NEW DELHI: Hindustan Unilever Limited (HUL) has decided to separate the Ice Cream business as the board of the FMCG major feels that this segment requires separate attention.
“Ice Cream, which contributes 3 per cent to HUL’s turnover, is a high-growth category that needs significant investments to realise its full potential. Given Unilever owns the trademarks and know-how and has announced the separation of its Ice Cream business, local capabilities will need to be developed to continue running the Business,” HUL said in a regulatory filing.
The makers of Kwality Wall's ice creams added that this vertical has a different operating model including cold chain infrastructure, and a distinct channel landscape, which limits synergies with the rest of HUL.
As of 2023, India’s ice cream market was valued at approximately USD 3.4 billion. A report said that the market is projected to grow at a compound annual growth rate (CAGR) of 12-15 per cent over the next few years, reaching over USD 6 billion by 2027.
Amul is the largest player in India’s ice cream industry. Besides Kwality Wall’s, other prominent players are Vadilal, Mother Dairy and Havmor.
HUL also feels that this portfolio restructuring will enable them to sharpen focus on the core business and strengthen its play in trending demand spaces such as Beauty, Foods, Health and Wellbeing.
HUL on Wednesday also reported that its consolidated net profit declined 2.4 per cent to Rs 2,591 crore in Q2FY25 from Rs 2,668 crore in the same quarter a year ago. The FMCG giant's second-quarter consolidated revenue grew by 2.1 per cent year-on-year to Rs 16,145 crore.
Rohit Jawa, CEO and Managing Director of HUL said that FMCG demand witnessed moderating growth in Urban markets while Rural continued to recover gradually.
“We remain watchful of a gradual recovery in consumer demand while creating a sustained competitive advantage through our business fundamentals: investing behind our aspirational brands, scaling market-making innovations and maintaining operational rigour,” added Jawa.
Not only HUL, but other big FMCG players also reported slow growth in PAT and revenue during the quarter that ended September FY25 due to commodity inflation in certain segments and muted demand.