The 5 Reasons for HUL’s Decline in Profit in the Year 2009.

Year 2009 has passed with many ups and downs for FMCG industry. Many products introduced and many re launched by different major companies of India. As the result, there was a mixed reaction of profit and loss of many major companies. HUL, the biggest FMCG company of India has doe good job in the last year but in spite of all of it’s activities, It was unable to prevent the decline in the net profit. It faces a decline of 2.7% in the net profit as compare to the earlier year. HUL’s business grows up in the personal care segment but soaps and detergents registers only a growth level of 1% this a negative side for the company. The food and beverages department able to register a profit level of 13% which is a steady growth for the company.

The main question arise that what is the basic reason for the decline of the profit of the company? Now for that, there are several reasons which can be describe in the following points :-


1. EXTRA EXPENSES ON ADVERTISEMENT :- Advertisement is a major part of the marketing promotion. Every company uses it as a major tool for the success of the product. But there is some limitations and principles of advertisement, which says that the cost of advertisement must e affordable and not higher than normal profit limit. Secondly, it is also said that advertisement should be long time effectible. As compare to the case of HUL, it is lacking in the both the major basic principles of the advertisements. It’s expenses on the adds of some soap , oral care brands like Lifeboy, close up was too much and it adds for the same products more times in a months. Ex. For lifeboy, there are more than five or six different kinds of adds of different models has been introduced. As the result, the present time demand for the product has been little bit increased but it caused the long term loss for the product and company.

2. COUNTER FIGHT BETWEEN OWN PRODUCTS ;- HUL’s Lux brand of soap was earlier known as the luxury and fairness soap and lifeboy was known as the economical soap. But the company promote Lifeboy soap as a luxury soap and makes more expenses on it’s attractive packaging and promotion. This was not happens only with soaps but also it was same story with shampoos and tea. These all caused for poor opportunity cost and less profit of the company in the long time.

3. PERSONAL ETHICS :- Personal ethics is a core for the long term profit of a company. Personal ethics stands for speaking truth, keeping the promise, fulfilling the commitments etc. HUL founds breaching the personal ethics many points in the last year. The major story is related with a promotion champagne of Lifeboy soap. Where the company promotes the brand as a best soap to take protection from swine flue. But in the reality, there was no any major contents include I the Lifeboy soap whch can save a person from Swine Flue. So, such kind of promotion effects the brand image of the company.

4. EXPANSION – Expansion is a need to grow, but at the position where the company is doing as good as captureing the total market of 50% or more, then there is no any need for expansion. The company has adopts a policy of expansion from last number of years. As the result it entered into many new business. Among them, many were loss making, e.g- entering in the coffee business by introducing Bru. Which caused some initial profit , but now, It is effecting the profit of the company.


5.COMPETITION ;- Competition increased in Indian FMCG sector from the last decade. Many MNCs has been already entered in the Indian market and many are waiting for make an entry. These effects the business and going to end the monopoly of only one company in the market. Colgate –Palmolive was the one of the major rival of HUL I the oral care segment . HUL never touches their position from last 20 years. Now other competitors in many different segments like Tata tops in the tea, P&G is giving a great competition in Shampoos and detergents, GCPL in soaps, Emami in fairness cream etc are giving a tough competition to HUL . Also some other FMCG major giants like ITC, Dabur are giving good competition and force it to expand more on promotional activities.

THE TOP 5 SHAMPOOS OF INDIA IN THE YEAR 2009

The shampoo industry with a market size of Rs. 4000 cr has shows a increasing growth in the year ending 2009. Major FMCG companies has done a good business in the shampoos segment. Where Dabur earns 31% growth in the shampoos at the same time P&G shows a growth of 35% in the shampoos. FMCG head HUL shows a good turnover in the shampoos segment but at the same time faces a declining profit as compare to the last year due to the heavy advertising expenses. The brief report of the performance of the shampoos can be given as follows:-

1. Heads & Shoulders :- Heads & Shoulders has done a good business in the year 2009 in both bottle and sachet segments. It is more preferred due to it’s new anti dandruff formula and hair falling control. Presently it has a market share of 38% of all Indian market.


2. Clinic Plus :- After being the No.1 shampoo of India in a raw from last nine years, clinic plus’s monopoly comes to an end. This popular shampoo has looses it’s market position in the some states of India. Presently it having a market share of 29%.of all Indian shampoo market.


3. Pantene :- The world famous brand of P&G is doing it’s best business in India from many years. It is more preferable by both male and female customers. It’s scathe segement is also doing good business.


4. Dabur Vatika :- Vatika is the repudiated name of shampoo brand from the stable of Dabur. It is the major profitable segment of the company in last quarter ended July 2009. It is doing good business in rural and urban India.


5. Garnier :- The world famous brad of Lorel has been able to make an entry in the list of top 5 shampoo brands of India for the last year 2009. It is more preferable in upper middle class and top class peoples.


6. Others :- there are also some other brands like Clinic All Clear, Sehnaaz Hussain, Chick, etc are showing ups and downs in the year 2009.

