HUL expects surge in FMCG demand, rules out short-term price hike

April 25, 2024

Hindustan Unilever (HUL), a prominent FMCG manufacturer, anticipates a gradual increase in overall demand without any imminent price hikes in the near future, according to CFO Ritesh Tiwari.

Additionally, he noted that the collective demand for fast-moving consumer goods (FMCG) from rural areas, which had been dwindling, has begun to show sequential growth and is poised to gain further momentum in the upcoming quarter.

Tiwari expressed optimism, stating, “We anticipate a gradual improvement in FMCG demand. Forecasts of above-normal monsoons and strengthening macroeconomic indicators bode well. We project a low single-digit decline in price growth for the first half of FY24,” during the earnings call.

Regarding prices, he mentioned that if commodity prices stay stable, they will “level off in the medium term and show positive growth at low single-digit rates by the conclusion of this fiscal year.”

Continue Exploring: Hindustan Unilever’s net profit dips 1.53% to INR 2,561 Crore in Q4 FY24

He anticipates a slight uptick in prices in the low single digits for the latter half of FY 2024-25.

In the past few quarters, HUL has successfully implemented price adjustments across all its portfolios.

During the March quarter, HUL experienced a reduction in prices for its Home Care and Personal Care products due to deflationary pressures on commodity prices.

“We have successfully adjusted our prices to reflect the benefits of commodity deflation across all sectors of HUL,” he stated, emphasizing, “Furthermore, there is no justification for any further sequential price increases.”

If commodity prices remain unchanged, their year-on-year impact will persist.

“Which means in short term, we will see a slight decline in low single digit numbers in our UVG,” he said.

Regarding rural demand, Tiwari noted that it has begun to increase alongside a gradual recovery in demand.

Tiwari expressed optimism, stating, “With the favorable monsoon forecast and improving macroeconomic conditions, I am hopeful that this recovery will persist and gain further momentum.”

Meanwhile, HUL also announced top-level changes in the company, with BP Biddappa joining its Management Committee as Executive Director of Human Resources for South Asia.

It said, “Subject to shareholder approval, Biddappa will soon join the Board as a Whole Time Director.”

Anuradha Razdan, Executive Director, Human Resources, HUL, and Chief HR Officer, South Asia, will be named Unilever’s Global Chief Reward & Organisation Development Officer.

It further stated that this adjustment will take effect from June 1, 2024.

Continue Exploring: Hindustan Unilever rebrands Horlicks as ‘functional nutritional drink,’ drops ‘health’ label amid regulatory changes

Swiggy gets green light from shareholders for $1.2 Billion IPO

SnackTeam

April 25, 2024

Foodtech giant Swiggy has secured approval from its shareholders for its initial public offering (IPO), as disclosed in regulatory filings. The company intends to raise up to INR 3,750 crore ($450 million) in fresh capital, alongside an offer-for-sale (OFS) component of up to INR 6,664 crore ($800 million), as per submissions to the Registrar of Companies.

Swiggy, yet to submit its IPO paperwork to India’s capital markets regulator, the Securities and Exchange Board of India (Sebi), aims to raise approximately INR 750 crore from anchor investors in a pre-IPO round. Swiggy’s IPO is part of a cohort of emerging startups preparing to go public this year, joining companies like omnichannel retailer Firstcry, Ola Electric, and Awfis, among others.

The filing stated that, “the shareholders of the company have granted consent and approval for the creation, issuance, offering, allocation, and/or transfer of its equity shares, amounting to a total of INR 37,501 million through a fresh issue of equity shares. Furthermore, certain existing shareholders are authorized to offer for sale equity shares up to an aggregate amount of INR 66,640 million.”

Continue Exploring: Swiggy transitions to publicly traded company ahead of $1 Billion IPO

The special resolution was approved during an extraordinary general meeting (EGM) of Swiggy’s shareholders held on April 23.

Dutch-listed Prosus holds the largest stake in Swiggy at 33%, followed by SoftBank. Additional shareholders include Accel, Elevation Capital, Meituan, Norwest Venture Partners, Tencent, DST Global, Qatar Investment Authority, Coatue, Alpha Wave Global, Invesco, Hillhouse Capital Group, and GIC.

