Good morning. It gives me an immense pleasure to welcome you all to HUL's Capital Market Day. I am Yogesh Mulgaonkar. I head investor relations for HUL and also head for Beauty & Wellbeing. We are delighted to host you today. I would like to extend a warm welcome to all of the virtual participants also in this conference. We hope you had an opportunity to explore our virtual experience zones as well as the physical experience zone and look at our portfolio and innovations. We have a rich agenda for the day. Before we kick off, let me draw your attention to the safety AV. Can we have the safety AV, please?
[Presentation]
Now let me take a few minutes to walk you through the agenda. We will start the day with Ms. Priya Nair, our CEO and Managing Director of HUL, unveiling our strategy to win. We will then move to our segmental presentations by our business heads, who will bring the strategy to life through their respective portfolios. After this, our CFO, Mr. Niranjan Gupta, will cover the value creation section as part of the strategy. After value creation, we will break for an hour for lunch. Lunch break will be followed by breakout sessions where we will walk you through our capabilities. This session is only available for in-person participants. I will share instructions on this later. We'll end the day with Q&A and high tea.
Before I start with the presentation, I would like to draw your attention to the safe harbor statement included in the presentation with good order's sake. With this, it's my absolute pleasure to invite our CEO and Managing Director, Priya, on stage to begin the session.
Thanks. Good morning, everyone. Morning. I am absolutely delighted to have you and invite you and have you for the whole day and welcome you to the HUL 2026 Capital Markets Day. But I am especially delighted because this is my first Capital Markets Day as the CEO and MD of HUL. Before I begin, I thought it is important for me to introduce myself. I know many of you, but I am sure through the day I will have the opportunity to interact with many of you. For those of you who do not know me, I am a Unilifer, as we are called. I have spent over three decades with HUL and Unilever. Prior to going into Unilever, I was on the executive committee of HUL. I first ran the Home Care business and then the beauty and personal care business on the executive.
I then moved to Unilever, first as a CMO of the Global Beauty & Wellbeing organization in Unilever, and then joined the Unilever executive as the Beauty & Wellbeing President globally. That is really what I did before I came back to HUL about a year ago. Delighted to be back home in HUL and in India. That is really a bit of an introduction of me, and I really would like to have the chance to get to know many of you and for us to talk over the day. Let us begin with looking at HUL at a glance. Always good to ground ourselves in some facts. We are one of the largest and most loved companies in the country across sectors. Our turnover stands at INR 63,763 crores.
What we are really delighted is we have 21 brands above INR 1,000 crores, and the statistic that we will never tire of telling you is that nine out of 10 consumers in India use one or more HUL brands. We have over 90% number one position in the market, and we sell 85 billion packs in a year. You know, guys, all of you, lots of math in the room, 1.4 billion people, 85 billion packs, so you can do the math. And we do this through reaching 9 million outlets. That is really the statistics. But the statistic that we are most proud of is that we continue to be the number one employer of choice, and the talent of HUL is indeed the bedrock on which HUL stands. That is just some statistics about the company.
Four powerhouse segments, Home Care at INR 23,600 crores, Beauty & Wellbeing around INR 15,000 crores, Personal Care at INR 9,560 crores, and a INR 14,000 crore Foods business. That is really the composition of our turnover. With a robust profit and cash profile, 23.6% EBITDA margin, 110% return on capital employed, INR 11,000 crores of operating cash flow, and about INR 49,000 crores of reserves. That is really what you must think about when you think of HUL, and best-in-class supply chain costs. Why is this? Because of the scale and efficiency at which we operate, we have best-in-class supply chain costs. Over a decade, HUL has delivered value creation. If you look between 2014 and 2024, we grew our turnover 2x, our EBITDA 3x, and our operating cash flow 4x. That is really the numbers on which we grow.
Growth has been muted in the last two years, and this is especially amidst a very challenging operating environment. What I want to share with you is the actions that we have taken to decisively reset our growth. I think the most important action that I would share with you is the first, which is elevating the desirability of our brands. For us, our brands are absolutely the most important thing in HUL, and through the day today, we will share with you between me and the business heads, the work underneath the hood that we are doing to raise systematically the desirability of our brands. The second is allocating resources more sharply to fewer, bigger bets. That's something again, we are going to dive into through the day today. The third thing I want to talk about is acceleration of key growth pockets.
You are going to hear much more about what's underneath the hood of this geographies, channels, and portfolio through the day today. The next area is in terms of executional step up, both in terms of how we deploy in marketing, but also at the point of sale, and Nir will be sharing with you how we are building a future-fit GTM. The last is a rewired organization, more simple, more agile. So that's really the key steps that we have taken to step up our growth, and this indeed is what's resulting in the step up of growth that you have seen. But possibly the most important thing for us is that we have strengthened our competitiveness.
This is really the signal that we have, that the step up that we are doing on the desirability of our brands or in execution indeed is resulting in this performance step up. I think with this, let me shift to talking about the opportunity of new India, and I say new India very purposefully, and we are going to talk to you about this idea and this emergence of a new India opportunity. When you look at the India consumption story, listen, all of us in the room, all of you who follow consumer goods, we are the fastest growing large economy in the world. Our under indexed CPG spends, the CPG spends per capita at $63 are extremely under indexed versus our neighboring peers, but possibly the most important signal is what's on the right.
When the distribution of household income starts to change, it changes how you consume in consumer products. So that's probably the biggest and most important shift that is taking place in India, is a change in income in the hands of consumers. India offers a very rare combination of scale, 1.4 billion consumers and per capita growth when you look at it relative to other countries in the world. It is this very strong combination, which is why we have a huge opportunity in consumer products. There are five structural shifts that are taking place to create a new India. I think it's very important for us to reflect on what these structural shifts are. The first, and by no means the most important, but it is very important, is 377 million Gen Z consumers of India. These consumers are absolutely changing India.
We see it every day. In the last one year, I have spent a lot of time going into the market and meeting consumers as I have come back. I see the change that they are starting to create in the way our categories are consumed, how they discover our categories, how they buy our categories. They will change CPG consumption. The second is women in charge. The women workforce participation has changed in India from 25% to 43%. This change is mostly in rural, but also in urban. What happens when a woman goes to work? You can just imagine, and for all the women in the room, but everybody in your homes who are working women, everything changes. It is how she cooks changes, how she does the chores in the home changes, but also how she shows up.
Whether you are in rural India and you go out to work and you have financial independence, or whether you are in urban India and go out to work, it changes the way women consume our categories. The third thing is data penetration. Data penetration in India has changed the transparency and the opportunity to know 50% of the global payments in India go through India. 50% of the world's global payments go through India. The other shift is the change that has taken place in road infrastructure. The government has made significant investment to change road infrastructure, and this is changing, again, consumption. We did a study. Let me share a statistic with you. We did a study of what changes when physical access changes. So when you change the access of a village or a small town to a neighboring urban center, it changes our growth by 30%.
So we have 30% incremental growth every time a road infrastructure starts to change. The villages of India are changing. Why are the villages changing? More tap water, more LPG, and of course, the road infrastructure changes access. So these are the structural changes that are taking place in India, which are creating this new India, which is starting to be born. In this new India, growth lies in segments and sub-segments, and this is very important. I am going to talk a lot about this. Growth is emerging in newer geographies. Small towns are growing two times faster than all India. Newer channels are emerging. We all know Q-commerce. Newer consumer spaces are emerging. I have taken the example of health and wellbeing, we could have other examples. All of this is fueled by newer media platforms, which are changing the way consumers discover brands.
In this context, I want to share with you how we think of the growth metric of India and the growth matrix of India. The first axis, when you think about how consumers change consumption, of course, it is income. So when you look at India across income strata, democratizers about 35% of India, they have the household per income of about Africa. So 35% of India, democratizers. Premiumizers are about 65% of India. They have the household income of Indonesia today. 5% of India are at the income of France. So you can imagine how this changes how consumers consume. When income is in their hands, it changes a household's consumption, it changes the brands they buy. So this is the first segmentation variable that is changing the way consumers buy in India. The second variable that is changing consumption in India is where they live.
And you can imagine that the physical access and infrastructure in where you live makes a difference to how you buy. 70% of India lives in Tier 4 and rural India. I want to say that number again. 70% of India lives in Tier 4 and rural India, 20% of India lives in small towns, and 10% of India lives in the large cities. Everyone's got the numbers? Yeah. Now think about the other thing that is changing in the country, and that is where you shop. Where you shop is starting to change. Whether it is online, quick commerce, e-commerce, modern trade, large general trade, and Nir will talk to you later about specialist general trade stores that are emerging or indeed small general trade.
That is really the three segmentation variables that are starting to change the opportunities of how India consumes CPG. This is the 24-cell grid, is the way we think about growth for HUL as the largest CPG manufacturer in the country. I am going to take an example now of the haircare market and explain some data points to you. If you think about the haircare market and you look at the growth in haircare, the delta growth in haircare, if the urban affluent contribute to X delta in haircare, the rural value seekers contribute to 2x. It is just math, right guys? Where they live, the consumption opportunity, that is how delta comes. If urban contributes to X delta, rural contributes. These are the facts. This is past historical data. I am giving you market historical data. This is how markets grow.
Now when you think about why does this happen, and let us spend some time around haircare. I am just using haircare as an example. I could have chosen any example. In rural, haircare grows through two vectors. The first is consumption and the second is premiumization. What is the change that is taking place on consumption? The first is as consumers become richer, as they have more access to tap water in rural, they start to change the number of times they wash their hair. Makes sense, right? The more money that you have in your hands, you have access to running water in your home. India's wash frequency is under three days a week. You start to change the number of times that you actually wash your hair. This is of course fueled by all the aspiration that is taking place across the market.
Of course, the markets also premiumize, and in rural as well, you will have a huge opportunity for premiumization. If you look at the large cities, haircare will grow through increased penetration. What happens in a market like haircare? In a market like haircare, and this is something you can study for haircare markets around the world, markets in haircare moves from cleansing, so just shampoo, cleansing your hair, to care. It moves from just a hair cleansing market to a haircare market. What does that mean? From just using a shampoo, you start to add products to your haircare regime. You add a conditioner, you add a mask, you start to add styling products, treatment products, and that is how the haircare market evolves. This happens because consumers start to change the way they look after their hair.
