Hindustan Unilever

About fmcg sector in india

The fast moving consumer goods (FMCG) segment is the fourth largest sector in the Indian
economy. The market size of FMCG in India is estimated to grow from US$ 30 billion in 2011 to US$
74 billion in 2018.

Food products is the leading segment, accounting for 43 per cent of the overall market. Personal
care (22 per cent) and fabric care (12 per cent) come next in terms of market share.

Growing awareness, easier access, and changing lifestyles have been the key growth drivers for the
sector.

What are FMCG goods?

FMCG goods are popularly known as consumer packaged goods. Items in this category include all
consumables (other than groceries/pulses) people buy at regular intervals. The most common in the
list are toilet soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged
foodstuff, and household accessories and extends to certain electronic goods. These items are
meant for daily of frequent consumption and have a high return.

Rural set to rise

Rural areas expected to be the major driver for FMCG, as growth continues to be high in these
regions. Rural areas saw a 16 per cent, as against 12 per cent rise in urban areas. Most companies
rushed to capitalise on this, as they quickly went about increasing direct distribution and providing
better infrastructure. Companies are also working towards creating specific products specially
targeted for the rural market.
The Government of India has also been supporting the rural population with higher minimum support
prices (MSPs), loan waivers, and disbursements through the National Rural Employment Guarantee
Act (NREGA) programme. These measures have helped in reducing poverty in rural India and given
a boost to rural purchasing power.

Hence rural demand is set to rise with rising incomes and greater awareness of brands.

Urban trends

With rise in disposable incomes, mid- and high-income consumers in urban areas have shifted their
purchasing trend from essential to premium products. In response, firms have started enhancing
their premium products portfolio. Indian and multinational FMCG players are leveraging India as a
strategic sourcing hub for cost-competitive product development and manufacturing to cater to
international markets.

Top Companies

According to the study conducted by AC Nielsen, 62 of the top 100 brands are owned by MNCs, and
the balance by Indian companies. Fifteen companies own these 62 brands, and 27 of these are
owned by Hindustan UniLever.
The top ten India FMCG brands are:

1.Hindustan Unilever Ltd.

2. ITC (Indian Tobacco Company)
3. Nestl India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and Health Care
10. Marico Industries

What the millenniums expect

According to a study by TMW and Marketing Sciences that surveyed 2,000 people across different
age groups ranging, young consumers are the most rational and likely to spend more time weighing
up potential purchases. The survey also suggests that younger people are using recommendations
from their peers about products and services in order to make rational purchase decisions.
According to the study, shoppers aged 18 to 24 are 174 per cent more likely to use
recommendations on social media than shoppers aged 25 and over.

Another key factor today is speed. Today's consumer wants packaged goods that work better,
faster, and smarter. The need for speed" trend highlights the importance of speed as a potentially
decisive purchase factor for packaged goods products in a world where distinctions between
products are shrinking.

Younger consumers express the greatest need for speed, not a huge surprise for the smartphone
generation. Datamonitor's 2013 Consumer Survey found that younger consumers those in the 15-24
year old age group were twice as likely to say that "results are achieved quickly" has a "very high
amount of influence" on their health and beauty product choices than consumers in the oldest age
group, those aged 65 or older. Speed matters, and 2014 will almost certainly see the introduction of
new game-changing timesavers.

Road Ahead

FMCG brands would need to focus on R&D and innovation as a means of growth. Companies that
continue to do well would be the ones that have a culture that promotes using customer insights to
create either the next generation of products or in some cases, new product categories.

One area that we see global and local FMCG brands investing more in is health and wellness.
Health and wellness is a mega trend shaping consumer preferences and shopping habits and FMCG
brands are listening. Leading global and Indian food and beverage brands have embraced this trend
and are focused on creating new emerging brands in health and wellness.

According to the PwC-FICCI report Winds of change, 2013: the wellness consumer, nutrition foods,
beverages and supplements comprise a INR 145 billion to 150 billion market in India, is growing at a
CAGR of 10 to 12%.
Indian Consumer Durables and FMCG Industry Analysis

The consumer durables market is expected to reach US$ 12.5 billion in 2015 and US$ 20.6 billion by
2020. Urban markets account for the major share (65 per cent) of total revenues in the consumer
durables sector in India.
There is a lot of scope for growth from rural markets with consumption expected to grow in these areas as
penetration of brands increases. Also demand for durables like refrigerators as well as consumer
electronic goods are likely to witness growing demand in the coming years in the rural markets as the
government plans to invest significantly in rural electrification.