According to data platform Tracxn, the company’s cofounders Sriharsha Majety, Nandan Reddy, and Rahul Jaimini hold stakes of 4%, 1.6%, and 1.2%, respectively. Jaimini transitioned from his operational role in 2020 to join another venture, Pesto Tech.

Continue Exploring: IPO-bound Swiggy appoints Titan’s Suparna Mitra as independent director

During the April 23 EGM, Majety and Reddy were appointed as executive directors of the company. Majety assumed the role of managing director and group CEO, while Reddy was designated as a whole-time director and head of innovation.

Queries directed to a Swiggy spokesperson remained unanswered.

In the fiscal year that ended in March 2023, Swiggy reported revenue from operations of INR 8,265 crore, a 45% jump from FY22, while its net loss also increased 15% to INR 4,179 crore.

On April 9, Snackfax reported that Invesco, the lead investor in Swiggy’s $700 million round in January 2022, raised the company’s valuation to $12.7 billion. Additionally, Baron Capital, another investor in Swiggy, increased the company’s fair value to $12.1 billion in its recent accounting cycle.

Continue Exploring: Invesco marks IPO-bound Swiggy’s valuation at $12.7 Billion, up 18% from last fundraise

Hindustan Unilever rebrands Horlicks as ‘functional nutritional drink,’ drops ‘health’ label amid regulatory changes

SnackTeam

April 25, 2024

In response to recent regulatory shifts in the health drinks sector, Hindustan Unilever (HUL) executed a notable rebranding strategy. The company has opted to relabel its ‘health food drinks’ category as ‘functional nutritional drinks’ (FND) and has removed the ‘health’ label from Horlicks.

During the earnings press conference on April 24, Ritesh Tiwari, the Chief Financial Officer of Hindustan Unilever, unveiled the change. Tiwari stressed that the transition to the FND label offers a more precise and transparent portrayal of the category. He underscored the untapped potential of the FND market, signaling substantial avenues for growth.

The Food Safety and Standards Authority of India (FSSAI) recently directed e-commerce platforms to refrain from classifying dairy, cereal, and malt-based beverages as ‘health drinks’ or ‘energy drinks‘ due to the lack of legal clarity. This measure aims to prevent consumer confusion and misleading advertising practices. The regulators are closely monitoring the health drinks category because the Food Safety and Standards Act 2006 lacks a definition of ‘health drinks’ effectively.

This move comes after concerns were raised about high sugar levels in beverages, as evidenced by Mondalez India-owned Bournvita‘s investigation a few days ago.

Continue Exploring: Nestle faces regulatory heat as FSSAI launches probe into Cerelac sugar controversy

Recently, the government instructed ecommerce platforms that beverages such as Bournvita shouldn’t be termed as health drinks due to the absence of such categorization in the country’s food laws.

“All ecommerce companies/portals are hereby advised to remove drinks/beverages, including Bournvita, from the category of ‘health drinks’ on their sites/portals,” stated the commerce and industry ministry in a notification.

Last year, Cadbury Bournvita, India’s most popular malted drink, became embroiled in controversy when a social media influencer claimed that the beverage contained high sugar levels.

Mondelez India, the owner of Bournvita, issued a legal notice to the influencer, compelling them to remove the video. However, the situation escalated into a controversy, prompting the National Commission for Protection of Child Rights (NCPCR) to demand the brand to retract all deceptive packaging, advertising, and labels.

Earlier this month, the Food Safety and Standards Authority of India (FSSAI) directed ecommerce platforms to refrain from categorizing dairy-based or malt-based beverages as ‘health drinks’.

Continue Exploring: FSSAI directs e-commerce companies to stop labeling dairy and cereal-based beverages as ‘health’ or ‘energy’ drinks

The latest directive from the commerce and industry ministry comes in response to an inquiry by NCPCR — a statutory body constituted under the Commission for Protection of Child Rights Act, 2005.

As per the notification dated April 10, it was noted that there is no definition for ‘health drink’ under the FSS Act 2006, rules, and regulations, as submitted by FSSAI and Mondelez India Food Pvt Ltd.

Nestle faced scrutiny when reports emerged that the brand includes sugar in infant milk sold in less affluent countries such as India, while not doing so in its main markets like Europe or the UK.