More hair straighteners are entering the home in India. From X in the past period, it has gone to 1.6x. Social media is fueling this change. You with me so far? If you think about it, there are four strategies that we have or four opportunities to unlock growth. Very simple, for the democratizers in India, the most critical variable of growth is consumption increase. I am going to show you data which will say that in India, the consumption-led growth is far from over. The first variable of growth is in haircare, just changing the wash occasions means they use more shampoo. I am giving you an example to bring it alive. There is a consumption-led growth taking place amongst democratizers in the country.
The second is in, of course, in terms of premiumization, which is as consumers seek more benefits, we premiumize the consumers and they premiumize in terms of price per mil. That is the second vector of growth. If you think about small towns, rural, predominantly the middle consumer, the 60% consumer that I talked to you about, the premiumizers, they will grow through premiumization. The dominant growth, and this is not to say, guys, these are neat sets, right? They are not neat. It is where the dominant growth will come from. In large towns, in modern trade and GT, growth comes through new usage, which is more users through market making, and that is how growth comes. You start adding from a shampoo, you start adding masks, conditioners. When you think about online in large cities, growth comes through completely new formats, through masstige and prestige predominantly.
That is really the four growth spaces that will emerge for India across time. If you think about the HUL portfolio in that context, in haircare, it is absolutely clear. There is no portfolio that is better placed for all four sources of growth than HUL because we have a lion's share of the market in sachets. That is the consumption-led growth. As consumption-led growth happens, Clinic Plus and Sunsilk are best placed to benefit from that increased hair wash frequency that is taking place in the country. As consumers upgrade, they move to Dove. Dove is the largest premium shampoo in the country. You will hear Harman talking much more about this. Then they start to ask, and we are market making in hair, in conditioners, in masks. Online, of course, we are focusing on masstige and different new brands that we are entering with.
That is really how you should think about the HUL opportunity. What I want to land with you is it does not exist for HUL in just one pocket. Given our size, our growth pockets exist across this map, and that is the way we think about our growth. Our resource allocation follows this. If you think about it, Clinic Plus focus will be on democratizers, especially in rural India, and that is the focus for Clinic Plus. If you think about Dove's focus will be on the premiumizers across the country, especially in small towns and Tier 4 and rural. If you think about Nexxus, the entire focus of Nexxus is online. It starts to give you a sense of the growth pockets of resource allocation for HUL across this map. Let me show you a video that brings this alive. Can I have the video, please?
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Thank you. With that, let's move to what's HUL's strategy to win. Our strategy, as we are calling it, is winning in new India. Our focus will be to deliver competitive volume-led growth. That's what we've always said. We're going to show you underneath the hood how we're going to do this today. Let's start with the four spaces that I called out. Consumption, and I'll show you the facts on consumption-led growth and the opportunity that we have, premiumization, market making, and new spaces. We'll talk a little bit about all four in some detail. Underneath this, what I want to show you is how we see our growth algorithm. We see 40% of our delta coming out of consumption and premiumization. 40% of our delta coming out of market making and 20% of our delta coming out of new spaces.
That's how we see our growth algorithm. Three key enablers, and I will talk you through it in a lot of detail, crafting SASSY, desirable brands, creating a future fit GTM where we deepen the distribution moat that we have, and using AI as a moat. You're going to see all three of this in the afternoon today and what's underneath the hood. Our value creation model is generating the fuel for growth. We will talk about how we deploy the fuel for growth, the step-up we will do for capital for growth, and delivering volume-led competitive profit growth. All of this is something Niranjan will share with you later on. Of course, underpinned, and this is very important, by talent, culture, the winning culture, and ESG.
That's really how you need to think about it, and we're going to spend much of the day going underneath the hood of this chart. Let me start by talking about consumption, which is the first bucket of growth as I talked to you about. Let's start with dishwash. This is an example. I showed you haircare. I'm going to now show you an example from dishwash. If you look at dishwash, the way dishwash is changing is linked to, A, tap water access in rural. Second, LPG change. A lot of you who do not understand would ask me, what has LPG got to do with dishwash? The change in LPG is the change from wood fire cooking to LPG cooking. When that happens, the way consumers have control on the fire changes. It changes the way cooking stains happen.
It changes, therefore, what we are cleaning, because imagine how you cook over a wood fire versus LPG. It has a dramatic change in what consumers are seeking. It also changes the other proxy product that is used in the country, is ash. As that starts to change, because it's not available anymore, people move to branded goods. That's the change taking place. Even today, the per capita consumption of dishwash, Thailand versus India, Thailand is at 3.5x the dishwash consumption versus India. Why does this happen? As people get richer, you change the way you eat. You have different cooking vessels, different vessels in which you serve, different vessels in which you eat. When you are more affluent, think of how you eat. Think of how a consumer who is less affluent eats.
Just the sheer number of dishes starts to change. The variety of dishes also starts to change. All of you, I'm sure, own coffee mugs and you own fancy utensils. Again, it starts to change. What you're cleaning starts to change, and therefore, what we are trying to clean starts to change the number of vessels, and that's the consumption-led growth that starts to happen as people become more affluent in India. Let me show you some numbers on why we are best placed to get a lion's share of this consumption increase. Vim is the number one brand power in dishwash, 4x the RMS of our relative competitor, and we have 90% valuated distribution. As we get and fuel this consumption-led increase, we are best placed to get a lion's share of this consumption-led increase.
This is not the case just in one category, and this is probably the most important thing that I would like to share with you. This is across our categories. If you look within India, I showed you the boxes of the value seekers and the affluent on the right side. Remember in the 24-cell grid? The value seekers in India, if they use X in laundry, the affluent use 1.2x. In soaps, if they use X in the category, the affluent use 1.3x. In tea, if you use X in the category, they use 1.5x. In shampoo, if they use X in the category, the value seeker, they use 1.7x. If you look at now premiumization and you look at the data on how premiumization is taking place, it is quite simple, right?
India stands at that incredible inflection where the premiumizers that we talked about are now at the household income of INR 3,500- INR 4,000. At that moment, we have seen in many markets, premiumization starts to inflect. You compare it with other markets in the world, the 60% of our population that we talked about stand absolutely in the right position. Our portfolio is structurally advantaged in premium. We have 1.3x the relative market share to our mass business, so 1.3x market share in premium as compared to mass. We really have the structural tailwind. As the market premiumizes, HUL will grow market share. Very simply, if we stand still, we grow market share. Most importantly, it is our brands. We have the premium brands that consumers love and desire across categories.
Whether it is Dove, Surf Excel, Horlicks, Vaseline, Vim, Red Label, these are all the number one brands in their category amongst the premium brands of the category. That is really the most important data point, is that we own the number one brands of the category and equity leaders of the category. We are investing disproportionately behind these brands, two times more investment versus the average. 60% of our spends on these brands are on digital, and we are investing, and Nir will show to you later, behind building specialist channels where many of these brands sell. Let me give you one data point on Dove, just using Dove as an example. Dove is Unilever's largest global brand. In India, it has had huge. It is our fastest growing premium brand. I will give you one data point. Dove used to be number nine in terms of brand rank for HUL.
Today, Dove is already the number 5 brand rank for HUL. Dove will become the number 2 brand rank for HUL. That is really how we are building Dove up. Why is it happening? It is happening because not only are we making Dove more desirable, but we are extending Dove across categories. This was Dove in 2022. This is Dove today. I hope you see the difference, and the difference is obvious, both in the step up of desirability, but also in how we are extending across categories. Dove, which was just a soap and a shampoo, is today in body washes, it is in hair treatments, and our latest launch is the tube you see, which is Dove entering skincare in body lotions. That is really how we are extending the Dove brand, and it will become HUL's number two brand. Let us now go to market making.
Market making has always been the bedrock of HUL. As the market leader, this continues to be a large opportunity for us, and I have just given you some numbers on quarterly category penetration. This is not our penetration. This is category penetration quarterly and everyday use items, what the quarterly category penetration is. Hair masks, under 1%, sun care, 2%, body wash, 2%, dishwash liquid, 7%, laundry liquids, 13%, face cleansing, 17%. I just want you to look at the numbers below, which is Indonesia and the relative index of India to Indonesia. So for each category, Indonesia has 64x more hair masks compared to India. So that is the size of the penetration. This is penetration index. That is what the data point is. So 64x more penetration than India. Sun care is 17x, body wash, 16x, dishwash, 7x, laundry liquids, 3x, and face cleansing, 2x.
You just begin to see, and I just told you that 60% of India has the household income of Indonesia. So you can see how the market is absolutely slated to transform. As the market leader, this is the biggest investment we make, and I am just going to start with an example of laundry liquids. Vandana is going to talk to you much more on this subject. If you look at it today liquids is only 7% of the laundry market in India. It is growing 20x CAGR. This has already happened in China, Thailand, many markets in the world. How it takes place is as washing machines change and you start using washing machines, there are many reasons why you adopt liquids versus powders. So that is really what happens in laundry.
HUL has a well-proven playbook of market development, whether it is our understanding of the superiority that we require in products and what we do on R&D, the understanding of consumers, the deep intimacy and understanding of how to educate consumers, what the triggers are for consumption, what the barriers are to adopting these new products, large scale sampling efforts, partnerships with other companies to build these categories, or indeed now, a social first demand generation engine to start educating consumers about these categories. It is underpinned by the investments, of course, that we make multi-year into market making. This is not just a year investment. This is a multi-year investment that we make into market development, and that compounding advantage is what we create for ourselves over time. So this is a repeatable well-proven model, and you will hear the business heads talk about this.
I want to now focus on the three enablers behind our strategy. The most important one for me. Sorry, before I go to the three enablers, let me start talking about the new spaces. I just want to ground us back. What I first talked about is how we will grow with our existing business. So 80% of our delta growth will come out of this existing business. Now I am going to talk to you about the opportunity for HUL in new spaces. When you look at new spaces, CPG is absolutely brimming with new high growth segments, categories, no matter how you look at it. Lots of them which are starting to emerge. As you look at these categories, these are many categories which are adjacency to our categories. We are also present in many of these categories.
