 "Hindustan Unilever, HUL")
After integrating the distribution of GlaxoSmithKline Consumer (GSK Consumer) with its own set-up, Hindustan Unilever (HUL) has outlined an ambitious double-digit growth for its nutrition business for central India from the current 1 per cent in this calendar year.
The fast-moving consumer goods (FMCG) giant, in a meeting with distributors from the region, said central India saw double-digit overall growth in calendar year 2021. This compares to mid-single digits in 2020, according to a distributor who attended the meeting.
In central India, the maker of Lux soaps, saw an overall growth of 18 per cent in 2021 (calendar year) compared to 5 per cent growth in 2020 (calendar year).
To sell GSK Consumer products like Crocin, Otrivin and Ostocalcium, HUL distributors had to apply for a drug licence and were facing a problem with on-boarding smaller distributors during the year. This issue has since been resolved.
Also, while integrating GSK Consumer’s distributors with itself, the company had to help distributors push for sales of HUL products along with the existing GSK Consumer products. GSK Consumer distributors also had to adjust/change in line with the system of HUL.
This, coupled with HUL’s larger portfolio of products, took a while to align with.
Queries sent to HUL did not elicit any response till the time of going to press.
GSK Consumer has a strong hold across channels like chemists, kiranas, modern trade and e-commerce in South and East India.
Prior to the acquisition, GSK Consumer did not have a strong presence in central India, said Vishal Gutka, vice-president of equity research at PhillipCapital India.
He added that the chemists’ channel prefers to order medicines and consumer goods through semi-wholesalers, who distribute products for multiple companies and brands.
Reasons for this being higher credit period and chemists’ inclination towards selling high-margin products. Compared to this, margins of fast-moving consumer goods (FMCG) items are relatively low and products occupy more shelf space.
HUL had earlier said it wants to sell its GSK nutrition portfolio via direct distribution. This increases the engagement level compared to adopting the semi-wholesaler route of product distribution, Gutka said.
The consumer goods major also asked distributors to increase women in the sales force and has set a target of on-boarding 1,000 women by the end of 2022.
In 2020, HUL completed its merger with GSK Consumer.
