food market, which is driving consolidation and global interest in the sector. If the deal is finalized, the investment would demonstrate PepsiCo’s commitment to increasing its presence in India and will be seen as a significant moment in the Indian food industry.

The potential transaction is expected to be completed once regulatory approvals from the relevant Indian authorities are secured. The agreement is likely to be a sign of the exciting times ahead for the Indian food industry, where global players will continue to expand their presence through strategic partnerships and investments.

A surge in rural demand and rising prices drive growth in India’s consumer goods sector, according to NielsenIQ – February 6, 2025.

According to a recent report by market researcher NielsenIQ, the consumer goods sector in India experienced a 10.6% sales growth in the December quarter, driven by strong demand in rural areas and higher prices of staples such as edible oil and wheat flour. The rural areas, which account for over a third of consumer goods sales, have been a bright spot for the industry, with sales volume jumping 9.9% in the December quarter, outpacing the 5.1% increase in urban centers. This is the fourth consecutive quarter that rural areas have outperformed urban locations, driven by income support schemes and slowing salary increases in cities.

Large consumer goods makers, such as Dabur India and Hindustan Unilever, reported a higher December-quarter profit due to recovering rural demand. However, smaller rivals are also gaining ground, with their sales increasing twice as fast as larger companies during the festive quarter. To counter rising commodity prices, consumer goods makers have been raising product prices, leading to a 3.3% increase in overall prices during the quarter. Additionally, Indians are preferring smaller product packs, a trend noted by Hindustan Unilever.

The report highlights the resilience of rural areas in the face of an inflation-led spending slowdown in cities, with recovery in rural demand driven by a combination of factors, including government income support schemes and a relatively robust agricultural sector. However, consumer goods makers are also facing stiff competition from smaller rivals, who are adapting to changing market conditions by offering more competitive prices and smaller product packs.

X social media lawsuit targets Nestlé and Tyson Foods alongside others for alleged advertising infractions

X, a social media platform, has expanded a lawsuit alleging an advertising boycott by major companies to include food and beverage giants Nestlé and Tyson Foods. The lawsuit, which was initially launched in August, also includes infant-formula maker Abbott Laboratories, and outside of the food industry, Shell, Colgate-Palmolive, Lego, and Pinterest.

X alleges that companies conspired with the World Federation of Advertisers (WFA) and its affiliated body, the Global Alliance for Responsible Media (GARM), to pull advertising from the platform after Elon Musk’s acquisition of Twitter in 2022. The WFA is accused of organizing an advertiser boycott of Twitter through GARM, with the goal of coercing Twitter to comply with GARM’s Brand Safety Standards.

The lawsuit claims that a substantial portion of Twitter’s existing advertising customers, including GARM-member advertisers and advertising agencies, abruptly discontinued or sharply curtailed their purchases of advertising from Twitter after the acquisition. The court document states that at least 18 GARM-member advertisers stopped purchasing advertising from Twitter between November 2022 and December 2022, and dozens more substantially reduced their purchases of advertising from Twitter over the course of 2023.

GARM has ceased operations, citing allegations that have caused a distraction and drained its resources and finances. The WFA has not commented on the extension of the lawsuit proceedings. Unilever, another consumer goods giant, reached a settlement with X in October, while Mars has not confirmed its current position in the case.

The lawsuit is seeking damages and an injunction to prevent further boycotts. The case is ongoing, and X is seeking to hold the companies accountable for their alleged role in the advertising boycott.

HUL’s Acquisition of Minimalist: A Glimpse into the Brand’s Future

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Hindustan Unilever (HUL), the Indian arm of the multinational consumer goods company Unilever, is seeking approval from the Competition Commission of India (CCI) to acquire the premium beauty brand Minimalist. This deal is significant, not only for the beauty industry but also for the Indian market as a whole. Minimalist, a luxury beauty brand known for its natural ingredients and minimalist packaging, has become a favorite among Indian consumers looking for high-end, high-performance skincare and makeup products.

With this acquisition, HUL plans to expand its presence in the premium beauty market, which has been growing rapidly in India. The brand is expected to continue operating independently and maintain its product range and manufacturing processes. HUL has emphasized that Minimalist will be its “own separate entity” with its own strategy, and it will not alter the brand’s DNA.