What we will now do is we will double down behind few of these categories, enter these high growth select spaces. It does not suggest that we will enter all these spaces, guys. What I am saying to you is there are many opportunities. We will decisively and selectively enter a few of these spaces, of course, based on our right to win, the profit pool, and sustainable long-term growth. So that is how we are going to look at it, and let me take two examples of new spaces that we have entered. The first is masstige skincare. With our acquisition of Minimalist, we are well on our way to build a strong masstige skincare business. Harman is going to talk to you much more about it. Since acquisition over the last two years, it has grown two times, so 2x. So 2x growth in two years.
Let me show you a commercial for Minimalist. The next space I want to talk to you is the most recent entry that we have made. We are very excited with this entry. What we are talking about is our entry into protein. We have extended the Horlicks brand, as we speak practically, into protein, and I hope you get a chance today to try new Horlicks Protein. We have entered both into powders and into ready-to-drink. Raj is going to talk to you much more about this. Why are we excited about our entry into proteins, besides it being a fast-growing segment, is our deep understanding of nutrition science and how we have formulated the protein to be digestible. So it is not just protein, it is protein and fiber, very important to digest the protein. And of course, the trust of Horlicks is a huge reason why we believe we will democratize protein.
Let me show you the advertising, and we will talk a little bit more about it.
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I hope you saw that. Very simply, the idea is to democratize protein. This is not just for gym protein. This is for everyday protein. I am sure many of us feel like our every day is a workout, so indeed, all of us need some of that Horlicks Protein. Do have a chance today to try it, both the powders as well as the ready-to-drink. Let me show you another ad.
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Talking about every day and how your every day is a workout, and therefore you need. Our opportunity is to democratize protein. This is not about, again, I am repeating, this is not about gym protein. This is the need in India, given our diet. Everyone in India requires protein, and we have the science to create digestible protein, and that is really the democratization that Horlicks is doing. Raj is going to talk to you much more about it later. Now, going forward, I want to talk to you about the three enablers that underpin our strategy. The first and the most important for us is crafting desirable brands. This is the bedrock of everything that we have is our brands. We are building and crafting much more desire in our brands. How do we do this? We do this through consumer obsession.
At the heart of everything is the obsession we have for our consumers. We have 26,000 hours of consumer research that HUL does. We have a strong social listening engine that supplements this face-to-face contacts that we do with consumers. We have now, and we will show you some of our work in AI, an AI-enabled forecasting capability. This is the bedrock of everything we do to build desirable brands. I am going to show you some examples of how we are systematically working across our brands to step up the desirability of our brands. Let me start with the first example. That is Vaseline. Everyone knows Vaseline, 155-year-old brand, a body lotion, and a petroleum jelly. That is how it is known in India. That is Vaseline. This is Vaseline now. I am going to do it again. That was Vaseline. This is Vaseline today.
You would agree with me, much more desirable in new formats with Vaseline Gluta-Hya entering face, with Vaseline Cloud Soft entering lips. That is really Vaseline today. Intrinsically social first with the idea that if it is Vaseline, it is verified because consumers trust Vaseline and we have scientific data of the impact of Vaseline. That is really how systematically we are doing this. Underneath that is the structure which we use to step up the desirability of our brands. First, it is the science. We have billions of dollars as Unilever we put into our brands. It is really the science that goes inside our products. It is the aesthetics of step up. When you look at Vaseline Gluta-Hya, the packaging is beautiful. Beautiful sensories.
It is intrinsically said by others, which is what I said to you, if it is Vaseline, it is verified, and verified by consumers, by the way, and it is youthful, intrinsically designed for Gen Z. That is really what we are doing, and it has resulted in double-digit growth for us in FY 2026. It is not just a structure. When we are systematically rolling this out, we are seeing the impact on our brands. I am going to take another example, a local jewel, beautiful brand for us in Foods. Well known by all of you, well known by everyone in India as a tomato ketchup and a jam. That is what Kissan has been, mostly targeted to children, and I hope you have seen the change in Kissan and the rollout of this new beautiful range.
The team has done an excellent job in creating chutneys and what it brings alive in Kissan, and this is the new face of Kissan. Please also look at the new packaging on the tomato ketchup. This is the change with the idea, and Raj is going to talk more to you about it, of this idea of Chatt Kar Jao, and he will show you some communication. Again, underneath the hood of how we do this is exactly the same framework. The science of the products that we build to create tasty chutneys, our food and flavor science, the aesthetics of our packaging, the sensories. You would ask me, what are chutney sensories?
But for all of us who know, there is a silbatta texture of chutneys which gives you that sense of scratch-made chutneys, and that coarse ground chutneys is what consumers are looking for. That is an area of work that the team has done to create that silbatta-like texture. It is a campaign that is intrinsically social. It has been led by chefs and other people online. It is very interesting how chefs are using chutneys. They are not just using Kissan chutneys as a chutney, but they are using it as marinade. There is a lot of very interesting use cases that the community creates, that is resulting in very interesting consumption of chutneys. Of course, intrinsically youthful, a flavor hack for young consumers.
What I wanted to share using these examples is the systematic way in which we are infusing desirability into our brands and lifting our brands, making them more modern, more contemporary, more youthful. All of this is backed by a new social-first demand engine. We reach now 30,000 creators in India. 60% of our spends are now on digital, and we have AI-enabled content studios, and you're going to see some of this work in the breakout in the afternoon. The next area I want to talk to you about is how we are going to deepen our distribution moat, building a future-fit go-to-market. Nir is going to spend time in the afternoon taking you through it in detail, but I will give you a flavor of it.
To win in new India, we believe we have to deepen our moat of how we go to market with not just scale, but also specialization. That's what we're doing. Whether it is the dedicated organization we've created in quick commerce or a new go-to-market that we have for specialist channels or indeed expanding our GT distribution both through physical reach and through Shikhar, also the quality of our reach in rural, we are going through all of these to improve our GTM, and Nir is going to take you through this in the afternoon in much more detail. I wanted to just share with you something around our quick commerce organization that we have shared with you.
We have an AI-enabled availability engine, targeted performance marketing, but mostly we are in strong category-building relationships with our retail partners, where we are helping them drive category penetration in their channels. Whether you think of all the quick commerce players, we're working with them joint partnership to help them drive the category in their channel. That's the work that's going on. The next area that I wanted to share is how we are strengthening our beauty execution engine. This is a big area of growth for us. Harman will talk to you about the work that has happened to increase and improve and transform our beauty portfolio. Nir will talk to you about the end-to-end go-to-market that we now have in place with beauty-first capabilities. You're going to see much more of this in the afternoon. The last enabler for us is AI as a moat.
For us in HUL, this is an area we're working on. Here, the way we are thinking about it is we want to create an AI-empowered workforce of the future. For us, it is not just about the LLMs. The LLMs are now accessible to everyone. It is about the proprietary data sets that we own at the scale of HUL. You're going to hear a lot about how we are going to use those proprietary data sets and really harness those data sets. Really, that's the work that we're on. This is end to end across the organization, but very focused in each pillar with the areas that truly matter and will make an impact on growth. You will hear the team talking about it and how we are unleashing and harnessing the power of the proprietary data sets that we own as HUL.
The last area I want to focus on, and Niranjan will talk you through it in detail, is on our value creation model. Our value creation model has four pillars, and we will talk in detail, and Niranjan will share, which is how we will generate the fuel for growth, our focus on how we will deploy this fuel for growth and invest behind our brands, a step up in our capital for growth, and how we will deliver volume-led profit growth. Niranjan is going to cover this section later on in his section. So that's really what I wanted to share with you to set up the day today. In summary, there is an incredible opportunity that stares at us in India in consumer products. But the way this is emerging is it's the new India opportunity.
To win in new India, what's required in each part of the growth pockets and that 24 cells is different and it is distinct. HUL will leverage the portfolio that we have because we have that scale advantage and the portfolio breadth to win across consumption, premiumization, market making, and entering new spaces. Our value creation model will be to deliver volume-led growth and profit growth. Our execution will be powered by three enablers: crafting desirable brands, a future-fit go-to-market, and AI as a new distinctive competitive moat. Our talent, indeed, as always, remains the bedrock of our success and is the foundation of how we win. So that's really what I wanted to say with you. With that, I think, Yogesh, back to you, to take forward to the next section.
Thank you, Priya, for unveiling our new strategy. We will have a short comfort break for around 10 minutes, and we'll come back here and hear the business heads talk about the category presentations. Again, strictly 10 minutes break. Thank you. Welcome back, everyone. Let's move to the next agenda of the day. In the last session, you heard Priya talk about our strategy, winning in new India. We will now hear from our business heads on their respective segments on how does the strategy come to life. Let me first call upon Home Care, Ms. Vandana Suri, executive director, to start off the first session.
Good morning, everyone. Welcome back. I'm Vandana Suri. I lead the Home Care business. I had the privilege of meeting some of you this morning, but just a brief introduction for many of you who I have not met. I have 24 years of experience, and 15 of which are with HUL and Unilever. Of the 15, I've done three years in Foods, six years in Home Care, and six years in Beauty & Wellbeing. Just prior to this, I was the Beauty & Wellbeing lead and I used to run the business for Indonesia. And come this year in January, I'm back home in India and of course back to Home Care. So with that, let me now move to the Home Care presentation.
I will walk you through in the next 15 minutes both the scale of Home Care, the opportunities that we have for growth, and how will we leverage some of these opportunities as we go ahead. Just start with the numbers. INR 23,672 crores of revenue at 37% contribution to HUL. We are the biggest business that HUL has. It is built on iconic brands. Of course, 19% segment margin. Many of you have been around for very long. In the last decade, we have grown this business significantly. We have, in fact, more than doubled this business at very, very strong CAGRs. If I reflect back on what has really led to this kind of growth, there are two fundamental reasons. I think the first one is the biggest enabler for us is our deep consumer intimacy. We understand how the consumer cooks, how the consumer cleans.
We understand this not just at an all-India level, but we understand this from a geographical lens as well. That provides us the room to really craft the mixes and the brands that are required for this market. The second one, and this is really dear to us, at the heart of the business is our R&D capability, our deep formulation understanding that has time and time again been a differentiating edge for this business, and this is the reason this business stands where it does today. Before I move to the next chart and talk about growing in the new India, I want to put a statistic in front of you. If you look at just the Home Care spends per capita, in a comparable market like Vietnam, they are 2.5x of where Home Care spends per capita for India are.