The FMCG sector has grown at an annual average of about 11 per cent over the last decade. The overall
FMCG market is expected to increase at (CAGR) of 14.7 per cent to touch US$ 110.4 billion during 2012-
2020, with the rural FMCG market anticipated to increase at a CAGR of 17.7 per cent to reach US$ 100
billion during 2012-2025.

Food products are the leading segment, accounting for 43 per cent of the overall market. Personal care
(22 per cent) and fabric care (12 per cent) come next in terms of market share.

Growing awareness, easier access, and changing lifestyles have been the key growth drivers for the
consumer market.

The Government of India's policies and regulatory frameworks such as relaxation of license rules and
approval of 51 per cent foreign direct investment (FDI) in multi-brand and 100 per cent in single-brand
retail are some of the major growth drivers for the consumer market.

HINDUSTAN UNILEVER
About

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods
Company with a heritage of over 80 years in India and touches the lives of two out of
three Indians.

With over 35 brands spanning 20 distinct categories, HUL works to create a better future
every day.

The Company has over 18,000 employees and has an annual turnover of INR
31,425 crores (financial year 2015 16). HUL is a subsidiary of Unilever, one
of the worlds leading suppliers of fast moving consumer goods with strong
local roots in more than 100 countries across the globe with annual sales of
53.3 billion in 2015. Unilever has 67.2% shareholding in HUL.

Vision
Unilever is a unique company, with a proud history and a bright future. We
have ambitious plans for sustainable growth and an intense sense of social
purpose.

Purpose & principles

Our Corporate Purpose states that to succeed requires "the highest

standards of corporate BEHAVIOUR towards everyone we work with,
the communities we touch, and the environment on which we have
an impact."

Approach to Corporate Governance

To succeed, they believe it requires the highest standards of corporate

BEHAVIOUR towards everyone they work with, the communities they touch,
and the environment on which they have an impact. This is their road to
sustainable, profitable growth and creating long-term value for their
shareholders, their people, and their business partners.
Standard of Conduct

We conduct our operations with honesty, integrity and openness, and with
respect for the human rights and interests of our employees. We shall
similarly respect the legitimate interests of those with whom we have
relationships.

Obeying the law

Unilever companies and employees are required to comply with the laws and
regulations of the countries in which we operate.

Public Activities

Unilever companies are encouraged to promote and defend their legitimate

business interests.

Unilever will co-operate with governments and other organizations, both

directly and through bodies such as trade associations, in the development
of proposed legislation and other regulations which may affect legitimate
business interests.

Unilever neither supports political parties nor contributes to the funds of

groups whose activities are calculated to promote party interests.

Community Involvement

Unilever strives to be a trusted corporate citizen and, as an integral part of

society, to fulfil our responsibilities to the societies and communities in which
we operate.

Consumers

Unilever is committed to providing branded products and services which

consistently offer value in terms of price and quality, and which are safe for
their intended use. Products and services will be accurately and properly
labelled, advertised and communicated.

The Environment
Unilever is committed to making continuous improvements in the
management of our environmental impact and to the longer-term goal of
developing a sustainable business.

Unilever will work in partnership with others to promote environmental care,

increase understanding of environmental issues and disseminate good
practice.

Innovation

In our scientific innovation to meet consumer needs we will respect the

concerns of our consumers and of society. We will work on the basis of sound
science, applying rigorous standards of product safety.

Competition

Unilever believes in vigorous yet fair competition and supports the

development of appropriate competition laws. Unilever companies and
employees will conduct their operations in accordance with the principles of
fair competition and all applicable regulations.

Business Integrity

Unilever does not give or receive, whether directly or indirectly, bribes or

other improper advantages for business or financial gain. No employee may
offer, give or receive any gift or payment which is, or may be construed as
being, a bribe. Any demand for, or offer of, a bribe must be rejected
immediately and reported to management.