The revelation surfaced when “Public Eye,” a Swiss investigative organization, and IBFAN (International Baby Food Action Network), sent samples of the company’s baby food products marketed in Asia, Africa, and Latin America to a Belgian laboratory for analysis.

Continue Exploring: Nestle India responds to sugar concerns in baby food, highlights 30% reduction in added sugars over 5 years

Subsequently, the Food Safety and Standards Authority of India (FSSAI) launched an investigation into the sugar content controversy surrounding Nestle’s Cerelac products.

In light of the allegations, FSSAI reiterated its dedication to conducting a comprehensive investigation into the matter. Should Nestle be found culpable, the regulatory authority has pledged to take rigorous measures against the brand. As part of the inquiry, a committee will be convened to scrutinize the particulars of the case.

In swift response to the controversy, the brand issued a clarification. ANI quoted the company stating, “We want to assure you that our Infant Cereal products are manufactured to provide the essential nutritional elements, including Protein, Carbohydrates, Vitamins, Minerals, Iron, etc., necessary for early childhood.”

“We maintain an unwavering commitment to the nutritional quality of our products, both now and in the future. Utilizing our expansive Global Research and Development network, we continuously strive to enhance the nutritional profile of our products,” the statement emphasized.

Continue Exploring: Nestle shareholders push for healthier food sales amid concerns over nutritional impact

India to enforce compulsory ETO testing for spice exports to Hong Kong and Singapore

SnackTeam

April 25, 2024

The government on Wednesday said that it will implement mandatory testing for ethylene oxide (ETO) contamination in its spice exports to Singapore and Hong Kong.

Ethylene oxide (ETO) is categorized as a carcinogenic pesticide.

The decision comes after Singapore and Hong Kong imposed bans on specific spices exported by Indian brands MDH and Everest, alleging the presence of ethylene oxide (ETO). The government further stated that spice shipments to other nations will also undergo rigorous scrutiny for ETO presence.

Continue Exploring: India seeks details from Singapore, Hong Kong food regulators following MDH and Everest spice bans

According to officials, the decision was made following meetings between the commerce and industry ministry, the Spices Board, and industry stakeholders.

Currently, spice exports to these nations require compulsory testing for Aflatoxin, a carcinogen, and Sudan I-IV, a dye. However, for consignments bound for the EU and the UK, mandatory ETO testing is in place. An official stated, “We have established protocols for obligatory ETO testing in spice shipments bound for Singapore and Hong Kong. Before implementing these mandatory standards, we engaged with the industry and sought the views of exporters.”

The action was initiated following Singapore’s allegation of the presence of ethylene oxide (ETO) exceeding permissible limits in Everest’s Fish Curry Masala, while Hong Kong claimed to have detected the pesticide in three MDH products—Madras Curry Powder, Mixed Masala Powder, and Sambhar Masala—alongside Everest’s Fish Curry Masala.

Continue Exploring: FSSAI launches quality checks on MDH and Everest spice mixes following reports of high ethylene oxide levels

Lucky Chan expands its presence in Bengaluru with third outlet at South Forum Mall

SnackTeam

April 25, 2024

Lucky Chan has opened its third outlet, strategically positioned in the bustling Forum South Bangalore mall. This expansion stands as a pivotal moment for the brand, reinforcing its dedication to sharing its signature blend of comfort food and vibrant ambiance with an even broader audience.

From its inception, Lucky Chan has distinguished itself as a unique culinary hotspot. Leading the way with India’s inaugural Sushi Belt, the brand continually sets new standards for inventive Asian fare. Its expansive menu caters to a range of tastes, boasting a delightful selection of non-vegetarian, vegetarian, and vegan dishes. With a steadfast commitment to excellence and guest delight, Lucky Chan has firmly entrenched itself as a beloved fixture in the local dining scene.

Continue Exploring: P.F. Chang’s continues Indian expansion with second restaurant opening in Gurugram’s CyberHub!