This, ladies and gentlemen, is our headroom for growth, and this is the runway that we have to take forward for the Home Care business. With that, therefore, what does winning in new India look like? I will today walk across the four pillars that Priya spoke about. The first one is consumption, which is more usage. Second, of course, is, and this is something we have not spoken about before, this is grams per usage that we will talk about. The second is premiumization. This is something that Surf Excel has done well. You have heard about this before. The third is market making, and while Home Care has led this, even today, between all the Home Care liquids, our penetrations are still relatively low, and there is a huge opportunity for us to move ahead. Last, of course, is new spaces.
We have entered the floor cleaners market with the Vim floor cleaner in the last year. So this really is the bucket of winning in new India. Let me start by talking to you all about consumption, because that is something that I want to spend a few minutes on. Why do I believe that there is big headroom for consumption increase in India? There are two big vectors. The first big vector is affluence. As consumers' incomes increase, their laundry consumption goes up. You will ask me why. It is really simple. Our wardrobes expand. We have more clothes, we have more types of clothes, and therefore, as affluence goes up, consumption goes up as well. The second one is a really, really important vector, which is the adoption of the washing machine.
What is happening in India is with more working women, this is becoming the one appliance that is finding a mainstay in consumers. However, even today, only 28% of India has a washing machine. in urban, that number improves. It becomes one out of two. We know that when washing machines come in, the consumption of laundry products goes up in those particular households. Therefore, we believe that HUL is best placed to drive consumption in this market. I think first, our tiered portfolio, the fact that we have offerings across the tiers, that allows us presence in many more households than ever before. High availability. Some of our SKUs are probably one of the most widely distributed SKUs, not just in HUL, but across FMCG. Of course, the fact, and I spoke about this, superiority of products.
We have data to believe that superior products helps us grow consumption with the consuming household that we have. With that, today, I will talk to you about a brand that we do not often talk about. I will talk to you about our Tier 3 brand, Wheel. It is better and stronger than ever before. We have reinvigorated Wheel to become much more contemporary and to become much more competitive. After overtaking our competitor, we are now the largest brand in Tier 3. It is a strong brand today because we have invested in the mix of this brand. It has the highest equity amongst its peers in Tier 3. What is very interesting, if you recall Priya talking about the 377 million Gen Z consumers, two-third of these actually live in rural and they live, of course, in Tier 4 cities.
We have made Wheel relevant to them. In fact, our media deployment is digital first and is deployed towards rural, that has really given us the benefit of really building on this brand, and this will, of course, help us drive consumption as we move ahead. Let me now move to the second and third pillar that we were speaking about, which is premiumization and, of course, the market-making opportunity. So premiumization, even today, and we speak about this often because it has been discussed, but even today, 57% of the market of laundry is Tier 3. It is 3 million tons, which is still waiting to be premiumized. Of course, we know that the value realization as consumers move from Tier 3 to Tier 2 to Tier 1 actually improves as we go along. The second vector, of course, of premiumization is format upgradation.
With format change, whether it is to bars, to powders, and then to liquids, this is a well-known global change. As formats change, and we have seen this around the world as well, there is better value realization for us. Both of these vectors, as you all well know, are something that Surf Excel has used to get to scale, and these continue to be the key opportunities that we have for the brand as well. We have, of course, used these to scale Surf Excel. Like I said, we have seen a jump of 3x in volume and 4x on turnover over the last decade on this brand. Of course, this is sustained growth that we have had over here, and I will explain to you how we will continue this journey as we go ahead. The first one, which is premiumization.
Driving premiumization with Easy Wash is a big opportunity. There is still 3 million tons, like I was telling you, of mass powders and bars. We are the top equity in the market. Also, a lot of these mass heavy consumers tend to be in central India, where our deployment is very deep. We use hearts, we use digital wall paintings, pack price architecture to ensure that we have the right pack going to them. Therefore, this makes it something that we have seen a great record of, but we will continue to do so with Surf Excel Easy Wash. The second one, and I think Priya has alluded on this even earlier. Even today, the category penetration of liquids is only 13%, and we are talking about quarterly penetration here.
I spoke about Vietnam earlier. Vietnam is 5x to where India is today. Therefore, huge headroom for us to grow in liquids. Two key things that I wanted to call out. One is, like I mentioned, when consumers buy washing machines or use washing machines, that is a point of reconsideration for them to use a new format, and we already see that. We see 4x the amount of penetration in machine users versus non-machine users. I think that is one. The second thing is one of the biggest barriers that consumers feel on liquids is are they efficacious enough?
Yeah, and through our marketing mix and through our product formulation, and later in the afternoon, you will hear Vibhav talk about that as well, we have tried to allay the fears of consumers and created a formulation and a mix that actually gives them the right efficacy so that they are able to adopt these liquids as we go ahead. Let me take one more example. Priya spoke about dishwash, and she talked about dishwash bars in consumption. I will talk about the format upgradation opportunity that exists in dishwash with liquids. How do consumers wash their dishes today? Today, they wash their dishes largely with bars. 75% of the market is bars. Therefore, Vim, as the iconic brand, is leading the market development of the liquid segment. We are doing this in a really sustained way because we have identified the right trigger for it.
Let me explain the trigger to you a little bit. Two-third of the country is non-vegetarian eating. What tends to happen is non-vegetarian food leaves a little bit of an odor on the utensils. The liquid that we have is formulated in a way that not only does it clean, but it also takes away or eliminates the odors that are there. Therefore, making it a big trigger for consumers to come in and try the products for us, and we have seen good success on this with Vim Liquid. Of course, with that, Home Care has been the pioneer of really making markets. We have a proven playbook for market making and that too at scale. We have done this at scale over multiple years. I will just explain the model that was called out in the earlier presentation.
I think the first one, and I spoke about this, is a superior product. I use the Vim example to explain that to you, how the liquid works better than the bar. The second is having a clear trigger for trial. Let me take the Comfort Fabcon example. In the monsoon of today, our clothes tend to smell musty, and therefore the promise of freshness, the promise of fragrance, allows consumers to come into the category and try the Comfort fabric conditioner. The third one, of course, is education and sampling. We do this at mammoth scale. We do this in consumer homes, we do this in store, and we do this through quick commerce. There are multiple ways in which we do this. The fourth big pillar is partnerships, which are a critical way in which we are building some of these market making segments.
Let's take the example of laundry liquid. We are partnering with key washing machine manufacturers because we know that the coming in of the washing machine is a key changeover in a consumer's house, and that is when they really change the format that they're using. So that's partnerships. The last, but not the least is we have, of course, trial packs. These trial packs are widely distributed so that consumers are able to access and buy into these categories, try them before fully adopting them. So that really is our proven market making model at scale. Therefore, if I had to summarize Home Care, Home Care is a scale business. It has a proven track record. Critical to our success has been both our deep consumer understanding and, of course, our R&D capability that allows us to give consumers better products and experiences.
We have tremendous headroom to grow. I cannot underline that enough. We are using levers of consumption, premiumization, and format upgradation towards that. We have a tiered portfolio, iconic brands, and a high relative market share that makes us the best place to win. Of course, last but not the least, the stuff that has kept us going, a proven market making playbook that helps us unlock opportunities and unlock them at size and scale. So that's really the Home Care presentation. If I could have the Home Care AV up, please.
[Presentation]
That's it. That's from Home Care. Thank you very much. I'll hand over now to Harman to talk to us through Beauty & Wellbeing.
Thank you, Vandana. A very good morning to you, ladies and gentlemen. I am Harman Dhillon, the Executive Director for Beauty & Wellbeing. 23 years of Workex, 20 of those in HUL and Unilever, and in the next few minutes, over the course of my session, I'm going to talk about how HUL B&W is not just riding the beauty wave in India, it's shaping it. It's my absolute privilege to introduce you to our business. We are the number one beauty company in this country. INR 15,000 crore in turnover, industry-leading segment margin. What gives me and my team the maximum joy is the seven brands which are in the INR 1,000 crore club. What is even more delightful for me to share with you, the next brand which is going to join this august club is Minimalist.
That is scale, profitability, and a stable of most loved brands across the country in one place. That's B&W India for you. I will quickly get into how we are seeing the beauty wave shape in India. This is how we are seeing the beauty market shaping up, and I just want to reiterate the fact which Priya really alluded to. The next wave of beauty in India is not going to be won in one India. The next wave of beauty in India is going to be won in two parts. I am going to repeat that. The next wave of beauty in India is going to be won in two parts because we need to segment India given the affluent spectrum, beauty behaviors, beauty infrastructure, beauty realities of these two spectrums is very different. Let's get into the first part, which is the democratizers.
The largest population in the country, very low per capita consumptions, almost negligible format penetration, still dominantly general trade, heavy shopping missions, and of course, discovering beauty through digital, but TV continues to be the mainstay for a lot of media vehicles, which they are looking at to understand about brands. Contrasted to what's happening with the power spenders and the premiumizers. They are the ones who are already thinking in their mind like the French people, given that's their per capita consumption, or they are thinking like what Indonesia is doing. Of course, vis-à-vis the democratizers, the per capita consumption is much higher, format penetration is already in double digit. Omnichannel is the reality. They are as comfortable buying online, offline, discovering in both places, and last but not the least, beauty discovery, beauty understanding, beauty education has all moved online.
Very few companies in the country can play both of these segments at scale. We can, because this is different beauty reality, different beauty habits, different beauty infrastructures for these two Indias, and it requires different ecosystems. What we have done is built these two ecosystems to win at both these ends with scale. Let's start with what we have built. I will talk first about the portfolio. This is the portfolio I shared with you in 2024. Over the course of the last two years, what we have done is sharply positioned and segmented this portfolio to cater to all of the Indias, especially the two big ends of the spectrum. We are not stretching a single brand across. We are curating the portfolio, which is going to cater to the power spenders and the democratizers.
As a result, you can see the growth index, 30x growth at the top, 3x growth in the middle, and of course, at the core, we continue to get a decent growth in that cluster of brands. But what is most unique about this growth is where the delta is going to come from. The scale of the population, the headroom for penetration, consumption being the highest at the bottom, even for us, despite the growth index being 30x at the top, our delta contribution from the bottom, which is the 3x and the x, is going to be far, far higher than the delta contribution that we will get from the top.
