Hindustan Unilever Limited (HUL) - Portfolio Strategy Across Categories

Company Overview

Hindustan Unilever Limited (HUL) is India's largest Fast-Moving Consumer Goods (FMCG) company and a subsidiary of Unilever PLC. According to HUL's Annual Report 2023-24, the company operates across multiple categories including Home Care, Beauty & Personal Care, Foods & Refreshment, and Ice Cream, with a portfolio of over 50 brands spanning 14 distinct categories. The company reported that its products reach over 90% of Indian households through a distribution network that covers approximately 9 million retail outlets across the country (HUL Annual Report 2023-24). HUL's stated purpose is "to make sustainable living commonplace" and it positions itself as a company committed to both business growth and positive societal impact.

Portfolio Architecture and Strategic Intent

• HUL's portfolio strategy is built around what the company terms as a "multi-category" approach, designed to address diverse consumer needs across income segments and consumption occasions.

  
  

• In its FY24 Annual Report, HUL articulated that its portfolio spans categories with different growth rates, profitability profiles, and competitive dynamics, providing both stability through mature categories and growth through emerging segments. The company's CEO, Rohit Jawa, stated in the FY24 earnings call that HUL's strategy involves "driving penetration in core categories while simultaneously building scale in newer, high-growth segments" (HUL Q4 FY24 Earnings Call Transcript, April 2024).

  
  

• The portfolio is organized into four primary divisions. The Beauty & Personal Care division includes brands like Lux, Lifebuoy, Dove, Clinic Plus, Sunsilk, and Pond's, covering skincare, haircare, and personal wash categories.

  
  

• The Home Care division encompasses detergents and household cleaning products under brands such as Surf Excel, Rin, Vim, and Domex. The Foods & Refreshment division includes tea brands (Brooke Bond, Taj Mahal), coffee (Bru), packaged foods (Kissan), and nutrition products. The Ice Cream division operates under brands including Kwality Wall's and Magnum (HUL Annual Report 2023-24).

  
  

• According to HUL's investor presentation from August 2024, the company explicitly follows a strategy of maintaining leadership positions in core categories while investing in "future growth engines." The presentation noted that HUL holds number one or number two positions in the majority of the categories in which it operates.

1. Strategic Evolution and Portfolio Additions

• In December 2020, HUL completed the acquisition of GlaxoSmithKline Consumer Healthcare's Indian business for approximately ₹31,700 crores, adding nutrition and health-focused brands like Horlicks, Boost, and Viva to its portfolio (HUL press release, December 2020). CFO Ritesh Tiwari stated in a media interaction that this acquisition was "strategically aligned with HUL's objective of entering the high-growth health and nutrition segment and expanding its Foods & Refreshment portfolio" (Economic Times, April 2021).

  
  

• This acquisition represented a deliberate move to strengthen HUL's position in the health and wellness category, which according to industry reports cited in HUL's FY21 Annual Report, was growing faster than traditional FMCG categories in India.

  
  

• In terms of organic growth, HUL has consistently invested in product innovation and premiumization within existing categories.

2. Distribution Strategy and Portfolio Leverage

• According to the company's FY24 Annual Report, HUL's distribution system is structured in multiple tiers, with a direct reach operation covering larger towns and cities, and an indirect distribution system leveraging approximately 9 million retail outlets nationwide.

  
  

• The company reported that it operates through a network of over 4,000 redistribution stockists who serve smaller retailers (HUL Annual Report 2023-24).

  
  

• This distribution architecture allows HUL to introduce new products and variants with relatively lower go-to-market costs compared to single-category competitors.

3. Portfolio Rationalization and Exit Decisions

• While HUL has primarily focused on portfolio expansion, the company has also made selective exit and divestment decisions.

  
  

• In November 2021, Unilever globally announced a strategic review of its tea business, which included evaluating options for HUL's tea operations in India (Unilever press release, November 2021). However, in subsequent communications, HUL clarified that no definitive decisions had been made regarding the Indian tea business given its strong market position and profitability in India.

  
  

• More significantly, in March 2024, Unilever announced globally that it would separate its Ice Cream business, creating a standalone entity.

  
  

• These decisions reflect a pragmatic approach to portfolio management where strategic fit, operational synergies, and growth potential are continuously evaluated.

4. Brand Positioning and Portfolio Segmentation

• Within individual categories, HUL maintains multiple brands targeting different consumer segments and price points.

  
  

• This multi-brand strategy is deliberate and designed to maximize category coverage. For instance, in personal wash, HUL operates Lifebuoy (germ protection, mass market), Lux (beauty soap, mid-market), Dove (moisturizing, premium), and Pears (gentle care, niche premium).

  
  

• However, this strategy also creates complexity in brand management and marketing resource allocation.

5. Sustainability Integration Across Portfolio

• HUL has integrated sustainability considerations into its portfolio strategy, positioning this as both a value proposition for consumers and a business imperative.

  
  

• The company's FY24 Annual Report extensively detailed its "Compass Strategy," which includes commitments to sustainable sourcing, plastic waste reduction, and positive social impact.

  
  

• These sustainability commitments influence portfolio decisions in multiple ways. In Home Care, HUL has introduced concentrated detergent formats that reduce packaging and transportation emissions.

6. Organizational Structure Supporting Portfolio Strategy

• HUL's organizational structure has evolved to support its multi-category portfolio.

• According to organizational announcements made in 2022 and 2023, HUL operates with category-focused business units, each with dedicated leadership responsible for strategy, innovation, and P&L performance (HUL press releases, 2022-2023).

  
  

• This structure provides category-specific focus while maintaining centralized functions for supply chain, finance, human resources, and corporate affairs.

  
  

• The company reported in its FY24 Annual Report that it has invested in building specialized capabilities in areas like data analytics, digital marketing, and sustainability that serve all categories.

