Introduction – HUL Business Case Study
Hindustan Unilever Limited (HUL) was a part of my everyday life while I was growing up. Surf Excel tackling the tough stains, Lux soaps stacked neatly in the bathroom, and a green-blue tin of Pond’s cold cream resting on my mother’s dresser. Even today, as I walk down a supermarket aisle, the acquaintance with these brands brings a sense of comfort and trust.
For over 90 years, HUL has shaped Indian households, not just by selling products but by becoming a quiet yet indispensable part of our routines. With its vision of “doing well by doing good” HUL has built a business that touches 9 out of 10 households in India. Over the years, it has evolved and diversified across a gamut of segments that stays true to its commitment to sustainability and responsible business practices.
This case study delves into how HUL earned the trust of generations and continues to be a brand that feels like home.
Timeline
With 50+ brands and a market cap exceeding ₹6 lakh crore, HUL is India’s largest FMCG company.
| Year | HUL Timeline |
| 1930s | Lever Brothers India Limited incorporated in India — established its first soap factory in Sewri, Bombay. |
| 1940s | Company acquired own sales force and agencies in Bombay, Calcutta, and Madras. |
| 1950s | Lever Brothers India Limited, Hindustan Vanaspati Manufacturing Company Limited, and United Traders Limited merged in 1956 to form Hindustan Lever Limited (HLL) |
| 1960s | India’s first research center in FMCG industry opened in Mumbai in 1967. |
| 1970s | The Integrated Rural Development Programme set up grew to cover 200 villages within 10 years. |
| 1990s | Tata Oil Mills Limited merged with HLL, in the largest M&A in Indian corporate history at the time in 1994.
Brooke Bond Lipton India Limited merged with HLL in 1996. Lakme Lever Private Limited was formed in 1996. |
| 2000s | Project Shakti launched as a pilot in Andhra Pradesh, with the goal of improving hygiene, and generating income for rural women. The Company’s name was changed to Hindustan Unilever Limited (HUL) |
| 2010s | HUL embraced the Unilever Sustainable Living Plan (USLP) — committing towards sustainable growth.
Project ‘Prabhat’ launched to engage with and contribute to the development of local communities around our manufacturing sites. The ‘Winning in Many India’s’ (WiMI) operating framework launched. |
| 020s | GSK Consumer Healthcare merged with HUL marking the largest M&A deal in Indian FMCG industry. Iconic health food drink brands — Horlicks and Boost became part of HUL’s portfolio. |
Management on Board
Industry Overview
The Fast-Moving Consumer Goods (FMCG) landscape in India is one of the most dynamic and competitive markets globally. The penetration of FMCG products both in urban and rural India, offers significant headroom for growth. More people entering the middle class, a large working population, increasing nuclear family structures, urbanization, and rapid adoption of technology, all promise well for FMCG growth in the country. This has been further aided by government initiatives to increase financial inclusion and establish social safety nets.
Total revenue of FMCG market is expected to grow at a CAGR of 27.9% through 2021-27, reaching nearly US$ 615.87 billion. In 2022, urban segment contributed 65% whereas rural India contributed more than 35% to the overall annual FMCG sales. India’s FMCG sector is the fourth-largest sector in the economy. It is expected to grow at a CAGR of 10-12%, reaching $220 billion by 2025 due to increasing penetration. FMCG sector provides employment to around 3 million people accounting for approximately 5% of the total factory employment in India.
Market trends shaping the industry
- Digital transformation and E-commerce: India includes 780 million internet users, where an average Indian person spends around 7.3 hours per day on their smartphone, one of the highest in the world. Number of active internet users in India will increase to 900 million by 2025 from 759 million in 2022. E-commerce now accounts for 17% of the overall FMCG consumption among evolved buyers, who are affluent and make average spends of about Rs. 5,620 (US$ 677.11 million). Digital advertising grew to reach US$ 9.92 billion by 2023, with the FMCG industry being the biggest contributor at 42% share of the total digital spend.
- Direct to Consumer (D2C) Brand Strategy: HUL has ventured into the D2C (Direct-to-Consumer) space to compete with emerging digital-first brands. HUL launched UShop to sell its brands directly to consumers, bypassing traditional retail. It offers products from Lakmé, Dove, Surf Excel, Horlicks, and other HUL brands with exclusive online deals. D2C allows HUL to gain direct consumer insights and test new products faster.
- Sustainability and Eco-friendly products: A recent study found that 73% of global consumers would definitely or probably change their consumption habits to reduce their environmental impact. This shift in consumer behavior has led to a surge in sales of eco-friendly, organic, and ethically-sourced goods.
- Premiumization: The convergence of rising affluence, shifting demographics marked by an increase in nuclear families, and rapid urbanization is driving demand for superior and convenient solutions for household chores. In Fabric Care, HUL has transitioned from mass detergent bars and powders to premium options, and from premium powders to liquid detergents. Comfort continued to expand its offering through innovations like ‘Intense’ fabric conditioner for athleisure wear and super sensorial range.
- Beauty and Wellness: The Beauty and Wellness space in India is evolving with rapid speed. With changing lifestyles, increasing disposable incomes and higher exposure to global trends, the consumers are looking for premium beauty products. To bring more focus to their strong portfolio in the Beauty and Personal Care business, HUL has transitioned to two separate businesses – Beauty & Wellbeing and Personal Care from 1st April, 2024.
- Government Policy support: Union Budget 2023-24 has allocated US$ 976 million for PLI schemes that aims to reduce import costs, improve the cost competitiveness of domestically produced goods, increase domestic capacity, and promote exports. Union budget 2023-24 focused on reviving rural demand by boosting disposable income, allocation to farms and higher fund allocation on rural infrastructure, connectivity, and mobility to create long-term jobs.