THE TOP 5 BEAUTY CREAM OF THE YEAR 2009

Personal care segment which consists the 35% of all the FMCG sector of India. It has shown a good growth in the last year. Many of the new products introduced in the market and the existing one has also done a good market . The market leader HUL shows a decreasing growth with a market share of 44.5% which was 55% in the year 2008. A brief overview of all those products can be given as follows :-


1. Fair & Lovely :- Fair & Lovely leads the market with it’s five segments. More than the half of the market of fairness cream has been covered by Fair & Lovely. The Rs.5 sachet of Fair & Lovely has done a good job in the rural and semi urban markets. It’s multivitamin cream has remain No.1 in the third year in a raw.


2. Fairever: – Fairever fairness cream is one of the emerging fairness cream of the year 2009. It done a good business in South India as well as metros and the northern states(Lucknow, Allahabad, Ghaziabad, Varanasi etc,). The unique combination of saffron and milk has made it the beauty secret of millions of beautiful Indian women. Actress Asin has given a new and popular publicity to Fairever. She is the brand ambassador of the company.


3. Emami Malai Kesher Cream :- Emami malai kesher cream has slipped from number 2 to 3 in the year 2009. The company’s pioneer brand in the fairness cream segment ha shown a steady growth in the year 2009.


4. Fair & Handsome :- the No. 1 cream in for the men has done the good business un the year 2009. It is the biggest brand in the fairness cream for the men. The variation in the product line made it more popular. Rs. 5 and Rs. 10 creams are much popular in semi urban and rural markets.


5. Dabur Uveda :- Dabur Uveda has been introduced in the month of July and it has shown a green signal to the company . the brand ambassador Vidya Balan has givesn a good publicity to the brand. It occupies the 5th position in the fairness cream market of India.
COMPANY PRODUCT MARKET SHARE
HUL FAIR & LOVELY 45%
CAVIN CARE FAIREVER 18%
EMAMI MALAI KESHER CREAM 10%
EMAMI FAIR & HANDSOME 7%
DABUR UVEDA 4%
OTHERS 16%

Barista to bring wine to everyone

With Barista Lavazza's deal with Sula Vineyards, it seems plausible that they maybe the ones that will do the most to build interest around wine in India. As covered earlier in Sommelier India, Barista has sought state licenses sell liquor in its coffee shops. Certain outlets like the Defence Colony Barista in Delhi already serve wine. Shiv Singh comments on the Barista evolution.

It was only in September that Barista formalized a deal with Sula Vineyards to supply wine for its coffee shops. At the same time, it also struck a deal with Fosters to serve beer in them as well. It is also experimenting with liqueurs. The liqueur coffee has expresso as its base with a dash of liqueur ranging from Teacher's Scotch whisky, Irish whisky, Baileys Irish cream, rum or vodka and is priced between Rs. 199 to Rs. 299.

Can you imagine a future in which your day time coffee shop turns into a bar in the evening? Or you step into your coffee shop and find people at the next table sniffing wine instead of sipping cappuccinos? Visit the Defence Colony Barista to get a glimpse into this future.

They have had to make changes to the Barista to allow for the serving of alcohol. For starters you cannot see inside the Barista anymore. The glass panes have been glazed. The menu has of course changed and it is interesting to note that with only one wine brand being served the choices are limited. This is a smart, economic move on Barista's part - to only serve one brand and have fewer issues with inventory. And needless to say, Sula Vineyards is not a weak brand by any means - it took home several medals at the recently held Sommelier India Wine Competition.

All in all, the strategy makes sense for Barista - test it out in select outlets to see whether it drives more customers in, keeps them long and especially later into the evenings. On the part of Sula, it gives them a potentially huge distribution outlet in the form of the Barista's across the country and a means to popularize both wine as well as their own brand. I wouldn't be surprised if Grover Vineyards is in discussions with Cafe Coffee Day.

Barista's 2008 revenues were Rs. 150 crore and it is expecting to finish 2009 with Rs 225 crore in revenue. For the next year, the company has a target of Rs 300 crore. It currently enjoys 25 per cent of the coffee chain retail market in India though outlets that serve alcohol will only be a small fraction of those in the short term.

CADBURY DAIRY MILK IN A NEW INTERNATIONAL PACK

Cadbury’s much loved flag-ship brand Cadbury Dairy Milk now comes to its loyal consumers’ in a brand new, premium packaging. The change into a premium, international packaging is the first in 7 years for the biggest chocolate brand in India!

The fine purple and gold packaging portrays the rich and creamy taste of Cadbury chocolate. The smooth and sophisticated eating experience of India’s most loved chocolate brand is creatively conveyed in the new international pack with the gold Cadbury logo.



“The new international packaging while retaining the color purple, a color that has become synonymous with Cadbury, creatively works the other graphic elements. The gold Cadbury Logo embodies the premium and sophisticated eating experience of Dairy Milk , while the real chocolate chunk on the pack enhances its chocolate appeal. The new Dairy Milk logo against the all purple backdrop helps reinstates the goodness of milk in CDM”, said Sanjay Purohit, Executive Director- Marketing , Cadbury India .