That is just sheer numbers, our scale, right to win, and headroom and opportunity for us to really get more and more consumers into the beauty habit because our start point is 1/3 of Indonesia, 1/6 of Thailand. You take any category, we are starting at the back, but with affluence, that's where the market is going. That's why I said, the next beauty wave is going to be won across two Indias, and we are uniquely placed to win in both these Indias. This is the portfolio, and let me get to what is the ecosystem we have built and the moats that we have built, both in terms of how we are reaching her, which is the infrastructure where she's buying, and how are they discovering beauty. What is the necessity of the day?
At the top, for the power spenders and the top layer of the premiumizers, we need curated end-to-end beauty selling systems. Cordoned off infrastructure for beauty, feet on street who know how to sell beauty, a huge and largest network of beauty advisors who are selling beauty, teams coordinated and cordoned off for selling online beauty, signals which are coming in and helping us making that system sharper. We are going to see a lot more of that in the afternoon when you meet Nir on this. Compare and contrast that to what is needed at the bottom. We need to carry all our sachets, all the access packs on the 9 million outlets that we have. Unparalleled distributive scale.
That's where we are using the other ecosystem to reach democratizers with all the access that we need to create on beauty to get the next set of consumers into beauty. This is just on distribution. Now let's talk about discovery models. First, at the bottom, one message, massive reach, long period of time. That's the old way that we continue to market with very desirable brands and that's very effective, because you need consumers to get into the habit. Contrast with ecosystem that we have built at the top, almost 500 messages per brand, curated for thousands and thousands of cohorts, going out every month, so that there is compound branding which is happening in their minds, which is a completely different way of marketing to the top end, which is the power spenders.
Both these systems are at play, and we are the most efficient and effective when it comes to reaching the beauty audiences in this country. Ladies and gentlemen, for us, the portfolio, the RTM, and the customized reach models are going to be the competitive moats which no other organization in this country can copy. Proof of the pudding. You'll ask me, okay, ecosystem on a page is good. Where is it working? Do we have evidence? I want to share with you, I'm delighted to tell you that for us, the flywheel is getting the consumers to get into beauty at the bottom and catch them as they upgrade on the top. What better metric to measure than the share of new triers at the democratizers end?
We are the leading player, number one player of share of new triers in beauty, whether you look across skincare, hair treatment, light moisturizers. We are getting more and more consumers to build regimes, try out new products. As they upgrade, all our mass-tier brands, they are the ones who are gaining penetration at pace with the power spenders and the affluents. This is for us, the most heartening chart because at the end of the day, the ecosystem is working and the proof is in the numbers that we are seeing. That brings me to what are we going to focus on from here on? Priya already spoke about the four pathways, consumption, premiumization, market making, white spaces, and she spoke about in detail one of the best categories that we have, haircare and the consumption opportunity there.
I am going to focus on the other three pillars from the lens of B&W and taking a few examples. The first one being premiumization. Actually, it is a matter of privilege because as a young brand manager who joined this organization many decades ago, I launched this brand in the country, which is Dove Hair. Today, it is the largest haircare brand in the country and well poised to really take on the opportunity, which is the premiumization opportunity in hair. What is the opportunity? The mass volumes in haircare continue to be 8x what we have of our premium volumes to begin with. That is the headroom where we can really, that is a source of growth where we can upgrade. Second, we know that penetration of conditioners, Priya spoke about it, when you go from the spectrum bottom to up, the penetration continues to go up.
We need a brand which can come in and really get market making going over there. Last but not the least, with increasing affluence, the regimes or the number of formats you are using per occasion continue to go up. What better brand to appropriate that, Dove, the largest haircare brand with a very strong point of view on beauty in India in a very cluttered space. Most importantly, it is the most loved Gen Z brand, whether you look at urban India or rural India. What are we going to do about it? A very deliberate playbook. At the top, continue to premiumize with really cutting-edge technology, which is higher order demand spaces, making sure that we are reversing damage, which is three-year-old from your hair, bringing world-class technology in hair treatments. Priya, again, alluded to it.
These are the masks, these are the bond repair serums, all of it at the top for the power spenders. The same spine, the same science goes to the democratizers in access packs, whether it is in the shampoo sachet, or it is the access packs that we have for these masks, or even what we sell, which is the weekly packs in modern trade. So the same efficacy, making sure that we are catering to the power spenders, at the same time, making sure that we are relevant to the democratizers. This is not just science on which we are going to build Dove.
We are going to make sure Dove is more culturally relevant, sharper, continues to champion for an inclusive beauty point of view, more modern, more SASSY, and in return, continuing to build the brand love which it already enjoys at a massive scale in the country. That's the example I had to share on premiumization. Switching gears, I want to take the second example and talk about market making, and what better category than to talk about sun care? The category, no pun intended, is on fire. Why is that the case? There are structural tailwinds behind it. India is getting hotter and hotter, but the most important one, 200 million plus women are stepping out to work. When women step out, they do want sun protection. This category is being built on advocacy.
Advocacy, which is educating the consumer on the need for sunscreen, and that's the ecosystem that we are creating for structural growth to come through this for a long period of time. What have we done about it? We have made three decisive moves. First and foremost, a multi-brand play. In 2024, we had one brand, which is Lakmé. It's the market leader in sunscreens in offline, but we got three new brands added to the portfolio to talk to the different consumer segments. Second, 100% of these brands have the best-in-class in-vivo tested technology addressing all the barriers, heavier sensories, no white cast, which are already in the market, and we know the consumers are loving it.
Last but not the least, 600 times step up in our advocacy models, because sunscreen is a necessity, and that is something Indian consumers, both women and men, need to be told today, given the adverse impact if you do not use the right sunscreen with the right efficacy. That's what we are doing, and that's the step up that we have done. Coming again to where are we going from here? Again, the deliberate two playbooks in play. At the top end, Minimalist with the sunscreens, which are really light sensories. Simple, sunscreens designed for sensitive skin in fluid format. Lakmé, fast absorbing sunscreens in five seconds, which don't leave a white cast. What makes me most proud is the way the team has landed a INR 10 in-vivo tested sunscreen of SPF 50. INR 10 is $0.10.
Both these are live on Lakmé and GAL, and Glow & Lovely is going to take the charge to not just market development of sunscreen. It's about doing business in skincare in a responsible way, because sun care is responsible skincare, and that is why we are ensuring we have the best technology, best products, and they are all in-vivo tested, and when they go to the consumer, it gives them the protection that they need, which is where the market is growing. That brings me to the third and final example of my presentation, which is the white spaces, and the two that we have called out, which are super critical for us, is masstige and wellbeing. Let's start with what is shaping the structural growth in these categories. India, hitherto was used to be a very cosmetic beauty market.
What has changed is the power spenders want more science in the products, and they are willing to spend top dollar. At the same time, looking good is being interspersed with feeling good and living good, which is why the wellnessification of beauty is here, and the lines are blurring between wellbeing and beauty because beauty is now an inside/outside concept. We have made bold moves in both these spaces. The first brand I want to speak about is Minimalist. This is a breakout acquisition, already a INR 900 crore ARR, soon to join our INR 1,000 crore club. 2x scale up since acquisition, one of the fastest scale-ups that we have seen. What is powering this? We have been radically focused on maintaining the ethos of the brand, which is full transparency. That is how the brand has been built.
We are ensuring in everything that we do, that comes to the fore. The second that we are doing is unlocking synergies, both at the revenue and the cost end given the scale of HUL. That is really helping us take a well-loved brand to the offline stores, to the online stores, and selling it in a way which is really needed for beauty. The third, by no means the least, with the massive R&D infrastructure and patented technologies that we have, we are infusing blockbuster innovations in the Minimalist portfolio, which are going to make sure that this growth is sustained for a long period of time, and this continues to be one of our fastest growing brands in the masstige space in Beauty & Wellbeing. The second brand, actually the segment I want to talk about, is VMS.
It is becoming a really cluttered space at the top. For us, we are very clear we are going to play this with a differentiated portfolio. The first brand I want to talk about is OZiva. This is a plant-powered science brand, which goes to the consumers, very differentiated from what you have in the market, and I am delighted to tell you since acquisition, we have scaled this brand four times. We have done it in a very disciplined manner, making sure that it stays in the VMS space and not being very, proliferating it across topicals and so on and so forth. So very disciplined, very focused on VMS, 4x scale up. Joining this brand from our global portfolio is the global blockbuster, which is Liquid I.V. It is the most loved Gen Z brand for hydration in the U.S. and across many other markets.
We have got this to India, and very quickly, this has become the go-to brand for the Gen Zs. What is going to power this growth for us in wellbeing? Again, our global expertise and leadership in wellbeing across the world, best-in-class R&D and regulatory frameworks which are needed to really win in this segment. Last but not the least, Liquid I.V. is just one of the brands from the global portfolio that we have got. There are many other brands in the portfolio that we plan to bring at the right time, whether it is OLLY, Grüns, and so on and so forth. The question you may ask me right now is, you have shown us two examples. You have shown us examples of how acquisitions have really scaled up well. Here I wanted to talk about not just acquisition, the playbook that we have built at the top.
For the consumers who are the power spenders, it is working even for brands which we have incubated. Simple, it's a brand within the Unilever portfolio, 10x scale up since we started it in India, and this is scaling up at a breakneck speed, already crossing INR 200 crores in ARR. Again, what is it going to be powered by? Very sharp, differentiated positioning for the consumer in the country. This is designed for sensitive skin consumers in this country, Gen Z first consumer, community building, and last but not the least, a very strong omni playbook. With this, I want to just reiterate, why do I feel that HUL B&W is most well-poised to really appropriate the beauty opportunity in India? First and the foremost, we have scale, profitability and whole host of most loved brands in this country.
More importantly, that is supplemented with deep consumer intimacy that we have built across the length and breadth of this country for over 90 years, so that we can read the market, spot the market, and then deliver products and brands which delight consumers. Third, we are very clear the next wave of beauty, and I keep repeating that, is going to be won in two parts. There is no company which can stretch across the board simultaneously at scale at one go. HUL B&W is poised to do that. Fourth, we are going to be ruthlessly focused on the pathways that we have told you about consumption, premiumization, market making, and white spaces. Last but not the least, all of this is going to be powered by our transformed portfolio, curated route to market structures, and a very curated marketing media models.