Situated strategically within the Forum South Bangalore mall, this new outlet caters to a vibrant market teeming with culinary enthusiasts. Its prime location, combined with the brand’s dedication to delivering an unmatched dining experience, sets the stage for a flourishing Lucky Chan community. More than just meals, it aims to foster a sense of unity and culinary zeal among its patrons. Featuring a mix of beloved signature dishes and enticing new additions, the menu promises something for everyone to enjoy.

With a goal of opening 10 outlets across Bangalore by the end of the fiscal year, the brand is determined to extend its popularity to every district of the city.

Continue Exploring: Haldiram’s Nagpur delights Bengaluru with latest restaurant in Malleshwaram

Zomato tests priority deliveries in Bengaluru, Mumbai with extra charges

SnackTeam

April 25, 2024

Continuing its streak of experiments, foodtech major Zomato is now testing a new feature in parts of Bengaluru and Mumbai that offers priority deliveries to users at an extra charge.

According to a report by Moneycontrol, a user in Bengaluru was offered food delivery within 16-21 minutes by paying an additional INR 29. The standard delivery time for the same order was displayed as 21 minutes on the app.

The company is charging an additional fee for priority deliveries from Zomato Gold users as well, according to the report.

Sources within the company have confirmed the development and stated that the offering is being piloted in select areas in Bengaluru and Mumbai.

Continue Exploring: Zomato pilots new last-mile delivery service for office goers in corporate parks

The newly introduced feature will support the foodtech major’s profitability by providing an additional source of income.

This development comes at a time when Zomato has been experimenting with a range of new offerings to boost its revenue. Earlier this month, reports emerged that Zomato was piloting last-mile delivery services for office-goers within corporate parks. Last week, it also unveiled an all-electric “large order fleet” designed to handle orders for up to 50 people at once.

Continue Exploring: Zomato launches all-electric ‘large order fleet’ for events and gatherings

In addition, last month, it introduced a “Pure Veg Fleet,” complete with green uniforms and a new mode on its app catering to customers with 100% vegetarian dietary preferences. However, the decision to outfit the delivery executives of the new fleet with green uniforms was swiftly reversed after facing criticism online.

Just this week, the foodtech giant raised its platform fee by 25% to INR 5 per order in its key markets, including Delhi-NCR, Bengaluru, Mumbai, Hyderabad, and Lucknow. Adding to this adjustment, the company also made the decision to suspend its intercity delivery service, ‘Intercity Legends,’ as part of its efforts to streamline and consolidate operations.

Continue Exploring: Zomato raises platform fee to INR 5, temporarily halts intercity delivery service

Zomato’s shares have been soaring on the stock exchanges, fueled by the company’s robust financial performance and increasing profitability. In the quarter that ended in December 2023 (Q3 FY24), Zomato saw its net profit surge to INR 138 Cr, quadrupling from INR 36 Cr in the previous quarter.

In Q3 FY24, operating revenue increased to INR 3,288 crore from INR 2,848 crore in Q2 FY24.

Consequently, Zomato’s shares have surged by over 200% in the past 12 months and by nearly 50% on a year-to-date (YTD) basis.

Moreover, brokerages have expressed confidence in the foodtech giant. Kotak Institutional Equities maintained a ‘BUY’ rating on Zomato and raised the price target (PT) to INR 210, while Motilal Oswal identified the stock as one of its top picks.

Zomato’s shares concluded Wednesday’s (April 24) trading session down by 1.68% at INR 184.4 on the BSE.

Continue Exploring: Zomato’s shares surge to record high, nearing INR 200 mark as Kotak raises price target to INR 210

Heineken surpasses Q1 beer sales targets, maintains 2024 outlook

SnackTeam

April 24, 2024

Heineken sold more beer than anticipated in the first quarter, marking its first quarterly year-on-year growth in volumes in a year, while also adhering to its forecast for profit growth in 2024.

On Wednesday, the world’s second-largest brewer announced that beer volumes experienced a 4.7% organic increase during the January-March period. This surpasses the 2.5% growth anticipated by analysts in a poll provided by the company.

Its shares climbed by up to 1.6%, but later trimmed some of the gains, trading 0.4% higher by 0805 GMT.

Heineken’s primary focus this year is on reviving volume growth, which took a hit in 2023 due to price hikes aimed at offsetting escalating costs spanning from energy to barley.

