Hindustan Lever restructures foods business
The move comes as a corrective action to the unsatisfactory results from the company’s foods business.
14/02/05 India, Hindustan Lever (HLL), the country’s largest consumer products company, has restructured its foods business.
After betting big on the foods business for driving growth, HLL has not got satisfactory results. It had invested a lot on research and development in terms of launching innovative products to treat the platter of the Indian consumer.
As part of new ventures, the company entered the confectionery business two years ago under the Max brand. Today, the company announced that it is pulling out of this business, as its product could not provide much of a product differentiation as compared to other brands. So, we decided against further investment in this business, it was a well-calaculated move, M S Banga, non-executive chairman of Hindustan Lever said.
The exit costs relating to confectionery business stood at Rs 30.45 crore. Other products that has been withdrawn are biscuits(Kissan Bistix), Knorr Soupy Snax and Annapurna 4’0 clock tiffin and Annapurna ready-to-eat chappatis.
In the beverages business, Brooke Bond accounts for more than 90 per cent of tea sales, grew by 16 per cent. It restructured the tea brands portfolio and has Brooke Bond and Lipton. Under Brooke Bond, it has three sub-brands Taj Mahal, Red Label and Taaza.
The overall beverage business declined by 7 per cent due to the phasing out of the A1 tea brand. Its Bru instant coffee had performed well for the quarter.
In the atta business, it has exited unviable geographies and is focusing on the south and west regions as the margins are better in these markets, Lever executives explained. In the ice cream business, it focusing on key cities and not at a mass market segment.
Unsatisfied with the performance of its confectionery business, Hindustan Lever company is the confectionery business being run under the Max brand. It has also withdrawn Kissan Bistix, Soupy Snacks among others.
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