  
  

• This combination of category-focused business units and centralized shared services is designed to balance specialization with scale efficiencies

  
  

Category-Specific Strategic Approaches

• In the Beauty & Personal Care segment, which contributed a substantial portion of the company's revenue according to its FY24 segmental reporting, HUL has focused on both mass-market penetration and premiumization.

  
  

• CEO Rohit Jawa mentioned in an interview with Business Standard (June 2024) that the company views skincare and premium beauty as "strategic focus areas given the under-penetrated nature of these categories in India and rising consumer aspirations."

  
  

• The company's skincare strategy exemplifies this dual approach. While maintaining mass-market brands like Fair & Lovely (rebranded to Glow & Lovely in 2020), HUL simultaneously invested in premium positioning for brands like Pond's and introduced dermatologically-tested ranges.

  
  

• In Home Care, particularly detergents, HUL faces intense competition. The company's strategy, as outlined in its FY24 investor presentation, focuses on "defending market leadership through innovation in product efficacy, sustainability credentials, and format innovation." Surf Excel, HUL's flagship detergent brand, has seen continuous innovation in formats including liquid detergents, detergent bars, and concentrated washing powders.

  
  

• The Foods & Refreshment category represents both mature subcategories like tea and emerging opportunities in packaged foods and health nutrition.

Competitive Dynamics Across Categories

• HUL faces different competitive landscapes across its portfolio categories. In detergents and personal wash, the company competes with both large organized players like Procter & Gamble and numerous regional and local brands.

  
  

• HUL's response to competitive dynamics varies by category. In categories with intense price competition, the company has focused on value offerings while defending premium segments through differentiated products.

  
  

• The rise of digital-native brands in beauty and personal care represents a particular competitive challenge. In response, HUL has launched or acquired digital-first initiatives and has invested in its direct-to-consumer capabilities.

  
  

Innovation and R&D Approach

• HUL's innovation strategy supports its multi-category portfolio through centralized R&D capabilities combined with category-specific application. The company operates research facilities in India and leverages Unilever's global R&D network.

  
  

• Specific examples of portfolio-supporting innovation include the development of low-unit-price packs to increase affordability and trial, formulation adaptations for hard water conditions prevalent in India, and format innovations like detergent liquids designed for hand-washing (still the dominant washing method in India).

  
  

• HUL's approach to innovation increasingly involves external partnerships. The company has collaborated with startups and academic institutions on specific technical challenges.

  
  

Limitations 

• Over-dependence on mature categories: High exposure to soaps, detergents, and staples limits high-growth upside.

  
  

• Margin pressure: Price-sensitive Indian consumers restrict premium pricing across mass segments.

  
  

• Portfolio complexity: Managing 50+ brands increases operational and marketing inefficiencies.

  
  

• Slower innovation cycles: Large-scale execution can delay rapid experimentation versus agile D2C brands.

  
  

• Intense competition: Strong regional and local players erode market share and pricing power.

  
  

• Rural demand volatility: Income swings and inflation directly impact volumes in core markets.

  
  

• Limited services/digital leverage: Heavy reliance on physical FMCG versus data-led or platform models.

Key Lessons

1. Portfolio diversification reduces risk: Operating across categories with different maturity levels ensures stability while enabling growth.

   
   

2. Shared assets create scale advantage: Common distribution, manufacturing, and consumer insights strengthen competitiveness versus single-category players.

   
   

3. Inorganic growth requires execution depth: Acquisitions like GSK Consumer Healthcare offer speed-to-scale but demand strong integration capabilities.

   
   

4. Premiumization must be calibrated: Balancing premium offerings with mass affordability is critical in emerging, price-sensitive markets.

   
   

5. Sustainability is strategic, not optional: Environmental and social priorities increasingly shape portfolio choices and brand differentiation.

   
   

6. Organization enables strategy: A hybrid structure of category focus and shared services is essential for effective multi-category portfolio management.

Discussion Questions

1. Portfolio Diversification vs. Focus

• When does multi-category breadth create value versus dilute focus and returns?

• How should firms weigh risk diversification and asset leverage against depth of category expertise?

• What India-specific factors (market size, fragmentation, price sensitivity) make HUL’s breadth viable?

• Would the same portfolio logic work in developed FMCG markets—why or why not?

  
  

2. Acquisition Integration & Portfolio Strategy

• How should acquisitions be evaluated beyond financial returns (strategic fit, capability build, speed-to-scale)?

• When is acquiring preferable to building organically within a portfolio?

• How do integration challenges impact the actual value created by portfolio acquisitions?

  
  

3. Premiumization in Emerging Markets

• How can companies balance premium growth with mass-market affordability?

• Does running premium and mass strategies simultaneously create brand or resource conflicts?

• How should HUL adapt its portfolio during economic downturns or consumer downtrading?

  
  

4. Sustainability as a Portfolio Driver

• How much should sustainability influence category entry, exit, and investment decisions?

• How should firms resolve trade-offs between sustainability goals and short-term profitability?

5. Digital Disruption & Portfolio Evolution

• How should incumbents respond to D2C and digital-native brand disruption—acquire, build, or transform?

• Which elements of HUL’s scale-driven model remain strengths in a digital context, and which become constraints?

Conclusion

• Scale + disciplined portfolio management drive durable competitive advantage

  
  

• Balance of mature categories (stability) and emerging segments (growth)

  
  

• Strong leverage of shared assets: distribution, brands, manufacturing, insights

  
  

• Strategic acquisitions and calibrated premiumization expand value capture

  
  

• Deep rural–urban reach strengthens resilience across income tiers

  
  

• Continuous portfolio reassessment ensures long-term growth in a price-sensitive market