The chocolate that has a huge fan base across many countries will now also have a more integrated look and feel. The new design is the international pack sold across the world.

Cadbury rejects Kraft takeover bid

British confectionery group Cadbury today rejected a takeover bid from US giant Kraft Foods, describing the offer as insufficient.

Cadbury management said it was offering shareholders maximum value by keeping the company independent, notably as it was raising its long-term financial targets.
"Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model," said Cadbury chairman Roger Carr in a circular to shareholders.

"Don't let Kraft steal your company with its derisory offer."





Cadbury said it now foresaw organic growth of 5.0 to 7.0 per cent a year, a profit margin of 16-18 per cent by 2013 and double-digit growth in dividends per share starting next year.

Kraft, which has been repeatedly snubbed by Cadbury management, had appealed directly to Cadbury shareholders with details of its offer, now worth about 9.9 billion pounds (11 billion euros, $16.1 billion) in cash and shares, down from an initial 10.2 billion pounds.

Kraft is the world's second biggest snacks group after Nestle. Cadbury is meanwhile the second largest confectionery company behind Mars.

A tie-up between Kraft and Cadbury would merge leading Kraft brands Oreo biscuits and Maxwell House coffee with Cadbury's Dairy Milk chocolate and Trident chewing gum.

UNFRIED CHIPS BY MONACO

Monaco's healthy but tasty route



Parle eyes 25% share in the Rs 6,500 crore branded snacks market, from 7% now

After the price war, snacks makers have made the ‘health’ platform their new battleground. While PepsiCo recently positioned cracker brand Aliva as a health food, Parle Products has gone a step ahead with Monaco Smart Chips, which the company claims, is not fried – a first in the chips segment.
“The idea was to give today’s health-conscious consumers a smart choice – healthy, but tasty,” says Shalin Desai, Senior Brand Manager, Parle Products. “Since no other chips are available in the health segment, Monaco Smart Chip’s brand equity is its differentiation”, Desai adds.
Brand experts are impressed. Harish Bijoor, brand-strategy specialist and CEO, Harish Bijoor Consults Inc, says it’s a clever positioning. While every chips manufacturer is occupying the fun and taste range (Aliva isn’t a chips brand), Monaco is trying to occupy the high-ground of smart-eating.
With the extension of Monaco, one of its strongest and fastest-growing brands in biscuits, to chips, Parle is eyeing a 25 per cent market share (from around 7 per cent now) in the Rs 6,500 crore branded snacks market, which has been growing at 15-20 per cent annually.
Smart Chips is available in four flavours: tangy tomato, crazy chaat, simply salted, and macho masala in Rs 5 and Rs 10 price points.
The company forayed into the non-biscuit snacks with Musst Chips and Musst Stix one and a half years back and competes with market leader Frito-Lay’s (Pepsico subsidiary) Lay’s and ITC’s Bingo. Lay’s leads the pack with 48 per cent market share followed by ITC Bingo’ 13 per cent.
Bijoor says the smart positioning has been reinforced by an equally smart TV commercial showing its brand ambassador Aamir Khan, distributing XXL size T-shirts to people having chips. The underlying message is you become obese if you have unhealthy chips. The ad ends with Khan approaching a smart-looking teenager with the T-shirt, only to find that he is already munching Monaco Smart Chips. The ad ends with a punch line – “Better switch to Smart Chips”.
As a positioning, health isn’t anything new for a foods brand. Even confectionery makers such as Cadbury and Nestle have added chocolates to the growing list of food products promising nutrition that includes biscuits, energy drinks and fast food. Examples: Cadbury’s glucose Perk and Nestle’s Milky bar Choo.
Where Monaco has scored is the first mover advantage in the chips segment. But competitors like Frito-Lay’s are unperturbed. The company says that it has already taken the health route by ensuring that the chips are made from the best quality potatoes which contain zero MSG, are cooked in rice bran oil (40 per cent less saturated fat) and contain zero trans fats.
With ITC’s Bingo also expected to join in soon, the battle for the ‘health’ crown in the chips segment has just begun.
Watch this space

GLOW WITH ASIN CONTEST

HUL LOOSING IT'S SHARES IN LAUNDRY SEGMENT

A recent research note from broking firm Sharekhan Ltd quotes AC Nielsen retail data that shows HUL’s volumes in key categories such as soaps, laundry bars and shampoos have declined in October, by 9.5%, 5.5% and 5.5%, respectively, over the same period last year. Washing powder volumes grew by 7%, however, which is a key positive. Market shares in some categories are improving too. The December quarter’s results will provide some clue of which way its performance is headed, and how much time HUL has before it recovers.
It will be under pressure to deliver—usually it is an outperformer in the Unilever Plc stable. Its parent Unilever went through the same volume decline that it did, but has pulled back, with volumes growing by 3.6% in the September quarter. If the trend in volume declines continues, then HUL’s results in the December quarter may not be all that great. But occasionally, retail sales trend data and company sales data diverge, especially during volatile periods such as the one we are seeing. Investors will hope that the company has better sales growth numbers to report.