Continue Exploring: Heineken takes a refreshing turn with Strongbow Zest Cider debut!

In a statement, CEO Dolf van den Brink highlighted that all regions experienced increased volume and net revenue.

He further noted that the quarter benefitted from an earlier Easter and one-time effects.

Nevertheless, the brewery indicated that it still perceives the economic environment as “challenging and uncertain.”

“While we had a strong beginning to the year, we caution against extrapolating the reported top-line growth for the remainder of the year,” the company stated.

In February, Heineken disappointed investors by providing a broad forecast range for operating profit growth, suggesting it could fall anywhere between low to high single-digit percentages for the year.

Its cautious outlook at the beginning of the year was partly influenced by uncertainty in two crucial markets, Vietnam and Nigeria, where economic conditions had weighed on its performance the previous year.

Heineken reported that total volume in Nigeria increased by nearly 20%. In Vietnam, where destocking was necessary last year, volume saw a low-teens growth.

Analyst Laurence Whyatt from Barclays highlighted a rebound in the high-margin market of Vietnam, along with promising performances in Mexico and Brazil.

Continue Exploring: US craft beer production declines in 2023 despite record brewery numbers; market share inches upwards

“In our assessment, it’s undeniable that the underlying business seems to have turned a corner, and we anticipate further improvements throughout the year,” he stated in a note.

Heineken reported that its namesake brand claimed the top position by value in the quarter in Brazil, with beer volume experiencing a high-single-digit growth.

Before considering one-time items, net revenue increased organically by 9.4% to 6.85 billion euros ($7.33 billion), surpassing analysts’ expectations of 7.2% growth. However, currency translation decreased this figure by 4.6%, according to Heineken.

Corby Spirit and Wine expands portfolio with acquisition of Nude Beverages

SnackTeam

April 24, 2024

Corby Spirit and Wine Limited has acquired the Canadian ready-to-drink brand, Nude Beverages.

Majority owned by Pernod Ricard, the company is set to pay C$11 million ($8 million) for the acquisition of the Nude brand from MXM Beverages. The transaction was conducted via Corby Spirit and Wine’s subsidiary, Ace Beverage Group.

Established in 2017 and based in Vancouver, Nude Beverages specializes in ready-to-drink beverages that are free from sugar and sweeteners. Their inaugural product, a 5% sugar-free vodka soda, debuted in the same year. Among their offerings are the brands Los Flamingos and Slappy’s.

Ace Beverage Group CEO Cam McDonald stated, “Nude’s significant presence as a leading player in the western Canadian ready-to-drink market aligns seamlessly with our established position in Ontario, providing a solid foundation for a nationwide platform to introduce innovative ready-to-drink products to consumers across the country.”

Continue Exploring: Next Century Spirits bolsters portfolio with acquisition of six Southwest Spirits & Wine brands

The completion of the deal is contingent upon meeting closing conditions and obtaining approval from the Supreme Court of British Columbia. Corby Spirit and Wine anticipates finalizing the acquisition in the latter half of 2024.

Since 2005, Pernod Ricard has maintained a 51% ownership stake in Corby Spirit and Wine.

Last year, Corby Spirit and Wine obtained a 90% ownership interest in Canadian ready-to-drink producer Ace Beverage Group.

The agreement, valued at C$185.5 million ($111 million), incorporated an opportunity for Corby to acquire the entire ready-to-drink manufacturer by exercising call options on the remaining shares, which can be executed in 2025 and 2028.

Formed in 2020 through the merger of Cottage Springs and Ace Hill, Ace Beverage Group emerged as one of Canada’s leading independent producers of ready-to-drink beverages. Its primary brands include Cottage Springs vodka soda and vodka water, Ace Hill, and Tequila soda.

In 2022, Pernod Ricard allocated $22 million towards enhancing its ready-to-drink cocktail production capabilities in North America by investing in a production facility in Fort Smith, Arkansas. This investment encompassed the installation of a high-speed canning line along with eight 50,000-gallon (190,000-liter) tanks.

Continue Exploring: J&J Snack Foods expands portfolio with acquisition of Thinsters cookie brand

Starbucks brings fresh flavors to Latin America and the Caribbean with new beverage lineup

SnackTeam

April 24, 2024

Starbucks has introduced its latest array of summer drinks in Latin America and the Caribbean (LAC).