With that, I want to just leave you with our vision, continuing to be the beauty shapers of India, and what better time to give you a flavor of how we are doing the marketing to this beauty consumer, which is building memorable brand structures at one go, but at the same time, engaging on digital content day in and day out, because that's where we need the thumb-stopping content and virality. Can I have the B&W AV, please?
[Presentation]
That is all from me. Thank you for your time. I am going to hand over to Vipul to take you through Personal Care. Thank you.
Thank you, Harman. Good morning, everyone. My name is Vipul Mathur. I have met many of you earlier, but I have been with HUL for the last 23 years and running the Personal Care business for the last two years. I am delighted to take you through the Personal Care journey. To start off with Personal Care, a quick look at the numbers, INR 9,500 crore business, 19% segment margin, 15% contribution to HUL. But what we are most proud about are our five brands that are INR 1,000+ crore in size and a force to reckon with in every way. This is the strategy that Priya had shared with you, which is really about winning in the new India, and how it translates into for personal care is really on this chart. Consumption, premiumization, more users in formats of the future, and new spaces.
Each one of them has a big, big job for us. I am going to spend a lot of time talking to you about how we are making progress on these. Before I get into the detail of that, however, let me take a minute to just help you understand how the evolution of personal care categories has been happening in India. While this has been made from a point of view of skin cleansing, it is actually true across all personal care categories. What starts with basically what is a hygiene benefit of the category, which is the core category benefits, very quickly starts translating into higher order benefits, and beauty and aspiration is a large part of how Personal Care categories, especially skin cleansing, evolves, and brands need to start solving for needs of consumers in that space.
Then the next ladder up on that is really specialist needs and formats that really address needs of consumers as they go up the pyramid and also as their requirements from Personal Care keep evolving. How our brands are going to really go through these needs is really at the heart of our Personal Care strategy. Let me start by the first point, which is really around consumption. Of course, the core category of skin cleansing, for which all this data is shown, is seeing that even if you look at rural or urban, there is a difference in the growth consumption. Rural itself has got headroom to grow to even catch up with urban, and rural is therefore growing at 1.8x the pace of consumption growth as urban. So that headroom is there to catch up. Why is that happening?
It's happening because of changes in the lifestyle, changes in availability of water, changes in the amount of shop penetration, and that over a multi-year period means that consumers have greater expectations for their personal care needs, and that leads to more bathing occasions, more consumption, and so on. If you thought that rural to urban is one way of cutting it, Priya, of course, showed you how between lesser income folks versus higher income folks, there's a 1.3x growth in consumption. But even India versus other countries, in this case, Brazil as an example, there's a 2x difference in consumption. So consumption itself is going to be a critical driver over a multi-year period for growth in this category. As market leaders with our big brands, we are best placed to ride this consumption wave.
Of course, the consumption is going to be driven across our brands, but the one brand that's going to be at the heart of this is Lux. Lux as a brand is, of course, the OG beauty brand within the personal care portfolio, but it's a brand that needs to be continuously evolving and transforming, and we have been doing that quite actively through the last one year. Science, of course, is at the heart of the Lux journey, and we've spoken to you at length about the Stratos technology that we have, which is at the heart of the science that Lux has on offer. But when it comes to aesthetics, we have evolved from a packaging perspective how the brand has transformed.
When it comes to sensorials, not just the bar of soap, but even the body wash is really showing how sensorial delight is at the heart of the bathing process, and Lux body wash is showing that quite actively. When it comes to being on the social first platform, Lux is now really showing the way with that with a lot of communication, especially centered around body wash. The brand proposition of Lux has been really now designed for Gen Z, and that is what we are trying to change again and again with our proposition shift, and this ad will show you how we are transforming this brand going forward.
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Beginning of the journey on Lux body wash, lots more to follow on the brand itself and on body wash, and that's why we are so excited about the brand that Lux is and how it's going to transform the personal care journey. While that's the core consumption theory, the next part of this is really premiumization. 7 lakh tons is the size of the mass skin cleansing business across the category, and that is the headroom that premiumization has because every consumer in India is aspiring for better benefits, for more specific benefits that our premium brands have to offer. With Dove and Pears, we have not just more premium bars, but very differentiated portfolios to offer.
Dove with its Serum Bar technology and Pears with its glycerin bars are fundamentally differentiated products and are showing that consumers have very useful benefits that they can get with these new very differentiated products, and that is behind the huge growth that we are seeing behind this business. Mass bars versus premium bars, of course, the premium bars as a category is growing much faster, but we are outpacing that premium bar growth quite handsomely. Dove and Pears both are at there. The really good thing is that not only are these brands both very differentiated from mass, but they're also very differentiated from each other. We really have a two-engine premiumization going, and that is why premiumization is so critical to our strategy. No part of the skin cleansing journey is complete without talking about body wash.
Of course, body wash, Priya spoke earlier about what is the difference in the penetration of body wash in India versus any other market. In fact, India is one of the last few markets left in the world where the penetration of body wash is limited. It has hit a point of inflection where the pace of adoption of body wash is now seeing a rapid shift. That is why we are seeing a 4x difference in the growth of body wash versus the rest of skin cleansing. Our business is outpacing this quite handsomely. Our business has grown 4x over the last four years and is now growing quite handsomely to make a material difference to the delta of personal care. We are blessed to have a portfolio in body wash that really addresses these needs.
What we are doing with our portfolio between Dove, Pears, and Lux is driving market development of body wash quite actively. Vandana spoke earlier about the market development model that HUL leverages to scale, and body wash is seeing the full impact of that and the full benefits of that. We are starting with our social first communication, talking about how to use body wash, which itself is one of the barriers that many consumers feel because they don't know how to use the category. Using that to educate them and help them understand the big difference between soaps and body washes.
As we did a lot of consumer work, by the way, to set up this communication, we realized that the big difference that consumers feel is that when they start using body washes over soaps, they find a big difference in the stretch of the skin with soaps versus body wash. That difference takes four to five bathing occasions to really understand and appreciate. That is why generating trials is so important. We have used the might of the HUL system and the scale that it provides to get a massive amount of sampling going on body wash. That, with a very powerful demo, is a great way to educate consumers about the difference that a body wash provides. Our products, of course, are extremely strongly formulated with a lot of technology from across the world that has been put across our brands.
That coupled with our physical distribution that our sales team provides to us, means that this is a very scalable market development opportunity. Like I said, this is now becoming a real point of inflection and making a material difference to our growths. Moving on from body wash into oral care, I want to remind you about really the OG SASSY brand, which has really been made for the youth, which is Closeup. It is a brand we are so proud of. It is the original red gel toothpaste, but also the brand that is made iconic with its Paas Aao communication. This brand is at the forefront of really redefining codes of oral care, and there are two parts of this journey. One is, of course, the core of oral care, which is of Closeup, which is freshness, which is 1.3x growth over the segment.
We know that apart from consumption growth, freshness itself is going to be a big driver of growth in the oral care category, and Closeup is the market leader there and doing quite well with the penetration growth over the last couple of years and more. More than freshness, the part that we are super excited about is the growth story of whitening. If you go to any modern trade customer or market outside India, you will see that whitening in the oral care aisle is sometimes half the aisle. That is the potential that whitening has, and that is why you can see that versus China or Turkey, we are 1/20 the kind of contribution of the segment. But the segment is growing very rapidly because consumers are feeling the need for even cosmetic beauty benefits in their oral care products.
Closeup is really strongly placed to make this benefit count and make sure that it shows up how cosmetic beauty benefits can be provided even in our oral care brands. Closeup is now outpacing the market and is doing exceedingly well on its White Now journey. Lastly, I want to talk to you about the opportunity of deos. It is a new space for us. We are present in the market, but we are seeing that the opportunity that lies for us in deos is really bringing functionality of the product to the core and for providing that benefit to working women.
As the number of working women are stepping up dramatically, the need for very functional odor protection and sweat protection benefits is rapidly expanding, and we have an opportunity to really fundamentally bring odor protection and functionality to the deodorants category, and that's how we are going to build it going further. Of course, Unilever is globally the market leader when it comes to deodorants, and it has technology that's unparalleled and patented, and that is why we are so confident about what deodorants can mean for us in the personal care category. Lastly, I'd say in summary, we have the opportunity to drive consumption. Consumption has massive headroom in this category. We are transforming the market when it comes to premiumization and market making, being the market leaders and being over-indexed in both premium categories as well as body wash. We are best placed to get that advantage.
Our brands are building desire across skin cleansing and oral care, and we are leveraging a very proven market-making model to drive body wash with great intensity. To bring a lot of these brands and the part of that story to life, here's the Personal Care showreel.
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Thank you. That's it from Personal Care, and now I'd like to hand over to Raj, Rajneet Kohli, who is the Head of the Foods business.
Evening to all of you. It is an absolute pleasure to be here today. My name is Rajneet Kohli, Raj for all of you, and I have the privilege of heading HUL's very exciting food and beverages business. I have been here for one and a half years. Out of the 30 years that I have worked, 23 years happen to be in foods and beverages. So, a bit of more insight from working with Coca-Cola, Domino's, and Britannia. Today, I am going to talk to you about three things. One, I keep hearing when I joined in, there is a party happening in food and beverages. Where are we? There is a huge potential there. Second, there is an immense doubling down that we are looking at in reimagining our portfolio.
And number three, we are absolutely geared up not to be only in that party, but actually lead that party there as well with a single-minded focus of how do we accelerate growth. Let me start by saying, we start from the position of strength. The reason I say that, because we are a large business of foods and beverages, INR 14,000 crores, with an industry-leading profitability of 20%. Not only that, really happy that we have seven brands, which are iconic brands of INR 1,000+ crores of business, both really adding. What does it mean to me, all of us? It means that every Indian household knows this brand, they are at scale, and has an opportunity to really premiumize as well as stretch into different categories. We just don't play in these categories. We actually lead these categories.