Meanwhile, P&G has launched Tide Naturals, which will compete with Rin in the detergent powder segment. As of now, there are no signs that P&G is going to start a bruising price war again. A longer-term competitor is a worry but will not immediately hurt HUL’s growth or margins. A key positive trigger will be improved volume growth, achieved without affecting its operating profit margins.

Emami gets court approval for merging Zandu operations

New Delhi: FMCG major Emami on Friday said that it has got the Kolkata High Court’s approval for merging the operations of Mumbai-based Zandu Pharmaceuticals with it.

The Kolkata-based Emami, which had acquired Zandu Pharmaceuticals last year for around Rs700 crore, said that the high court has approved the company’s scheme of arrangement on 17 November, with effect from 2 December.

“The high court of Kolkata has approved the scheme of arrangement of de-merger / merger of businesses between Emami Ltd, Zandu Pharmaceutical Works Ltd and Emami Infrastructure Ltd,” the company said in a statement.

Under the arrangement, the FMCG business of Zandu comprising all brands and corresponding assets and liabilities would be demerged into Emami Ltd while the realty undertaking of Emami and Zandu’s non-core business, including realty, are demerged into Emami Infrastructure Ltd.

Emami had bought 68.9% stake in Zandu Pharmaceutical and took management control of the latter.

“The acquisition was aimed at achieving synergetic benefits and to leverage on mutual strengths,” it added.

Emami sells personal care brands like Fair and Handsome, Navratna Oil, Boroplus Antiseptic Cream while from the Zandu portfolio, it has Zandu Balm, Menthoplus Balm among others.

NEW CADBRY PERK WITH GLUCOSE

A first for India, Cadbury Perk with Glucose Energy is a new innovation that is aimed to appeal to consumers’ taste buds. Targeted at 14-18 year olds, it is a fun treat which combines energy giving glucose with great chocolate taste.

Since its launch in 1996, Cadbury Perk has been one of Cadbury’s leading brands and a preferred choice for casual snacking with its light chocolate and wafer construct. Over the years, Perk has successfully built a distinct and iconic status for the brand among the youth of India.

Commenting on the launch, Mr. Anand Kripalu, MD, Cadbury India said, “This is the first chocolate in India to contain Glucose. The recipe breakthrough has been made possible by the Cadbury India Science & Technology team.”

The announcer advertisements will be on air from mid-November. Created by Ogilvy & Mather Advertising, it will be centered around the theme of “Naya Perk with Glucose Energy.”

Mr. V. Chandramouli, Executive Director, Strategy, Cadbury India added, “One of the key objectives for the launch is to expand the chocolate category by providing superior value to consumers in the form of taste and price. The added benefit of Glucose, gives consumers more reasons to consume Cadbury Perk. We also want chocolate consumption occasions to be regular amongst non users and thus expand the category.”

With the launch of Perk, Cadbury aims to accelerate market growth by an additional 5% annually. An integrated marketing campaign will be launched in the second week of November to create awareness around the product. The 360-degree marketing communication will encompass TV, Outdoor, tie-ups and sampling activities.

Perk with Glucose Energy consists of crispy wafer enrobed with Cadbury with two pieces in each pack affordably priced at Rs. 2/- for 7.5 gms & Rs.5/- for 21 gms. It will be available at all retail outlets across cities in the country.

NOW BURN WILL BURN INDIA

The good response of Red Bulls and it'e co products in India, now the world's top soft drink company, Coca Cola decides to launch it's premium energy drink, "BURN" in the Indian market."With the launch of Burn, the company is set to further extend its portfolio in the energy drink segment," Coca-Cola said in a statement. Priced at Rs 75 for a 250ml can, Burn is one of the most successful energy drink from the company's global portfolio.

The launch of Burn, it said, would be followed by a large scale below the line marketing activity. As part of the phased roll-out, Burn will be initially available in select premium outlets in three major cities Mumbai, Delhi and Bangalore, the company said.

"Burn is targeted at the trendsetting, socially active and adventurous young adults who require energy to experience life to the fullest," it added. This energy drink has a strong presence in Russia, Ukraine, France, Italy, Great Britain, Austria, Poland, US, Australia and South Africa.

Coca-Cola India, which mostly sells carbonated drinks in the country has various brands like Thumbs up, Sprite, Limca, Fanta, Coca-Cola, Kinley, Georgia Tea & Coffee, Maaza and Minute Maid in its portfolio.

FIAMA DI WILLIS PART 2 BY ITC

Product Description:

Fiama Di Wills recently launched a range of transparent gel bathing bars. A first of its kind, a transparent liquid gel has been solidified into a bathing bar so that consumers get a superior bathing experience. The shower gel in a bathing bar format which has been crafted through a unique and patented freezing technology. Backed by deep consumer insights, this proprietary gel bathing bar is a result of years of extensive research and development by the scientists at the ITC R&D Centre.