Innovations at HUL
The Lakmē further elevated its credentials with impactful launches like the MultiSlayer Face Sticks and the revolutionary Invisible Sunstick. In Skin Cleansing, their bodywash portfolio grew in high double-digits. In Skin Care, sun care and light moisturizers witnessed a similar success story, with the premium portfolio continuing to grow strongly. In Hair Care, their premium brands Dove and TRESemmé continued to grow steadily, while Clinic Plus crossed the ₹2,000 crore turnover mark. HUL unveiled the Beauty Collective with an aim to strengthen beauty partnerships with e-Commerce and Modern Trade customers.
In Home Care, HUL witnessed volume growth powered by big strides in their brand superiority journey. They continued to drive market development through home trials and build premium formats such as liquids. In Vim liquids, for instance, HUL improved their product formulation, sharpened the proposition further, and modified the packaging to make it more aspirational & ergonomical. As a result, Vim liquids saw robust volume growth with significant penetration gains in over a decade and maintained its position as the market leader in the segment.
In Surf excel liquid, HUL launched a new winning proposition of ‘removes tough dried stains first time in the machine’. They saw growth in both Fabric Wash and Household Care, with their premium portfolio leading this growth.
With consumers increasingly looking for products that provide nutritional, long-term benefits, under our Foods and Refreshment business, HUL further strengthened their adult nutrition drinks portfolio by building condition awareness, from diabetes to women’s health to bone strength. In Horlicks, they sharpened and fortified the proposition of ‘Taller, Stronger, Sharper’ through precise and focused communications, packaging redesign and promotions. The brand saw improvement in penetration, market share and brand power.
Their pioneering e-B2B digital application, Shikhar, continued to grow and elevate retailer engagement. In their journey to collaborate with the Indian Government’s initiative Open Network for Digital Commerce (ONDC) and democratize digital commerce, HUL piloted an initiative on Shikhar through which, neighborhood kiranas can now go live on ONDC seamlessly and sell their entire range of products online. Their Shakti network of women micro-entrepreneurs in rural India, is now over 2 lakh women strong.
Their supply chain network, with 28 owned factories and over 50 manufacturing partners, continued to be HUL’s source of competitive advantage. HUL are digitizing their manufacturing ecosystem and now two of their factories, Dapada and Sonipat, have the title of the prestigious ‘End-to-End Lighthouse’, awarded by the World Economic Forum for implementing advanced fourth industrial revolution solutions on shop floor.
HUL announced their collaboration with key chemical companies to pilot the production of near-zero emissions, synthetic soda ash – a key ingredient in laundry powder. To reduce plastic in their packaging, HUL engaged with partners who can help build supplier capacity, and capability for PCR (Post-Consumer Recycled material), including rigids and flexibles.
Hindustan Unilever Foundation, their not-for-profit subsidiary that has been addressing India’s water challenges since 2010, along with its partners, created a collective and cumulative water potential of over 3.2 trillion litres. This is equivalent to the drinking water needs of India for nearly two years.
HUL now has 16 Suvidha centers operational in Mumbai that provide over 4 lakh people access to safe sanitation. Through Suvidha, HULs pioneering initiative, the company has continued to make safe hygiene and sanitation facilities available to people in informal urban settlements. Through Prabhat, HULs community development initiative aimed at improving livelihoods, health, nutrition as well as protecting the environment, has positively impacted nearly 10 million people till date.
Business Segment Highlights
Lessons Learned
For entrepreneurs, HUL’s story reinforces the importance of adaptability, consumer focus, and strategic expansion for sustainable growth.
‘What’s good for India is good for Hindustan Unilever’ is the mantra deeply engrained across different business segments. HUL has leveraged the power of purpose. The first ‘Dirt is Good’ campaign for the Surf detergent was based on the premise that ‘if while doing something good, you get dirty, then dirt is good’. The message worked because the brand’s purpose and performance aligned. HUL believes in being relevant, more innovative and faster to respond to changes shaping people’s lives every day.
HUL has met the evolving consumer aspirations through strategic acquisitions, launches and new product formats. Covid-19’s impact led to growing consumer demand for health, hygiene and sanitation products, and new products including fabric sanitizer and fruit and vegetable wash. More people doing more household chores themselves also created a surge in demand for dishwashers and saw the launch of the Vim Matic dishwasher range to meet this emerging trend.
HUL recognizes the customer base quite well. So HUL created its ‘Winning in Many Indias’ (WIMI) model, which classifies the country as 15 consumer clusters to provide insights into product development and marketing. WIMI helped the team capture data and understand where demand for the product was needed most. One example of the model’s success is how it enabled Lifebuoy to ramp up capacity 30 times and launch 17 hand sanitizer variants in just 100 days during the 2020 pandemic.
Conclusion
Hindustan Unilever Limited (HUL) has not only been a dominant player in India’s FMCG sector for over 90 years but has also deeply embedded itself in the lives of millions.
By leveraging digital transformation, expanding into direct-to-consumer channels, and focusing on premiumization and sustainability, HUL continues to set industry benchmarks. Its wide-ranging portfolio, spanning personal care, home care, and nutrition, ensures that it remains relevant across diverse demographics.
With a strong supply chain, innovative marketing strategies, and initiatives like Project Shakti and Shikhar, HUL has successfully balanced profitability with social impact. As the Indian FMCG landscape grows, HUL’s ability to innovate, embrace sustainability, and connect with consumers will determine its continued success.
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