Eyeing growth, HUL to separate foods and refreshments business

FMCG giant Hindustan Unilever (HUL) has decided to separate its two high growing foods & beverages (F&B) segments, aligning with the global structure adopted by its parent Unilever. The food business of HUL comprises of Knorr soup, Kissan jams and ketchup, Annapurna atta and salt, while its refreshment brands include Bru coffee, Lipton tea, Kwality Walls ice-creams. [caption id=“attachment_2309910” align=“alignleft” width=“380”]  Reuters[/caption] The revenue from beverages segment grew 7 percent in the year ended March at Rs 3,887.68 crore, driven by double digit growth from Lipton ice tea and Bru coffee, while the packaged foods segment registered a growth of 12 percent at Rs 2,117 crore, recording its tenth straight double-digit quarterly growth, the Economic Times report said. In August 2014, the maker of Dove soaps, Rin detergents and Knorr soup separated its home and personal care portfolio into two segments with new executive directors for each, replacing Hemant Bakshi, who moved to Indonesia in a new role, Mint report said. “The foods segment is the biggest opportunity for the future but the weakest performer in HUL’s portfolio,” Mint quoted from a 10 May report of analysts Sanjay Manyal and Parth Joshi of ICICI Securities. The report further said the foods portfolio posted healthy revenue growth of 18.6 percent annually between fiscal 2011 and 2016 but remained a drag on the earnings front. The company also announced appointment of Sudhir Sitapati as executive director, Refreshments. HUL’s segment-wise margins remained subdued over the years, with brands like Kissan, Knorr and Kwality Walls foods contributing 6.6 percent to overall revenue and 2.2 percent to operating profit in fiscal 2016, Mint said. “The Foods and Refreshments (F&R) business will now be organised into two separate businesses of Foods and Refreshments. Sudhir Sitapati currently Regional Category Vice President, Refreshments (South Asia & Africa), Unilever, will be inducted into the management committee of HUL as Executive Director, Refreshments,” HUL said in a NSE filing. It further said: “Geetu Verma, currently executive director (Foods & Refreshments) will continue to look after the Foods business. She will be designated as Executive Director (Foods) and will continue as a member of the management committee of HUL.” The company said this change is in alignment with the category structure of Unilever globally. “Both the businesses have registered strong growth under Geetu’s able leadership and have now reached significant scale. The reorganisation into two separate businesses will enable sharper focus and help to fully leverage the growth opportunities in line with HUL’s ambitions,” it added. With agency inputs