Hindustan Unilever Limited (HUL), a leading fast-moving consumer goods (FMCG) company, has recently announced the acquisition of a 90.5% stake in the online premium skincare brand Minimalist for ₹2,955 crore. This strategic move is aimed at bolstering HUL’s Beauty & Wellbeing portfolio and tapping into the high-growth premium skincare segment. The acquisition is structured through a combination of a primary infusion and secondary buyout at a pre-money enterprise value of ₹2,955 crore. The remaining 9.5% stake will be acquired from the founders over the next two years, as per the transaction terms. This acquisition aligns with HUL’s strategy to expand its presence in high-demand sectors and capitalize on the increasing consumer preference for premium skincare products.
Minimalist, known for its science-backed and transparent approach to skincare, has quickly gained popularity in the Indian market. The brand focuses on active ingredients, which have become a key category within the skincare industry. By acquiring Minimalist, HUL is set to gain a competitive advantage in this rapidly growing sector. According to an industry expert, Minimalist will be a valuable addition to HUL’s skincare portfolio, providing a head-start before other major players establish their presence in the active ingredient category. The popularity of Indian beauty and personal care startups has grown substantially, driven by the expansion of online commerce and the impact of social media.
HUL’s CEO and Managing Director, Rohit Jawa, expressed enthusiasm about the acquisition, highlighting Minimalist’s strong brand built on science, product efficacy, and transparency. The company aims to achieve a 900 basis points improvement in its portfolio towards premiumization over the next few years. This acquisition is a key step in their journey to expand their Beauty & Wellbeing portfolio in high-growth premium demand spaces. The premium beauty segment currently contributes roughly 50% to the overall beauty market and is growing at twice the pace of the rest of the market.
In terms of recent financial performance, HUL reported a consolidated revenue of Rs 15,559 crore in the quarter ending December 31. The company also saw a 19 percent year-on-year increase in net profit for the same quarter, driven by a one-time exceptional gain from the divestment of its Pureit business. However, the beauty and wellbeing segment only experienced a modest 1 percent year-on-year growth in the quarter, impacted by a delayed winter. Despite this, there’s evidence of premiumization within the beauty market with premium shampoo sachets growing faster than mass sachets. HUL is also seeing positive results from targeted initiatives in emerging formats, including serums, masks and conditioners, indicating a growing trend towards premiumization and high-growth products. The company’s consolidated total income rose 1.7 per cent to ₹16,050 crore.
The acquisition of Minimalist underscores HUL’s commitment to premiumization and the growing importance of online skincare brands in the Indian market. The strategic move positions HUL to take advantage of the increasing per capita expenditure on beauty products in India, which remains significantly lower than many other countries, thereby presenting considerable scope for premium growth. The expansion of HUL’s portfolio is aligned with its goals to grow its presence within the beauty market.
Sources:
https://m.economictimes.com/industry/cons-products/fmcg/hindustan-unilever-acquires-90-5-stake-in-beauty-brand-minimalist-for-rs-2955-crore/articleshow/117455307.cms
https://www.moneycontrol.com/news/business/earnings/hul-bets-big-on-premiumization-targets-portfolio-shift-towards-premium-offerings-12916792.html
https://www.livemint.com/companies/news/hul-acquires-over-90-stake-in-premium-skincare-brand-minimalist-for-rs-2-955-crore-11737549758593.html