Indian Unilever subsidiary to merge food and refreshments division

INDIA – Hindustan Unilever Ltd (HUL), the Indian subsidiary of Unilever N.V has announced that it will combine its foods and refreshments businesses effective July in order to advance growth in line with global category structure of the parent company Unilever.

The combined food and refreshment segment will be headed by Sudhir Sitapati, currently the executive director, refreshments while the existing director for foods Geetu Verma will move to Rotterdam as global vice-president of nutrition and naturals platform in Unilever.

Geetu Verma joined Hindustan Unilever after several years of career development at P&G, Seagram and PepsiCo in India and Europe.

“This integration will help HUL increase organisational agility and better serve local consumers while harnessing the advantage of global scale,” said a HUL statement to the stock exchange.

The food business including Knorr soup and Kissan Jam combined with refreshments with brands including Bru coffee, Lipton tea and Magnum ice-cream accounts for nearly a fifth or US$944.13 million to HUL’s overall sales, reports ET Retail.

According to Unilever, foods and refreshments segment, headed by Nitin Paranjpe, who was the CEO at HUL five years ago, have a 43% share in total sales.

In 2016, HUL split the two businesses in what it termed as ‘having a sharper focus in these high growing’ segments but it was until last year in April when it announced restructuring of its firm.

The consumer goods firm then said it was buying back shares, reviewing the dual structure, disposing of its underperforming spreads business in addition to combining its food and refreshments business.

This was at the wake of a US$143 billion Unilever takeover bid from Kraft Heinz who are on the verge of building a global consumer goods giant.

Unilever rejected the combination that could have seen the third-biggest takeover in history and the largest acquisition of a UK-based company, according to Thomson Reuters data.

Unilever is said to be struggling to operate profitably having experienced slow growth, new competition from upstart brands, deflation in developed markets and more health-conscious consumers.

The restructuring, innovations geared towards consumer health with several divestitures of its Spreads business in countries such as Nigeria and South Africa seems to be on point, driving 3.7% growth in sales in the 2018 first quarter results.

The Underlying Sales Growth (USG) excluding spreads was 3.7% with an encouraging shift to volume-led growth compared to the prior year.

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