HUL to streamline product portfolio

Hindustan Unilever Ltd, which is battling extreme competition, will streamline its products portfolio.

The FMCG major has a total 35 brands and 1,200 SKUs (stock keeping units) of which it will look to eliminate SKUs not doing well.

“By eliminating and rationalising tail-end SKUs, we expect to bring in substantial simplification and cost savings,” chairman Harish Manwani said on Friday.
The company recently rolled out its go-to-market distribution model, which enables efficiencies across the supply chain and reduces cost.

“This model will be directly integrating distributors with the supply chain,” Manwani said, while addressing shareholders at the company’s 76th annual general meeting in Mumbai on Friday.

During financial year 2009, HUL went for 30 new launches and re-launches.
Manwani said the company will took at at least 2 launches or re-launches every month, coining the initiative as TPM (acronym for two per month).

HUL’s market share in categories such as laundry, personal wash, shampoo, toothpaste, tea and coffee stood at 37%, 28%, 44.9%, 28%, 23.4% and 44% respctively.

“We have gained market share last year in Wheel, Rin and Surf Excel,” he said.
HUL is also looking for franchisees for its wellness and beauty businesses —- Lakme Salon and Ayush Therapy Center —- and is also looking at export oportunities for its water business Pure It. Company officials did not divulge details.

To win back spoils, HUL is looking at a mix of strategies. It is banking on consumer insights to deliver competitive products even as it offers better prices to stay ahead of competitors.

“The company’s increased focus on reducing capital expenditure, leveraging the newly implemented go-to-market (distribution chain) and translating consumer insights in the business has saved the company in turbulent times,” Manwani said.

“This is an opportunity to drive for business unusual on costs —- re-engineering core processes, declaring a war on waste, dynamic performance management and cash conservation,” he said.

He said it was important to understand consumer buying behaviour and to deliver better products and prices.

“Consumer understanding has always been and will continue to be at the heart of our business. At a time like this, it is crucial to understand and respond to changing consumer and shopping behaviour. We are leveraging on technology for our product development. For products such as Fair & Lovely, Dove and Rin we are using best technology that give superior benefits,” Manwani said.