Unilever accounting records and supporting documents must accurately

describe and reect the nature of the underlying transactions. No
undisclosed or unrecorded account, fund or asset will be established or
maintained.

Conflicts of Interest

All Unilever employees are expected to avoid personal activities and financial
interests which could conict with their responsibilities to the company.

Unilever employees must not seek gain for themselves or others through
misuse of their positions.
 A clear direction for us

By combining our multinational expertise with our deep roots in diverse local
cultures, were continuing to provide a range of products to suit a wealth of
consumers. Were also strengthening our strong relationships in the
emerging markets we believe will be significant for our future growth.

And by leveraging our global reach and inspiring people to take small,
everyday actions, we believe we can help make a big difference to the world.

"We cannot close our eyes to the challenges that the world faces. Business
must make an explicit and positive contribution to addressing them. Im
convinced we can create a more equitable and sustainable world for all of us
by doing so, says Unilever CEO Paul Polman.

But this means that business has to change. The Unilever Sustainable Plan
is a blueprint for sustainable growth. And in 2014 we are strengthening our
Plan with new commitments to drive further transformational change.

Our Priorities and Principles

Unilever is committed to supporting sustainability and providing our

consumers around the world with the products they need to look good, feel
good and get more out of life.

Five key priorities provide the foundation for our brands campaigns. Read
some examples of how different brands are upholding these principles.

A better future for children

Our oral care brands Signal and Close-Up encourage children to brush their teeth
day and night for optimal dental health. We also partner the FDI World Dental
Federation, supporting oral health programmes around the world

Brands such as Omo and Persil have helped parents believe the unconventional
philosophy that Dirt is good. Children learn through play, and mud spatters and grass
stains can easily be removed with effective laundry products

Unilever also partners the World Food Programme and launched the Together for
Child Vitality initiative to bring our expertise in nutrition to children in some of the
worlds poorest countries.
 A healthier future

Our Flora/Becel margarine brands have been scientifically proven to help reduce
cholesterol levels
Vaseline has launched the Vaseline Skin Care Foundation, providing research into
skin conditions and support for people affected by them

Lifebuoy soap has long had a presence in developing markets around the world, and
its campaign to promote handwashing with soap was celebrated by 200 million people
across 53 countries in 2013.

A more confident future

Doves Campaign for Real Beauty uses real women instead of models in its
advertising campaigns. The brand has also launched the Dove Self Esteem Fund which
educates and inspires millions of young women

Our Sunsilk hair care brand has partnered some of the worlds leading hair
specialists to co-create formulas tailored to treat conditions such as hair-fall, frizz,
limp locks and uncontrollable curls

Close-Up toothpaste provides an affordable oral care solution for consumers in

developing markets, allowing them to take care of their dental health and closer with
confidence.

A better future for the planet

Were aiming to grow our business while reducing our environmental footprint and
working across the supply chain for every brand to do so

Our Laundry brands, including Surf, Omo, Persil and Comfort, have launched the
Cleaner Planet Plan together, encouraging consumers to change their laundry habits
to reduce water and energy consumption

Our Lipton tea brand backs sustainable forest management projects in Africa

A better future for farming and farmers

Many of our brands contain ethically and sustainably sourced ingredients that are
independently certified

Among these are Lipton tea, which is accredited by the Rainforest Alliance, and Ben
& Jerrys ice cream, which includes Fairtrade vanilla and almonds in various avours

Around half our raw materials come from agriculture and forestry, so were working
towards making our key crops 100% sustainable.

Logo

Unilever is committed to making sustainable living commonplace and our

logo is a visual expression of that commitment. Each icon has a rich
meaning at its core, and represents some aspect of our effort to make
sustainable living commonplace.

Strategy for sustainable

business

Unilever has, from its origins, been a purpose-driven company. Today their
purpose is simple but clear - to make sustainable living commonplace.
We are living in a world where temperatures are rising, water shortages are more
frequent, food supplies are increasingly scarce and the gap between rich and poor
increasing. Populations are growing fast, making basic hygiene and sanitation even
more of a challenge. At Unilever we can see how people the world over are already
affected by these changes. And the changes will pose new challenges for us too, as
commodity costs uctuate, markets become unstable and raw materials harder to
source.