Uniquely crafted, these Gel Bathing Bars are shaped like dew drops, have a transparent look, rich creamy lather, and a great long-lasting fragrance. These bathing bars are dermatologically tested and proven mild and contain the goodness of natural exotic extracts like Peaches, Avocadoes, Sea Weed and lemongrass. Launched in two variants that offer specific different skin benefits, are:

Mild Dew - Contains extracts of peach and avocado which moisturise the skin

Clear Springs - Contains extracts of lemongrass & sea weed which gives Clear skin

The Fiama Di Wills transparent Gel Bathing Bars are available at an attractive price of Rs. 25 for 110 grams. This differentiated range of bathing bars offers the consumer a delightful bathing experience.

Pantalooon Retail raises Rs 500 cr via QIBs

Pantaloon Retail India, a part of Kishore Biyani-run Future Group, today said it has raised about Rs 500 crore through the issue of equities to qualified institutional buyers (QIBs).

The committee of directors (of the board), at its meeting held today, approved allotment of 1.58 crore shares under qualified institutional placement basis at a price of Rs 316 a piece aggregating to Rs 499.98 crore, Pantaloon Retail said in a filing to the Bombay Stock Exchange (BSE).
Earlier in July this year, shareholders of the company had given their approval for raising funds to the tune of Rs 1,000 crore through one or more placements of equity shares or fully convertible debentures or any securities (other than warrants) that are convertible into equity shares.
Shares of Pantaloon Retail closed at Rs 341.95, up 3.11 per cent from previous close on the BSE

Nestle India posts robust growth in Jan-Sept

Despite the economic slowdown, Nestle India, the food and beverages major, registered net sales of Rs 3,780 crore for January-September 2009, a 17 per cent jump as compared to the same period a year earlier.

In a presentation to its analysts, the company attributed the growth to “strong domestic sales and volumes”. For the nine-month period ended September 30, Nestle saw a sustained growth over the quarters, with net sales rising 16 per cent in Q1 (Jan-March); 16.8 per cent in Q2 (April-June) and 17.6 per cent in Q3 (July-September). However, the effects of the slowdown did show up. During the comparable periods a year earlier, the company’s net sales showed growth of 26.4 per cent, 23.5 per cent and 22.2 per cent, respectively.

The Nestle India management says its strong and diversified portfolio helped it tide over the financial crisis. For the nine-month period ended September 30, beverages accounted for 14.1 per cent of the company’s revenue, down 2.2 percentage points as compared to the same period last year. The prepared dishes and cooking aids segment registered a growth of 1.6 percentage points, to account for 25.5 per cent in the period. Its main revenue earner, the milk products & nutrition category, was almost flat, accounting for 46.3 per cent of net sales.

Nestle’s exports, though, did take a beating from the slowdown and indicated a dip of 8.9 per cent in volume terms and a decrease of 6.6 per cent in value terms, when compared to the nine-month period of 2008.

India among top 3 markets for Pepsico: Nooyi

She said India is a large vibrant market and should focus on developing India-specific strategies to sustain it

New Delhi: US-based beverages major Pepsico on Tuesday said India is among its top three markets and the company will continue to build India-specific strategy to sustain growth.

“For food processing companies like us, I think India represents top three markets in the world. India is a very different market from any western developed market,” Pepsico Chairman and chief executive officer Indra Nooyi said on the eve of its first-ever board meeting in Mumbai. This is the second time PepsiCo’s global board meeting will be held outside the US. The first one was held in Mexico five years ago.

She said India is a large vibrant market and should focus on developing India-specific strategies to sustain it.

“You cannot just import the western solutions to India. You have to crack solutions, which are right for India, right for the people, right for the country, right for its farmers,” she said.

On its global board meeting in Mumbai this month, Nooyi said the event will be a “historic” one as it is an opportunity to highlight issues and propose investments in India.

“I think it is going to be a historic board meeting... Show them (board members) the glory of India, the issues of India, so that we propose solutions, investments in India. They understand the context for which we are proposing thats why we have brought them to India,” she added.

ITC hikes prices of two cigarette brands

Press Trust Of India / November 19, 2009, 0:43 IST

FMCG major ITC, the largest player in the domestic cigarette market, has increased prices of two of its brands, India Kings and Benson & Hedges, by Rs 10 and Rs 5, respectively.

Sources said the company had increased the maximum retail price of a pack of 20 sticks of India Kings to Rs 110 from Rs 100. It has also hiked the price of a pack of 20 sticks of Benson & Hedges to Rs 105 from Rs 100.

According to industry analysts, the total market for branded cigarettes in India is around Rs 20,000 crore and ITC, with a portfolio of popular brands like Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake, has around 80 per cent share of the market.

When contacted, ITC spokesperson confirmed the price hike but declined to provide further details.

Pepsico to set up four new plants in India

Pepsico India chairman Sanjeev Chadha, who took charge as Pepsico India head three years ago, said there would be three greenfield plants on the beverages side

New Delhi: Focusing on India as a rapidly growing market, US soft drinks giant Pepsico would pump in an estimated Rs700 crore to set up four new food and beverages projects by 2012.