Minimalist’s strong online presence, social media influencer partnerships, and targeted marketing strategies have made it a leader in the luxury beauty space. The brand has also partnered with popular wellness influencers and content creators to promote its products. The acquisition will help HUL strengthen its position in the online space and expand its reach among millennials and Gen-Z consumers who value natural ingredients, sustainability, and authenticity.

While the exact financial details of the deal have not been disclosed, industry insiders speculate that HUL may be investing around $20-30 million in Minimalist. This would be a strategic move by HUL to further diversify its portfolio and strengthen its position in the premium beauty market, where it has historically been weaker.

The acquisition will also enable HUL to expand its distribution network and tap into Minimalist’s strong relationships with online marketplaces, influencers, and content creators. Overall, the acquisition is expected to bolster HUL’s presence in the Indian beauty market and create opportunities for Minimalist to scale globally.

Hindustan Unilever Seeks Competition Commission Nod for Small-Scale Acquisition

Hindustan Unilever Limited (HUL) has submitted a request to the Competition Commission of India (CCI) for approval to acquire a 51% stake in Minimalist, a leading premium beauty and personal care brand. Minimalist is a relatively new brand that has gained popularity in recent years for its high-quality, eco-friendly, and cruelty-free products.

The proposed acquisition is seen as a strategic move by HUL to expand its presence in the premium beauty and personal care segment, which is growing rapidly in India. Minimalist’s products are popular among young Indians who are increasingly seeking high-quality, natural, and sustainable beauty and personal care products.

As part of the acquisition, HUL plans to leverage its distribution network, manufacturing capabilities, and marketing expertise to further grow Minimalist’s business. The company also plans to introduce Minimalist’s products to a wider audience, including in rural areas and smaller towns, where there is a growing demand for premium beauty and personal care products.

The CCI has invited comments from stakeholders and the public on the proposed acquisition, which is subject to certain conditions, including the maintenance of Minimalist’s independence and autonomy, and the continuation of its operations in the Indian market.

The acquisition is expected to have a positive impact on the Indian beauty and personal care industry, as it will provide consumers with access to a wider range of high-quality products. It will also create opportunities for job creation and economic growth, particularly in the rural areas where Minimalist’s products are sold.

In addition, the acquisition is seen as a strategic move by HUL to counter competition from global players such as L’Oréal and Unilever, which have been expanding their presence in the Indian market. By acquiring Minimalist, HUL is seeking to strengthen its position in the premium beauty and personal care segment and maintain its leadership in the Indian market.

Overall, the proposed acquisition of Minimalist by HUL is a significant development in the Indian beauty and personal care industry, and it is expected to have a positive impact on the market. The CCI’s approval of the acquisition is subject to certain conditions, and it is expected to be completed in the coming months.

Today, January 24th, 2025, saw shares of Hindustan Unilever, Britannia Industries, Dr Reddys Laboratories, and Trent dominate trading activity; additional details available here.

The Nifty Index closed at 23,205.35, down 0.49% from the previous day. The Sensex also declined 0.43% to 76,520.38. The Midcap index underperformed the Nifty 50, falling 1.21% to 17,364.55, while the Nifty Small Cap 100 lost 2.35% to 17,396.45.

Among the top gainers, Hindustan Unilever led the pack with a 2% gain, followed by Britannia Industries, Eicher Motors, Grasim Industries, and Tata Consumer. The top losers included Dr. Reddy’s Laboratories, Trent, Mahindra & Mahindra, Adani Enterprises, and Bharat Petroleum Corporation.

The Bank Nifty ended the day at 48,589.00, with an intraday high of 48,858.65 and a low of 48,203.00. It has underperformed the Nifty 50, falling 0.38% over the last week.

The report also lists the top gainers and losers for various market segments, including Nifty 50, Nifty Midcap 50, and Nifty Small Cap 100. Some of the top gainers include Mphasis, Au Small Finance Bank, Persistent Systems, Indian Hotels Company, and Dixon Technologies (India). The top losers include Polycab India, Supreme Industries, Oberoi Realty, Suzlon Energy, and Godrej Properties.

Reliance Consumer Products acquires SIL’s brands to shake up the market, eyeing competition with HUL, Cremica, and Tata.

Reliance Consumer Products (RCPL) has acquired the packaged foods brand SIL, which offers a range of products such as cooking pastes, jams, mayonnaise, and Chinese sauces. The acquisition is aimed at scaling up SIL’s distribution nationally and strengthening RCPL’s position in the fast-moving consumer goods (FMCG) sector. SIL operates mainly in the Western and Southern markets, and RCPL plans to compete directly with established players such as Hindustan Unilever, Tata Consumer, and Cremica.