We believe that business must be part of the solution. But to be so, business will
have to change; there is not business as usual anymore. Sustainable, equitable
growth is the only acceptable business model. Our vision is to grow our business,
whilst reducing our environmental footprint and increasing our positive social
impact.

In 2010 we launched the Unilever Sustainable Living Plan, which is our blueprint for
sustainable business. We will achieve our vision through our Plan, which is helping
us to decouple our growth from our environmental impact while increasing our
positive social impact, driving profitable growth for our brands, saving costs and
fueling innovation.

NUDGE PHILOSOPHY
With 7 billion people on our planet, the earths resources are immensely strained. This means
sustainable, equitable growth is the only acceptable model for our business.

We believe growth and sustainability are not in conflict. Making sustainable living commonplace
for our consumers is helping to drive profitable growth. By focusing on sustainable living needs,
we can build brands with a significant purpose. By reducing waste and material use, we create
efficiencies and cut costs. This helps to improve our margins. By looking at product
development, sourcing and manufacturing through a sustainability lens, opportunities for
innovation open up. And we have found that by collaborating with partners including not-for-
profit organizations, we gain valuable new market insights and extend channels to engage with
consumers.

We have developed a simple four-point framework to help capture the ways in which
sustainability contributes to our business success.
More growth

Consumers are responding to campaigns by brands such as Omo, Breyers

and Hellmanns on issues ranging from water scarcity to sustainable
sourcing. Their interest and engagement is translating into sales growth and
greater brand awareness.

In fact, our Sustainable Living brands accounted for nearly half of our growth
in 2015 and grew faster than the rest of our business.

Sustainability creates innovation opportunities, pushing us to re-think

product design in a world of finite resources to address specific social and
environmental issues. It opens up new markets and allows our brands to
connect with consumers in different ways to meet their changing needs.

Lower costs

By cutting waste and reducing use of energy, raw materials and natural
resources, we create efficiencies and cut costs, while becoming less exposed
to the volatility of resource prices. Cost avoidance and savings help to
improve our margins.

We have achieved cumulative cost avoidance of over 600m through eco-

efficiency in our factories since 2008. Our waste manufacturing
programmealone has contributed around 250 million of cost benefits and
created hundreds of jobs.

Less risk

Sustainable ways of doing business help us mitigate risk across our

operations. Operating sustainably helps us to futureproof our supply chain
against the risks associated with climate change and long-term sourcing of
raw materials.

By 2015, 60% of our agricultural raw materials were sustainably sourced.

More trust

Placing sustainability at the heart of our business model strengthens our

relationships with stakeholders and helps us succeed as a business. It helps
us maintain our value and relevance to consumers, whilst inspiring Unilevers
current and future employees.

In 2015, we maintained our status as the Graduate Employer of Choice in the

fast-moving consumer goods sector among our target universities across 34
countries.

Sustainable Living brands drive growth

Putting sustainable living at the heart of our brands is inspiring our

consumers and growing our sales. The concept of purpose-driven brands is
not new. Among our own brands, Lifebuoy and Ben & Jerrys have had a
social or environmental purpose at their heart since they were founded.

However, in todays complex and interconnected world, a powerful purpose

alone is not enough and brands must look their impacts across the board.
Brands cannot do social good while harming the planet, or improve the lives
of women who buy our products while ignoring the working conditions of the
women who make them. This is why Unilever has created a definition of what
makes a true Sustainable Living brand. Such a brand must not only have a
clear purpose that contributes to a social or environmental concern. The
product itself must also contribute to one or more of the targets we have set
in our Unilever Sustainable Living Plan.

To assess product and purpose, we developed a methodology to help us

determine how, and to what extent, each brand delivers against the two
criteria. It enables brands to generate a systematic view of their progress
across social and environmental factors. In 2016, we analysed our top brands
using this methodology. Our analysis revealed that in 2015 Sustainable
Living brands grew even faster than they did in 2014. They also delivered
nearly half our growth and grew significantly faster in fact 30% faster
than the rest of the business.

We believe that if we want to effect change at scale, we will achieve this by

making large, successful, category-defining brands recognisably sustainable.
Our five biggest brands: Dove, Dirt is Good, Knorr, Hellmanns and Lipton are
all Sustainable Living brands.