The selection includes the Retro Pink Frappuccino, Iced Retro Pink Starbucks Matcha, and a range of lemonade-infused beverages.

Starbucks stated that the Retro Pink Frappuccino combines cold milk, vanilla syrup, and a creamy Frappuccino base, alongside frozen red dragon fruit pieces, all topped with vanilla whipped cream.

The Iced Retro Pink Starbucks Matcha merges matcha green tea powder with chilled milk and ice, finished with Red Dragon Fruit Cold Foam, presenting a fresh take on the traditional iced matcha.

Continue Exploring: Starbucks expands footprint in Chile, opens first store in Osorno

The company’s fresh lemonade selections feature the Strawberry Frozen Lemonade and Dragonfruit Frozen Lemonade, alongside the Iced Pink Berries Shaken Lemonade and Iced Strawberry Shaken Lemonade.

Alongside the matcha and lemonade beverages, Starbucks is reintroducing the Mocha Cookie Crumble Frappuccino and the Caramel Ribbon Crunch Frappuccino.

The Mocha Cookie Crumble Frappuccino combines Frappuccino chips and mocha sauce with milk and ice, finished with whipped cream and chocolate cookie crumble on top.

The Caramel Ribbon Crunch Frappuccino delivers a caramel scent and a rich roasted coffee flavor.

Starbucks is also reintroducing two coffee selections: the Sun-Dried Brazil Carmo De Minas, characterized by its caramel and hazelnut notes, and the Papua New Guinea Highlands coffee, renowned for its herbal nuances accompanied by hints of sugarcane and black cardamom.

In addition to the beverage debut, Starbucks is unveiling a fresh limited-edition drinkware collection at its LAC stores.

Earlier this month, Starbucks introduced the Spicy Lemonade Refreshers beverage and a new Spicy Cream Cold Foam in Canada.

Continue Exploring: Starbucks unveils Spicy Lemonade Refreshers across Canada!

Hindustan Unilever’s net profit dips 1.53% to INR 2,561 Crore in Q4 FY24

SnackTeam

April 24, 2024

FMCG giant Hindustan Unilever Ltd (HUL) has reported a 1.53% decline in consolidated net profit to INR 2,561 crore for the fourth quarter ending on March 31. The company had a net profit of INR 2,601 crore during a similar period in the previous fiscal year, according to a BSE filing.

Nevertheless, according to the regulatory filing, the total income for the quarter rose to INR 15,441 crore, compared to INR 15,375 crore during the corresponding quarter of the previous year.

For the fiscal year ended March 31, 2024, the company’s consolidated net profit stood at INR 10,282 crore. It had posted a net profit of INR 10,143 crore in the fiscal year 2022-23.

In FY24, its total income increased to INR 62,707 crore compared to INR 61,092 crore in FY23.

Continue Exploring: Hindustan Unilever evaluates options for ice cream business future amid global restructuring by parent company

Regarding the company’s financial performance, Rohit Jawa, CEO and managing director, stated, “In FY24, we achieved a resilient performance with a 3% USG and surpassed the INR 10,000 crores Net Profit milestone. Our focus remains on enhancing operational excellence, restoring gross margins, and increasing investments in brands and long-term capabilities.”

Jawa also expressed, “Moving ahead, I am optimistic about the gradual improvement in consumer demand, driven by a normal monsoon and enhanced macro-economic indicators. With increasing affluence, relatively lower FMCG consumption, and robust digital infrastructure, I maintain a high level of confidence in the medium to long-term prospects of the Indian FMCG sector.”

Jawa added, “To meet the evolving aspirations of Indian consumers, we have initiated a ‘Transform to Outperform’ journey. Our primary focuses include enhancing our core through unmatched brand superiority, market expansion, premiumization, portfolio optimization for high-growth areas, and leadership in future channels. Leveraging our unique capabilities, we are poised to sustain success in the Indian FMCG sector.”

The company’s shares ended 0.16% down at INR 2,259.15 apiece on the BSE.

Continue Exploring: Hindustan Unilever grapples with market shift as niche brands gain ground in India’s consumer landscape

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