We are indeed the number one brand with five iconic brands that you can see there, Taj Mahal, 3 Roses, Red Label. Lifestyle nutrition, we have Horlicks and Boost as number one. We are number one in ketchups and sauces with Kissan. We are number one in South in coffee. We are number one in sauce with Knorr. We are number one in jams. This is what I ask you. Close don't see this leadership as an end state. This is actually a starting point because there is absolute significant headroom for us to grow. The reason why I say that, and Priya showed you as well, India is changing. What does it manifest for food and beverages? When Indians get affluent, they premiumize, and that means for a tea and coffee business, you can have more flavors, formats, and functionality. India is getting hotter.
That means we need to move our beverages business from hot to cold. Everybody is talking about health and wellness. That means brands like Horlicks and Boost have a super role to play in terms of protein, fortification, and nutrition. When working women increase, 40% of that, they need convenience. They need time. They need cooking aids. They need condiments. A good story is, at HUL, we have the brands that not only will own these trends, will actually lead in these trends. The reason I say that, if you look at this chart, there is absolute headroom for growth for the foods and beverages business. The reason I say, the packaged food business actually really inflex when you get to EUR 9,300 odd , say about $10,000. Almost 70 million people of India are already there. By 2030, 150 million people will be there.
That's a huge opportunity, right? We are absolutely right in there, whether it's coffee at EUR 5,000 or packaged food at EUR 6,000 , you will have huge opportunity for us to grow. The reason to capture that, Priya shared with you our winning model, which is winning in new India's framework. Four growth levers. I'm not going to go into detail. The great part is with all our brands, whether it's the Taj Mahal, Red Label, Horlicks, Kissan, we have the portfolio to play in all different price points. Across flavor and taste in India changes every 100 km. We are actually there very well-entrenched geographically as well. What gives me a lot of confidence, a really good standing here, is the three strong modes of HUL, and I don't say that lightly. First, the consumer centricity. We know our consumers well.
We know what they eat, what they drink, what they have. Second, an incredible R&D that we have, which is dedicated to foods and beverages in Bangalore. I invite you all to the R&D and the tea excellence center, we know our tea business really well, in Kolkata. These are very, very strong modes, friends. That is why we're very ready to look at a portfolio and drive foods and beverage. For the next section, I want you all to reimagine, and that's the word I'm going to use multiple times because I want to reimagine the foods and business starting with Horlicks. A lot of people said, "Wow. Horlicks? Really?" It's 153 years, not an old brand. I call it as a young brand because you need to pivot. Every decade, Horlicks has pivoted.
In 1928, when Amsterdam Olympics was happening, I have a poster in my room it says that. 1928, you see a runner, he's having Horlicks while having that. When the army people would go out, they would have Horlicks biscuits and tablets to give them nutrition. Why? Because it is based on science and nutrition. That is why a big strategic pivot for us is to move away from just the health food drink that we say, to actually lifestyle nutrition. Therefore, bringing back in the core is science and nutrition back into our core of Horlicks with superfoods. What do I mean by superfoods? All of us know superfoods. As we've added back oats, almonds, and millets. These are things that we know of in India. These are the tastes that we've been growing in.
Bringing back this with NutriMax technology, which means you're able to give this kind of nutrients in a very condensed form to all the Indians. It's nutrition for every day. 6x fiber and also no added sugar. This is the beauty, where we call the sweetness technology that comes in, and Vibhav will share with you also is, it is naturally through mashing of the malts, we're able to bring out the sweetness. We have BCAA, which is branched-chain amino acids. Net-net, you've got the superfoods working for you in Horlicks, bringing back the science in there, bringing what consumers really know about, and about everyday nutrition. I'm extremely delighted to stand here and share with you. For the last four quarters, we've been strongly growing the lifestyle nutrition in Horlicks, and the last two quarter, actually double-digit growth happening in Horlicks as well.
But the story doesn't end here. It actually begins here. A lot of you've seen, if you've been there out in terms of Horlicks getting into protein. I know protein is a large segment, but here are four things when we did the consumer work. There are four big barriers. Firstly, people say, "I don't need protein. Why do I need protein? It's okay. I have my dal. I'm a non-vegetarian. Protein is okay." Second, "I can't digest protein." Third, "It doesn't taste good. It's chalky, bulky. I don't like." Fourth, "All the companies out there, most of them, I don't trust them. I don't know whether it is good or not." When you say, "I don't need protein," my friends, let me tell you, everyone in this room, all of you need protein. That's very important for all of us.
Second is you need a trusted brand to go about. Here are the five things I tell about Horlicks Protein. Proof lies in drinking. It's there on your table so if you're enjoying a protein as well, please do when I talk through. Here are the five things. We've got, number one, we've got 24 g of gut-friendly yeast-based protein. Here is a great consumer insight. 60% of Indians in adulthood are actually lactose intolerant. Let me repeat that. 60% of adult Indians are lactose intolerant. You just don't know it yet. You don't know it. Right? Therefore, it is a yeast-based protein that we've gone through. Number two, we've got probiotic fiber. Why fiber? Let me not answer. Let me play a video which tells you why fiber.
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So that's the story on fiber. Not only having that, we made protein absolutely accessible for all of you. It's in a packet of 28 packets, single-serve packets, in a pack of 1 kg. So no more scooping, no more messing, no more measuring of whether you're getting the right protein or not. Guess what? You can carry it in bag, you can carry it in laptop, you can carry wherever you need to be. The fourth, and a very important job which HUL does its best, is about democratizing protein. We are talking about scale, friends. We're talking about affordable protein. The pricing of this is as low as INR 82 per drink of this, with just 139 cal. Easy to carry and three amazing flavors. Actually, two amazing flavor and an unsweetened flavor because guess what? Only 34% people actually have protein with milk.
Another large sum of people actually use protein, which is unsweetened protein, in their oats, in their meals, in their dal. We have an unsweetened version as well of protein which is there at an affordable price. The fourth one, and a very important one, which people say, "I don't trust." I don't trust what is there out there. That's where the trust of 150+ years of Horlicks comes in. This is not the trust that you can buy. This is not the trust that you can rebuild easily. This is from house of HUL. This is from the house of Horlicks, and we are absolutely very excited about this as well. Not just protein, this is protein for every day, as Priya shared as well. I told you life is a gym. That's an interesting sight.
You spending eight hours plus today here, it's a less an effort, right? You are going to be all through these presentations, spending time through different hearing everybody through. You should have protein. I can tell you, it will pass you through. Absolutely. It's from the Gen Z, it's on the go. I have a Gen Z son. He doesn't like most of my things. He says, "Dad, you don't get it." He speaks a very different language. But this one, he gets it. He tells me this is a brilliant product.
My set of friends are really vibing around this one as well in terms of protein. This is on the go. You can have that, and therefore life is a gym. Real day is your real workout, and that's where we are getting into. Now let's reimagine Kissan. Priya talked to you about as a brand, 90+ years .
You can tell everybody knows it. It's a kids' ketchup brand. We own it. I want you to rise, start imagining Kissan, not just a kids' condiment, but a flavor hacking brand, which is the great Indian food brand. Why I say that great Indian food brand? Because we have the insights. We know what does it mean. This is what Kissan is bringing in. It wants you to unleash the chatura. I mind you, I will speak again. Chatura. Chatura- Excellent. That's it. Because what chatkar jana. When you do chatkar jana means you really like the taste. You lick your fingers. Finger licking good. That is a big thing that we are bringing back, the taste, my friends, in the food business is supreme.
We are bringing back the taste in there, and in that also becoming little edgy where you can pair ketchup with because that's the core and here is what I am going to play an advertising of where we are being little edgy, bring the taste of absolutely Kissan there
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Priya said her mother's going to close her eyes as well when she saw that having idli with ketchup as well. But listen, when it's tasty, you will finish it. You will lick your finger. You will not leave a drop. That is how Indians eat. We eat with hands. We are proud of it and that's what it. Here we have extended Kissan beyond. Priya talked to you about the chutneys. Why chutneys? The Chatt Kar Jao, the great Indian chutneys. Guess what?
The potential when we are taking the Kissan ketchup up in terms of growth because the penetration is still not as high, chutneys in India are consumed 4x of ketchup. Let me repeat. Chutneys are consumed 4x of ketchup. If we can teach as HUL to the India of how to eat ketchup, I can tell you very clearly, we are absolutely geared up to take the Indian flavors of chutneys all across India. You know what is interesting? When we were launching the Thecha, I tried the Thecha, we talked about the silbatta flavor, there is a Thecha we should launch only in west, right? Because people know Thecha, Maharashtra. Nobody knows in south. But everybody has said, every 100 km, people love taste.
Whether it is the Thecha that is selling in the south, or whether it is the coconut chutney that is selling in the north, or the Kasundi olive oil, you will have to pick up your best when you go in the lunchtime today and tell me which you love. People love to flavor experiment, and we have got the entire range of flavors that is coming through. The Indian flavors of Kissan bringing a life to all of you guys. Another one, just another one on our Chatt Kar Jao
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So when you leave this place today, I am sure you are going to remember Chatt Kar Jao for sure. With that, let me bring it to a core of a business, which is a very large business, which is about reimagining our tea and coffee business.
What better to do that with a brand like Taj or heritage of brand of Taj, where we want to take the classic heritage to the future as well on the Taj side as well. Here is the strategy on a page for beverages. We are going to lead the beverages evolution over the next decades. We will run through three simple steps. One is mass to premium, kettle to cup, and hot to cold, and each one of them will be all about how do you get more value per cup. Let me elaborate. When we are a tea drinking nation, and we want to draw inspiration, we said, let us look out how China has been. How the China evolution of tea has happened. Bear with me on figures and charts.
This is what unpackaged tea was in China, 25%, and packaged around 15%, but premium was only 15%, right? Put another functionality, RTD, say around 20%. But then 15 years' time, China has moved there from 25% premium, RTD, and functionality. A 20% moving to a 50%. That is the revolution that is going to happen in India as well. Not the China way, our own Indian way. We love our masala chai. We like our way of doing the chai. But we are seeing the numbers already. In GT, if this chai is being bought, our tea is being bought at 1x.