The below examples from Domestos, Dove, Knorr and Lipton show how each
has a purpose that addresses a specific social and environmental concern.
And how they have made changes and improvements to their products to
address a specific target in our Unilever Sustainable Living Plan.

In 2015, we carried out research to understand whether consumers views on

sustainability translate to actual purchasing choices. The majority of people
we spoke to not only believe that sustainability is important but also take
action to live more sustainably. Our research also revealed that sustainability
issues are relevant to consumers in both developed and emerging markets.
This supports our thinking that sustainability presents a growth opportunity
for business.

Sustainable Living brands: purpose and

product in action
Domestos

Purpose: To help 25 million people gain improved access to a toilet by 2020

by promoting the benefits of using clean toilets and by making toilets
accessible.

Product: We have reduced the plastic used for our Domestos bottles by up to
15%, making them lighter yet maintaining their strength. Once rolled out
across the range worldwide, this will save around 1,000 tonnes of plastic a
year.

Find out more about the action were taking to help people gain improved
access to a toilet.
Dove

Purpose: To make beauty a source of confidence not anxiety for women

everywhere by reaching over 15 million young people with our Dove Self-
Esteem Project.

Product: Dove was one of our first brands to introduce compressed aerosol
deodorants in 2013. Consumers can enjoy the same protection and fragrance
in the same spray time as before, but in a can half the size. This innovation
cuts the carbon footprint per can by about 25%.

Find out more about the action we are taking on helping young people
improve their self-esteem and rolling out our compressed spray technology.

Knorr

Purpose: To unlock avour and goodness from everyday food from Farm -
through sourcing 100% of ingredients sustainably - to Fork, through
nutritious cooking.

Product: Already 92% of the top 13 vegetables and herbs used in Knorr
sauces, soups and seasonings are grown sustainably, and a sustainably
grown label on pack is making it easier for people to make responsible
choices in the supermarket.

Find out more about the action we are taking on sourcing our vegetables
sustainably.

Lipton

Purpose: Lipton supports farmers by working to improve their livelihoods and

those of their families while protecting the planet for the future.

Product: By the end of 2015, all the tea for our Lipton tea bag blends was
sourced from Rainforest Alliance CertifiedTM estates, a major step for the
worlds biggest tea brand.

Working with partners

Global issues such as deforestation, food security and access to sanitation
are too large and complex for any single organisation to tackle alone. By
collaborating with partners including not-for-profit organizations, we can pool
resources and leverage skills, capabilities and networks that complement our
own expertise.

We are stepping up our engagement to work with governments, NGOs and

others in our industry to drive fundamental change to whole systems. Thats
why Unilever is playing a leading role in important global initiatives such as
the World Business Council for Sustainable Developments Action 2020, the
Tropical Forest Alliance 2020 and the Global Task Force for Scaling up
Nutrition.

Developing a team fit for growth

Sustainable, profitable growth can only be achieved if the right people are
working in an organisation that is fit to win, underpinned by a culture in
which performance is always aligned with values. We are increasingly an
agile, exible and diverse business with people who are motivated by doing
good whilst doing well.

We are building capability and leadership amongst our people and are
attracting some of the best talent in the marketplace. 76% of Unilever
employees worldwide agree that their job contributes to the Unilever
Sustainable Living Plan and drives sustainable growth.

Developing & engaging our people

A skilled, motivated and engaged workforce is essential to achieving

our growth ambition.

Compass strategy

The Compass defines four non-negotiable commitments within the business that we believe
will help us achieve our purpose and vision: winning with brands and innovation;
 winning in the market place; winning through continuous improvement; and winning
with people, because developing and retaining the right quantity, quality and diversity of
people is crucial to our growth strategy.

Strong talent

We have three priorities for the development of our employees around the
world. They are:

Build depth of capability and leadership;

Live our values and build a performance culture;
Build an agile, exible and diverse organisation.

Encouraging BEHAVIOUR change

Inspiring people to adopt new BEHAVIOURs is central to our Plan.

Unilevers Five Levers for Change

We revisit what we know about consumers and systematically identify:

Barriers what are the things that stop people from adopting a new BEHAVIOUR?
Triggers how could we get people to start a new BEHAVIOUR?
Motivators what are the ways to help them stick with the new BEHAVIOUR?