Just Days after its high-profile global board meeting that was hosted for the first time in the country earlier this month, Pepsico India chairman Sanjeev Chadha said “going forward, over the next three years, certainly we will be putting up new plants.”

Chadha, who took charge as Pepsico India head three years ago, said there would be three greenfield plants on the beverages side. “On the food side, at least there would be one more plant,” he said, but did not specify the quantum of investment involved.

He said on an average it costs around $30 million to set up a beverages plant and around $50-60 million a food plant.

Going by these estimates, Pepsico, whose global operations are headed by India-born Indra Nooyi, may have to shell out around $150 million (Rs700 crore)to set up these plants. The sites for the plants are yet to be finalized.

“We are in the process of searching and identifying, through a network analysis, as to where the location of these plants would be,” he added.

Since its entry in India 19 years ago, the company has invested over $1 billion in the country. This includes $600 million that is being invested.

Chadha said Pepsico is in the process of pumping in around $200 million this year itself.

Currently, Pepsico has 43 soft drinks plants in India, out of which 28 are company owned. It has three plants for the snacks business.

The new plants will be in addition to the expansion that will take place at the existing plants.

Chadha said Pepsico’s global board expects the company here to continue with robust growth, which has been tripling every five years.

“We have always talked about tripling our business in five years time and we are consistent about it. If you take any five years, we will be tripling that business in that five years time,” he added

“We will be definitely tripling our business (in value) over 2007 to 2012,” Chadha said.

Gillette India halves price of Mach 3 razors with new variant

The Rs 588-crore Gillette India Ltd (GIL) is shedding its premium image with a more than 50 per cent reduction in the price of its Mach 3 razors through a new variant under its franchise.

It has introduced a new Mach 3 razor at a price point of Rs 125 while its premium Mach 3 Turbo razors would continue to sell at Rs 315.

Ms Sonali Dhawan, Director, P&G, Beauty and Grooming, said, “We wanted to make the Mach 3 brand more affordable and in the past have also dropped the price of the single-blade cartridges under the Mach 3 franchise.”

However, the price of single-blade cartridges was dropped 15 per cent (from Rs 95 to Rs 80) compared with the high-end razors where a new brand under Mach 3 would be sold without the ‘turbo’ rubberised effect at almost half the price of the Mach 3 Turbo razor.

The Rs 1,750-crore blades and razors category is currently dominated by Gillette at the top-end of the market, while family-owned Indian companies such as the House of Malhotra and Vidyut comprise the mass-end of the market.

Gillette India is now trying to capture the mass-end of the category and would also be focussing aggressively on the rural market in the future.

“We already have a number of brands such as Vector and Wilkinson Sword at the lower end of the market which compete with the Indian companies. These brands are also present in the rural market but going forward, we plan to have a significant presence in rural India,” she added.

With affordability being the key to reach out to the belly of the market, Gillette is now playing the price card to garner more consumers.

As Ms Dhawan says, “Today, we may have the lion’s share of the market, but we still want more people to reach us; for that the product has to become more affordable. Indian men are more aware of how they look today and we believe that women can influence men as most of them prefer clean shaving men.”

Star channels to air only Hind Unilever ads on Thursday

India’s largest consumer products company, Hindustan Unilever Ltd, or HUL, will launch a day-long advertising campaign worth up to Rs10 crore, and spanning 1,800 minutes across 10 channels on the Star Network on 17 September, said an executive at the channel as well as an official at a media buying firm.

Publicity blitz: HUL products in a store. The firm will repeat the day-long campaign on Zee channels on 24 September. Prashanth Vishwanathan / Bloomberg

The campaign will block all other advertising on the channel, an exercise that will be repeated on 24 September on the Zee Network. The Zee campaign, whose duration could not be immediately confirmed, will cost Rs8-9 crore, said an official at the channel on condition of anonymity.

The ad campaigns for Star India channels will run on Star Plus, Star One, Star Gold, Star Utsav, Star Movies, Star World, Channel V, Star Jalsha, Star Pravah and Star Vijay.

The campaign will promote HUL products such as Lifebuoy, Dove and Ponds, among others. “Advertising for Lifebuoy is likely to take up a chunk of this time, approximately 60%,” said Kevin Vaz, executive vice-president (sales and marketing), Star India.

This is the second time Star India has offered up its network to a single advertiser; the first time was when brand Hutch became Vodafone.

“We are pleased to be a part of an idea that will exclusively reach us to more than 100 million viewers in India at the same time throughout the day. It is innovative and is expected to bring stronger engagement with consumers,” said Srikanth Srinivasamadhavan, general manager (media services), HUL.

HUL will repeat the exercise on the Zee Network, according to media buying houses which received a letter from the channel, expressing its inability to accept any other advertisements on that day. “This will be done from morning 6am to 12 midnight, we will only be running ads for HUL brands across all 25 channels on the Zee network,” said Joy Chakraborthy, chief revenue officer, Zee Entertainment Enterprises Ltd.

