Unilever’s India blueprint starts at the ₹1 sachet

Unilever's India strategy focuses on the country as the key to emerging-market growth, highlighting the nation's vast population, rising incomes and evolving consumption habits. The company is confident India offers the most substantial expansion potential for fast-moving consumer goods (FMCG) over the next five years, said Unilever's chief executive Fernando Fernandez at the Barclays Global Consumer Staples Conference.

India accounts for 62% of Unilever's group revenue, and the company is allocating its entire $1.5 billion to $2 billion annual acquisition budget to premium brands in the US and India that can be exported globally. Unilever's India market is driven by strong long-term consumption factors, such as population growth, urbanization, rising wealth and increased female workforce participation.

Fernandez sees premiumisation potential in the Indian market, particularly in hair care, where the company aims to move consumers from ₹1 sachets to ₹2 sachets. According to Hindustan Unilever managing director Priya Nair, structural changes are transforming the market, including the rise of Generation Z, more women entering the workforce, rapid digitization, better infrastructure and increased access to clean water.

India's per-capita FMCG spending is approximately $63, with 70% of the population residing in rural areas and tier-four locations, 20% in small towns and 10% in cities. These trends present both opportunities and challenges, as inflation is a current concern, with HUL expecting to balance pricing carefully amidst rising input costs.