Next, we apply the Unilever Five Levers for Change:

Make it understood. Do people know about the BEHAVIOUR? Do they believe its relevant to
them? This lever raises awareness and encourages acceptance.
Make it easy. Do people know what to do and feel confident doing it? Can they see it fitting into
their lives? This lever establishes convenience and confidence.
Make it desirable. Will doing this new BEHAVIOUR fit with their actual or aspirational self-image?
Does it fit with how they relate to others or want to? This lever is about self and society because
humans are social animals.
Make it rewarding. Do people know when theyre doing the BEHAVIOUR right? Do they get
some sort of reward for doing it? This lever demonstrates the proof and payoff.
Make it a habit. Once people have made a change, what can we do to help them keep doing it?
This lever is about reinforcing and reminding.

PRODUCT (I would like to work on)

Product name: PURE IT
DESCRIPTION: Pureit is the worlds most advanced range of in-home water purifiers. Pureit
is breakthrough innovation designed by Hindustan Unilever and it provides complete protection
from all water-borne diseases, unmatched convenience and affordability.

REASON FOR CHOOSING IT: In the developing world, most of all diseases are water-related -
a major cause for this is the poor quality of drinking water. The magnitude of the problem can be
seen from the fact that diarrheal disease alone leads to 2.5 billion episodes and 1.5 million child
mortalities every year.

Boiling water, as a means of purification, is expensive, energy-intensive, and cumbersome.

Available storage and candle-based filters do not ensure safety from harmful germs. Given this
context, Unilever embarked on a mission to provide safe and affordable drinking water through
in-home water purification.

UNILEVERS WORK

Unilever scientists have worked for many years to come up with a range of technological
breakthroughs that have led to the creation of Pureit a unique offering by Unilever. Pureit
breaks through the barriers of convenience & affordability by providing water that is as safe
as boiled water and ensuring complete protection from water-borne diseases.

USP:

The Pureit innovation addresses one of the biggest technological challenges of the century
that of making safe water accessible & affordable for millions.

Pureit provides 4 liters of As safe as boiled water at a running cost of Rs 1 without the
hassles of boiling, without the need of electricity or a continuous tap water supply. Pureit is the
worlds most advanced in-home water purification system. The output water from Pureit meets
stringent criteria for microbiologically safe drinking water, from one of the toughest regulatory
agencies the USA, EPA (Environmental Protection Agency). From a single SKU brand in 2008,
Pureit now has eight variants in its portfolio namely: Pureit Classic 23 liters, Pureit Classic 14
litres, Pureit Intella 12 liters, Pureit Classic Auto-fill 23 litres, Pureit Marvella OGT, Pureit
Marvella RO, Pureit Advanced and Pureit Marvella UV.

NUDGE PHILOSOPHY

Pureit is a brand which is slowly upcoming brand by HUL, is yet to gain trust
and recognition by people, as the market is already dominated by
AQUAGUARD, TATA SWACH brand , so to enter into a market which is already
ooded by big players, only through advertisement the trust cannot be
earned in a large amount, so a framework can be adopted as in,

EMPLOYEE ENGAGEMENT cum CSR:

Employees can be sent to remoter villages or slum areas or areas where

contaminated water is a problem and they can provide demo and also
provide free samples in villages, slums to promote their products as HUL
wont incur much loss and employees will also feel more connected and
responsible towards the products design and usage and also will help them
with a right pricing strategy (pricing issues: amazon.com).

Advertising and promotion:

They can conduct a small campaign and ask childrens to bring tap water
from their home and take away fresh tasty mineral water, this will create
awareness and also provoke in sales.

Reinvent the wheel

Rewrite the advertisement showing more of rural people involvement or

small children or diseases spreading due to water contamination problem to
show more social responsibility.

Product design

Make the filter available in variant colors like VIBGYOR range, and also show
some involvement of cartoon characters drinking water and becoming more
strong and focused.(some social issues or cause advertisement).

Celebrate a pureit day in schools and colleges, offices:

By taking a van with filter and providing them with pureit water along with
some other brand like gluconD or tang, saying it makes tang/gluconD
taste better and also more energetic.