SWAIN FLU SE RAKSHA KARTA HAI LIFEBOY - HUL

The aggressive promotion by Hindustan Unilever Ltd of its Lifebuoy product range as a shield against swine flu may be paying off as sales improve, but it’s drawing flak from some critics who say the ad campaign is misleading and an attempt to cash in on public fear of the potentially fatal infection.

Hindustan Unilever, or HUL, India’s largest consumer goods company by sales, is plugging Lifebuoy soaps and hand washes in newspaper advertisements as products “proven to protect from H1N1 type virus”. “Wash away swine flu germs,” goes the tag line on advertisements running across media platforms, including television and print.

The flu, transmitted by inhaling infected droplets expelled by coughing or sneezing or by contact with contaminated hands or objects, has claimed 508 lives in India, where at least 14,500 have tested positive for the H1N1 virus that causes the disease, PTI reported on Wednesday.

“To prevent spread, people should cover their mouth and nose when coughing or sneezing, stay home when they are unwell, clean their hands regularly, and avoid crowded areas,” says the World Health Organization on its website.

Lifebuoy sales seem to have won a lift as consumers take precautions to guard against the risk of swine flu, which claimed its first life in India in August when a Pune teenager died after being infected. “The ads are all over the media and it has definitely created an impact,” said a Gurgaon-based HUL distributor who didn’t want to be named. “The sales of Lifebuoy have gone up by at least 30-40% in the last four months.”

Plugging in: The Lifebuoy website has a section devoted to swine flu.

But HUL’s campaign hasn’t gone down well with some experts and consumer forums. “Washing hands with soap and water definitely reduces the chances of getting the flu, but promoting one brand as the solution is not fair,” said Dharam Prakash, secretary general, Indian Medical Association, which used to endorse Lifebuoy once. “These are all promotional strategies. Yes, we used to endorse Lifebuoy almost a decade ago, but not now,” he said.

Launched in 1894, Lifebuoy has been plugged in advertisements over the years as a product that stands for good health and hygiene. The websitewww.lifebuoy.com has a section devoted to swine flu.

“Playing on fear and psychology of consumers is an old trick used by marketeers to sell their product in time of crisis or emergency situation, and I think it is very unethical to do so,” said N. Bhaskara Rao, chairman, Centre for Media Studies, a New Delhi-based multidisciplinary research organization. “I strongly believe that until and unless a company has the Indian Medical Association or a related industry body to support the claim based on research, it should not be an advertisement.”

According to HUL, the campaign reinforces the “core proposition” of Lifebuoy as a shield against germs. “Lifebuoy has been successfully tested in an internationally recognized lab on effectiveness in protecting against influenza type A H1N1 (swine flu) virus and that is the basis of the claim made by us,” a spokesperson for HUL said. The spokesperson declined to disclose how much money HUL had spent on the campaign, saying the company doesn’t report advertising spending on individual brands.

Nitin Paranjpe, HUL’s chief executive officer and managing director, spoke at the India Economic Summit on Tuesday about the “keep your hands clean” campaign. Paranjpe said the campaign was part of the company’s concept of “doing well while doing good”. “So we want to do good to society, but we want to do in a manner that will also be good for our business,” he said.

Future Brands managing director and chief executive Santosh Desai says swine flu has immediate currency, so it’s understandable—and effective— when brands communicate the message that consumers should wash their hands to guard against the virus.

“But when brands exaggerate a claim by representing the brand as the only solution to the problem, which in this case is swine flu, then the ad becomes dodgy and consumers need to be protected from such messages,” he said.

To be sure, HUL has its supporters, including the Advertising Standards Council of India, which is for encouraging any ad spreading health awareness.

BRITANNIA LAUNCHES A HEALTH DRINK

We are looking at categories where we can make a difference’

Vinita Bali, MD, Britannia Industries, on product innovation, cost-cutting and brand management..

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There’s a time in the evolution of categories when consumers make the switch from having to make it at home to going out and buying it.

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Bijoy Ghosh

Vinita Bali, Managing Director, Britannia Industries Ltd, at the launch of health drink Actimind

Vinay Kamath

Vinita Bali, Britannia Industries Ltd’s Managing Director, is on a whirlwind trip to Chennai. She’s in the city to participate in the Foodpro as well as launch Britannia’s new milk drink for children, ActiMind. Bali is gung-ho on the growth of the dairy business and says Actimind is the first in a pipeline of products planned in dairy. Post launch, Bali, a former worldwide marketing director of the Coca-Cola Co, who joined Britannia a little over four years ago, spoke to Brand Line on a variety of issues: the company’s strategy for biscuits to maintain its one-third share of the organised biscuits market, consumer trends and insights driving the company, spiralling commodity prices and its small pack strategy. Excerpts:

ODONIL IN NEW RANGE

Dabur India has relaunched its air freshener range of Odonil Blocks. The product is now available in improved fragrances of Orchid Dew, Mystic Rose, Lavender Meadows and Jasmine Mist. It is priced at Rs 20, Rs 27 and Rs 33 for the 50 gm, 75 gm and 10 0 gm packs respectively. It can be used in bathrooms and cupboards.

