What do you feel about the current operating environment?
India is one of the shining spots in the world today. Many times, emerging markets get battered because of the troika – balance of payment deficit, fiscal deficit and exchange rate depreciation. And this time, it is coupled with commodity inflation. However, this time, there is high inflation and a fear of looming recession even in developed markets. If, as a nation, we can still deliver a 6-7% real GDP growth and if we can contain the consumer price inflation to about 7%, then we could look back at the year and say, ‘Well done, India!’
On value growth now forming the bulk of turnover…
As long as inflation remains elevated, there will be price-led growth. However, looking at the macro picture within our categories where the FMCG market volumes have declined by 6%, HUL growing at 4% is very satisfactory. We have had seven quarters of double-digit growth, which indicates our ability to navigate the turbulence.
Would there be a return to volume growth and price reductions?
We will see volume pick up once commodity prices ease, leading to a reduction in prices. When prices start to come down there would be a year when the headline growth would see moderation and then we would again get into a phase where our turnover would be predominantly volume-driven. If we remain laser-focused on protecting the consumer franchise and our business model, we will emerge victorious. When inflation goes back to moderation and stability, we will have a much bigger franchise, a much larger market share, stronger brands, and the business model will be strong enough to reinvest even more into our portfolio.
On Reliance’s entry in
the FMCG market…
I certainly believe India is not a zero-sum game. It’s a massive market, and when more competitors come in, it’s good for consumers. You would have heard me say this often: A good competitor brings out the best in Hindustan Unilever. If we are focused on our consumers, if we give them superior products, if we ensure that the price-value equation remains intact, and if we keep investing in our capabilities, I am certain that consumers who have been loyal to HUL over the last nine decades will continue to extend their loyalty to HUL for many more decades to come.