Market value up, but volumes declining in India: Unilever CEO Alan Jope

Indian markets are growing in value, but volumes are declining, Unilever CEO Alan Jope told investors on Thursday after announcing its July-September quarter results. The consumption weakness is due to the impact of inflation, particularly in rural areas, he said.

Despite weakness in the market, Hindustan Unilever (HUL) registered a volume growth of 4 per cent during the July-September quarter (Q2), while its revenue increased 16.1 per cent to Rs 15,144 crore.

“We are confident of HUL’s ability to continue to grow ahead of the market and we see that reflecting in very strong market share performance,” Jope said.

In its earnings release, Unilever said, “India showed strong growth with double-digit pricing and positive volumes, supported by innovations and continued strength of its premium portfolio.”

“According to Nielsen, the total market value has grown 7 per cent, whereas we have grown at 16 per cent. When you look at the volumes, while the market has declined 6 per cent, we grew 4 per cent,” Sanjiv Mehta, MD and CEO, HUL, said in a conference call on Friday.

Ritesh Tiwari, HUL CFO, had said urban markets were growing more than rural, and in the near-term, the company was “cautiously optimistic that growth will continue to be price-led”. “If at all we see the broader basket of commodities cooling off the way vegetable oil has, that should help price come down… and if it does, it will augur well as far as consumption and volume are concerned,” he had said.

Unilever’s hair care business grew in mid-single-digits, driven by strong performance in India and North America, Graeme Pitkethly, CFO, Unilever, told investors. He also pointed out that in India and Latin America, consumers are trading up and down for value. Pitkethly said, adding that the company was making significant investments in its supply chains.

“We are making significant investments in our supply chain networks in our priority markets with India and US network resets and a new multicategory site in China underway… We’ve got quite a fulsome programme coming up, including the investment in a complete, very extensive network reset of our supply chain in India,” Pitkethly added.