"WIPRO" NOW IN INDIAN FMCG SECTOR"

Wipro Consumer buys Yardley for Rs 214 cr

Wipro Consumer Care and Lighting (the FMCG arm of the company) announced today that it has acquired the Yardley businesses for Asia, Australasia and the North and West African markets for close to Rs 214 crore from the UK-based Lornamead Group, which currently owns the brand.

The Group has, however, retained its Yardley businesses in Europe and the Americas.

The Yardley deal, to be fully funded through internal accruals, is on a run rate business of $24 million (Rs 113 crore) for this fiscal and the transaction is expected to be completed by mid-December, said Mr Vineet Agrawal, President, Wipro Consumer Care and Lighting.

The 239-year-old English brand, famous for its signature fragrances English Lavender, Lily of the Valley and English Rose, has products across various categories such as talcum powders, perfumes and soaps. Wipro plans to add deodorants, body washes, shaving creams and after-shaves to the range.

The brand has had a strong presence in the West Asian markets, with almost 70 per cent of Lornamead’s revenues coming from the region.

With this acquisition, Wipro Consumer Care would see its revenues from the West Asian countries double at around Rs 141 crore from the current Rs 70 crore, said Mr Dipak Kumar Bohra, General Manager, Finance, Wipro Ltd.

Brand Yardley in India

“Though Yardley’s presence in India is still small (about 20 per cent of its Asian revenues), we want to expand it dramatically,” said Mr Agrawal.

The transaction, he said, would add a strong brand to its current portfolio of brands comprising Santoor, Chandrika, Glucovita, Unza and Northwest. The company acquired Singapore-based Unza for Rs 1,010 crore in July 2007.

The company hopes to take Yardley to at least 50,000 outlets soon. Yardley would now be Wipro’s most premium brand on retail shelves.

Asian Paints makes it double

Asian Paints September 2009 Results For the Quarter ended September 30, 2009 Consolidated Net Sales and Operating Income has risen by 16.8% to Rs. 1,723.9 crores from Rs. 1,475.9 crores. Consolidated Net Profit has increased by 104.1% to Rs. 268.4 crores from Rs. 131.5 crores. Standalone Net Sales has increased by 18.6% to Rs. 1,386.5 crores from Rs. 1,168.9 crores. Standalone Net Pofit has increased by 109% to Rs. 254.3 crores from Rs. 121.7 crores. For the Half Year ended September 30, 2009 Consolidated Net Sales and Operating Income hased increased by 17.1% to Rs. 3,184.2 crores from Rs. 2,718.6 crores. Consolidated Net Profit after Minority Interest has increased by 87% to Rs. 444.5 crores from Rs. 237.7 crores . Standalone Net Sales increased by 17.8% to Rs. 2,551.3 crores from Rs. 2,164.9 crores. Standalone Net Pofit has increased by 90.6% to Rs. 418.8 crores from Rs. 219.7 crores. The Board of Directors recommended the payment of an interim dividend of Rs. 8.50 per share (85%). The company distributed an interim dividend of 65% for H1-FY2009. Total Dividend of 175% was distributed in FY2009. The dividend payout ratio was 54.19% in FY2009.

ITC GAINED AN INCREASE IN NET PROFIT BY 26% IN LAST QUARTER

ITC delivered yet another quarter of strong performance with Post tax profits growing by 26% despite a challenging business environment. With the exception of the hotels segment, which is reeling under the impact of the global economic slowdown, all businesses posted strong bottom line growth. Cigarettes, FMCG Others, Agri and Paper & Packaging businesses grew handsomely in net revenues by 21%, 14%, 19% and 13% respectively.

Profitability improved on the back of better product mix, smarter sourcing of inputs and a series of targeted cost management actions. Investments in brand building in the Personal Care and Branded Foods businesses continue to impact the segment results of ‘FMCG-Others’.

Pre-tax profits and post tax profits at Rs 1492 crores and Rs 1010 crores respectively grew by 26% over the same period last year. Earnings Per Share for the quarter stood at Rs.2.67.

DABUR GAINED AN INCREASED IN PROFIT BY 30.7%

Dabur India Q2 Net Profit Surges 30.7% To Rs 140.34 Crores

Monday, October 26, 2009

Consolidated Q2 Revenue Up 22.4% to Rs 855.06 Crores EBIDTA Grows at 33.7% Consolidated Q2 Revenue Up 22.4% to Rs 855.06 Crores EBIDTA Grows at 33.7% Dabur India Ltd continued to move ahead on the growth trajectory in the second quarter of the 2009-10 financial year, reporting its strongest-ever growth in 18 quarters. Riding on strong volume-driven growth across its key categories, Dabur ended the second quarter of 2009-10 with a 22.4% jump in Revenue at Rs 855.06 Crores as against Rs 698.45 Crores a year earlier. The company also reported a 30.7% surge in consolidated Net Profit during the quarter at Rs 140.34 Crores, up from Rs 107.41 Crores a year ago. EBIDTA margin also reported an improvement of 183 basis points to 21.8% for the second quarter of 2009-10.