The acquisition formalities have been completed, and RCPL will acquire SIL’s brands from its current owner, Food Service India. SIL has manufacturing facilities in Pune and Bengaluru, and the company’s revenue stood at ₹240 crore in FY24. RCPL, a wholly-owned subsidiary of Reliance Retail Ventures, reported a top line of ₹8,000 crore for the first nine months of FY25.

The acquisition is part of RCPL’s strategy to offer lower prices than established rivals, provide higher trade margins to retailers, and re-introduce legacy brands. The company has acquired several brands in the past couple of years, including Ravalgaon and Toffeeman confectionery, Campa soft drinks, Raskik beverages, Sosyo carbonated drinks, and Lotus chocolates.

RCPL’s latest acquisition is significant, as it marks the company’s entry into the packaged foods segment. The deal is expected to boost RCPL’s growth, and the company is likely to continue to expand its portfolio through acquisitions and partnerships. Recent deals in the packaged foods space include Agro Tech Foods acquiring Del Monte Foods for ₹1,300 crore and Compass India Food Services buying a majority stake in ICS Foods.

BNP Paribas highlights growth prospects in consumer staples, with optimistic views on HUL, Britannia Industries, and Titan, driving opportunities in the discretionary consumer space.

The article predicts a subdued performance in Q3 FY25 for staple segments in the Indian consumer goods space. However, discretionary segments are expected to show resilience. Key consumer goods companies, such as Hindustan Unilever and ITC, are likely to report higher operating profit growth, while Gharam India’s Godrej Consumer Products (GCPL) may struggle to keep pace.

The article also highlights that affluent consumption is likely to be a stronger growth driver compared to mass consumption. This suggests that high-end and premium products are more likely to see growth, while mass-market products may face challenges.

Despite the challenges, the article suggests that investors may find opportunities in strategic picks like Hindustan Unilever, Britannia Industries, and Titan Company, all of which operate in the discretionary segment. These companies are well-positioned to benefit from the shift towards premium and high-end products.

The article is written from the perspective of an expert, providing analysis and insights on the Indian consumer goods space. The author suggests that while challenges persist, strategic picks like Hindustan Unilever, Britannia Industries, and Titan Company offer opportunities for investors looking to invest in the industry.

The article is not meant to be taken as financial advice, but rather as a commentary on the current trends and prospects in the consumer goods industry. As such, investors should seek additional information and research before making any investment decisions.

We are bullish on Hindustan Unilever (HUL), Britannia Industries, and Titan Industries in the consumer discretionary sector, considering the companies’ ability to navigate challenges and capitalize on opportunities.

Here is a 400-word summary of the content:

The Indian consumer goods market is expected to experience subdued performance in the third quarter of FY25, with staples being affected more than discretionary segments. Despite challenges, some companies, such as Hindustan Unilever, ITC, and Britannia Industries, are likely to report higher operating profit growth. However, Godrej Consumer Products (GCPL) might struggle to keep up.

Affluent consumption is seen as a stronger growth driver compared to mass consumption, which is expected to be more affected by the current economic environment. Despite these challenges, there are opportunities in the market, particularly for strategic picks like Hindustan Unilever, Britannia Industries, and Titan Company.

The outlook for Q3 FY25 is challenging, with various factors such as rubber-necking, inventory correction, and price wars affecting the consumer goods industry. However, a few companies are well-positioned to navigate these headwinds and deliver better performance.

Hindustan Unilever, for instance, is expected to benefit from its strong portfolio of brands and its ability to attract and retain high-value customers. ITC, another strong performer, will likely benefit from its diversified business model, which includes tobacco, agri-business, and FMCG segments. Britannia Industries, a leading player in the bakery and confectionery space, will also benefit from its strong brand presence and strong distribution network.

On the other hand, GCPL, while having a strong portfolio of brands, may struggle to maintain its growth pace due to intense competition and pricing pressure. Nevertheless, even GCPL has its strengths, such as its Amway and Pulse confectionery businesses, which can continue to perform well.

Despite the challenges, these strategic picks offer attractive long-term opportunities for investors. Their diversified business models, strong brand presence, and ability to adapt to changing consumer preferences will help them navigate the tough landscape and emerge stronger. As such, investors should consider these companies for inclusion in their portfolios.

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