HUL reinvigorates Annapurna

Fast moving consumer goods major Hindustan Unilever (HUL) is repositioning its staples brand Annapurna on the health platform. The company is doing so by taking the fortification route, says Sidharth Singh, vice-president, packaged foods.

“Annapurna’s essence has been about fortification. We would like to play that up,” he says. The company had recently begun taking steps in that direction with the launch of a low-sodium salt called Annapurna Zinda Dil. The product, targeted at those suffering from high blood pressure, has been placed in the top five metros of the country, Singh says.

“The initial response has been good. There are many routes you can take while extending a brand — diet diversification, supplementation or fortification. We chose the latter because we found it most impactful,” he adds.

In recent years, Saffola from rival Marico had also taken the fortification route to extend its franchise. From edible oil, the '400-crore Saffola has moved into salt, atta mixes, rice, oats — all of them speaking of some health benefit or the other.

“The fortification route is not new,” says Arnab Mitra, an FMCG analyst at brokerage firm Indiainfoline.

“Annapurna’s contribution to HUL’s overall foods business is small. This is an attempt to play in niche segments.”

Shirish Pardeshi, senior FMCG analyst, Anand Rathi Securities, also agrees. “The commodity business is a low-margin venture. With fortified foods you can play the premium pricing game,” he says.

Typically, a packet of branded salt costs anywhere between '12 and '15 per kg. Branded packaged atta, on the other hand, is priced at '40-50 per kg. Key players in the segment include Aashirwad from ITC, Tata Salt and ShaktiBog Atta, etc. Even modern retailers such as Future and Reliance have entered the fray with their private labels.