Already in Q-commerce, the number is 1.5x, and therefore the job for us, and we only can do that really well because we have the repertoire of brands of Taj Mahal, Red Label, 3 Roses, Lipton, is to really take this business from mass to premium and get more value per cup versus just talking commodity. The next one, and this is very important, is kettle-to-cup strategy. I will tell you why. Has anybody been in a joint family here in India? All of you in the room, joint families? Yeah. I have been growing up in joint family. There used to be one kettle, one kind of tea made. Everybody was supposed to have the same tea. But India, 50% of India is becoming nuclear families, which means now it is cup for me. "Meri wali chai." How I want to have it. Enjoying the cup together.
And that is the work that we are going to do is actually moving with Red Label, we have already got these five flavors out of instant tea, and the big line. "Kahi bhi, kabhi bhi." Which means anywhere, anytime, you can have your real good tea. All you need is hot water, mix it up and your deliciously cooked tea is there ready for you. And then last one, you heard the temperature all, Harman, Priya, all talk about India getting hotter. That means our beverages cannot be hot only. We need to be in cold side as well. And we saw the China numbers as well, how big the cold happened. We already have more than 14 SKUs in the RTD, which is ready to drink in terms of cold coffee and Bru, Boost, as well as Horlicks.
And this is where we are going to expand our next generation in terms of growth as well. So ladies and gentlemen, the Foods menu for growth is simple three things. We are doubling down on our core. We are reimagining Horlicks with the core on super foods with protein as well.
We are looking at Kissan, Chatt Kar Jao, flavor hacking in a big way. Third, we are looking at beverages. From mass to premium, kettle to cup, as well as hot to cold. But this is a very important one. Listen, I am neither a soothsayer, neither have a crystal ball to predict the future. But I can tell you with a lot of confidence standing here, knowing my team on food and beverages, they have this growth hunting mindset. And we at HUL are absolutely confident of leading the growth in the next decade in the food and beverages business.
Very happy to share those plans. Thank you. God bless. And let me invite with that, our dynamic CFO, Niranjan Gupta on the stage, please. Niranjan.
All right. I seem to be standing between your lunch and the session. Thanks, Raj. Exciting session on protein. I am certainly going to carry some more. I already have my fridge stocked up, and my wife tells me we have to buy a new fridge now given the amount of protein drinks that I am storing there. Good afternoon, ladies and gentlemen. Once again, a very warm welcome to all of you to our Capital Markets Day. As an introduction for myself, I spent my first innings 20 years in HUL. Innings because I am a big fan of cricket, so all my analogies are on that. Then basically I went around gathering some external experiences through metals, mining and auto industry. One fine morning, I was driving motorcycle on Delhi-Mumbai Expressway, and then finally landed here in HUL and thought I will never go back.
That brings me back to HUL, which has been my home ground after 11 years of spending outside. Before I start, happy Janmashtami to all of you and to all of us. Talking about festival, as you heard from Priya and from our business heads, it is indeed a festive time, I would say, for FMCG in this new India and huge opportunity for growth across consumer cohorts. The party has just begun. You also heard about our clear strategy and plans to deliver competitive volume-led growth through the three vectors of consumption, of premiumization, and of market making. Not just this, we also decided to expand our play area by looking decisively into some of the new spaces. All of this means that we will need to step up our investments and at the same time, we need to ensure earnings growth as well.
How are we going to do this? This is what I am going to cover in the next few minutes. Firstly, and of course, having spent eight years in auto industry, can't stop myself saying that when you have four engines of growth, you do need fuel for growth. Therefore the first task is to generate adequate fuel which can power these engines of growth. The four levers that we are going to deploy to generate the fuel, the first one is going to be improving premium mix. I want to talk a bit about that. The second probably is more obvious to all of you, is the operating leverage as you drive volume-led growth. The third, we are going to step up our savings programs by launching Future Savings Lab, which is a multi-year program we are launching. The fourth one is driving AI-led media effectiveness.
You will hear more about this even in the breakout sessions. Let me talk about the premium mix. Priya talked about how our portfolio and market share is over-indexed to premium versus mass. When we look at our portfolio and the plans for growth, our growth in gross margin accretive portfolio is going to be 1.5x the growth in the rest of the portfolio. I am just repeating it. Growth in margin accretive portfolio based on our plans is going to be 1.5x compared to rest of the portfolio. The three elements of that, there are more, but I will just talk about three. One is D4C packs, as people tell me in abbreviated norms. So it is designed for channel. You can see already that in play, but that is going to be more in play as we move forward.
Examples are very simple, whether you talk about sachets in GT, you talk about small made bottles in, let's say, Q-commerce, you talk about large bottles in modern trades. You have this design in not just pack size, but actually pack formats as well, whether it is the Tetra Pak or the cans. You design for channel appropriately to actually not just your packs, actually portfolio as well. Like in Q-commerce, you are designed for more premium portfolio, and therefore, the design for channel is going to be one of the key vectors of driving premium mix. The second is margin accretive innovations. We recently had launched Vaseline Gluta-Hya, and Harman spoke about that. That innovation has been so successful, it is actually de-seasonalized the moisturizer category.
In a very short period of time, the innovation has become almost 6% of the Vaseline core, and that comes at a 500 basis point margin accretion over the core. That is just one example of how we are going to drive margin accretive innovations moving forward. The third vector of this is what you heard throughout the presentations on how we are creating desirable brands. As you create desirable brands through our SASSY framework, then what you can do is to actually stretch the brand premium pricing power, and that allows you to enhance your margins. You will see in the R&D breakout session, the desirable brand session, as to how we are creating those brands more desirable and therefore the brand premium is the brand power keeps on increasing allowing us to make it more premium, offering more value to the consumers.
Those are three vectors on how we are going to improve premium mix and drive the portfolio of premium at 1.5x on margin accretive versus the rest. The next one is operating leverage. This is actually very obvious as you drive more volume-led growth because that has been our renewed strategy from last one year once Priya came and launched that. As you drive more volumes, then there is an obvious leverage that you get on fixed cost. But even other than that, beyond the simple mathematics of it, what we are going to do is to three intentional efforts behind that to ensure that our fixed cost growth is slower than our revenue growth. The first is leveraging technology and AI across operations, right from manufacturing operations to our distribution centers. In fact, we have launched our first digital distribution center, Yogesh, I think it is Vijayawada where we actually put in.
That allows you to actually grow with much slower growth in your fixed cost base, all the elements of those. Second is maximizing asset efficiency. We have been doing that, but as volume grows, then as you need to add, let us say, more machines or more CapEx or more lines, we have a way of adding agility and tracks to the same machines, and that effectively means that your asset efficiency goes up and hence, again, your fixed costs related to assets grow much slower than your overall revenue growth. The third is the cost discipline and leadership, which we have always been doing. We have actually moved from something called a zero-based budgeting that you have always heard about to an outcome-based budgeting. It is not just about return on capital employed, it is measuring return on every spend.
That how can every spend give you more and question what that spend is resulting in terms of the outcome on either the growth or the bottom line. Combination of the three along with volume-led growth means that our fixed costs will grow at 0.7x, 0.8x of our top line growth resulting in operating leverage. The third element of that is Future Savings Lab. You've heard through years about our Symphony program, which is our annual program which we do on a continuous saving program that we do. What we are launching is a structurally multi-year program along six, seven vectors, which will enhance our savings program by 100 basis points over this five-year period. I'll touch upon the three elements of that. One is the value chain transformation, and that effectively is moving our manufacturing footprint and distribution footprint closer to the demand centers.
You've already seen a few months back, we announced a INR 2,000 crore CapEx of putting a site in south, which will do a lot of premium format, a lot of liquid formats there, which allows us to distribute our manufacturing footprint and thereby reduce your logistics cost. Equally, we are revamping our distribution center footprint, being closer to the demand centers. All of that are structural programs which will result in logistics cost savings. Apart from that, it will also result in actually lower inventory, which I'll touch upon when I come to cash generation. Second is strategic sourcing. As you heard, we've launched Unilever Fragrance House, which is basically bringing fragrance design in-house. What it does is it allows faster development of fragrances.
It allows seamless partnership with fragrance houses, in-housing multiple experts, and therefore you are able to deliver more efficacious fragrances much faster at lower cost. Again, you will see in Vibhav's session, in the breakout session, in the afternoon, more details on that. That's again another example of how we are moving towards strategic sourcing and leveraging our savings program. The third is the next gen science platforms. You will ask me, "So what's new in that? You guys are great. You have science platforms. Unilever, of course, has more than 4,000 scientists. We've got more than 90,000 patents. So what's new in that?" The new in that is that the discovery on materials never end, and we all know that.
You need to keep discovering, and we've got a global science infrastructure of scientists, of our labs, of our years of history of science to be able to discover materials much faster. Not just that, and materials you all know, whether it is polymers, enzymes or copolymers or oleochem or petchem, all of that. The thing is that, yes, the materials can be discovered by anyone else as well. But the magic lies in the combination of these materials. How do you combine them? It's like all of us know what ingredients go behind cooking. We all know spices, we all know everything, but we all can't be master chef, because the master chef knows the combination in which it can actually give you superior taste. I think that's the combination that we are talking about, which allows us to deliver more efficacious formulations at lower cost.
There is a whole program behind this, which is getting launched. There are three vectors of stepping up our savings program through Future Savings Lab. The fourth one, my favorite because I am a big fan of AI. I have to use it because my daughter uses it much faster, so I have to just keep pace with it. What we are doing, and again, you will see in the breakout sessions, is it is transforming in the way that we have never imagined before. We are just taking media as a vector. We are, of course, the largest advertising spender in FMCG in India. We spend close to INR 5,700 crores. Annually, we generate 30,000+ digital content creators we have in our ecosystems now. We spread it across, you saw 21 brands, more than INR 1,000 crores. Of course, we have a portfolio of many more brands.
We also spread it across multiple channels because the channels have been evolving. It used to be traditional TV, then connected TV, then you got the digital, social, all those platforms. That means a large amount of proprietary data that we have. That can be leveraged far better by infusing through AI tools. It depends on the proprietary data that you have, the brand worth that you have, only then you can use these AI tools. What we are going to use, and you will see that more, is a Sangam AI tool, which will allow us to deploy media deployment on a real-time basis, combining with a tool called Rapid ROI. Effectively it means there are two, three things. One is content creation through AI, and you saw some examples.
I do not know how many of you realized, the Closeup ad that Vipul showed was entirely AI generated. So when you generate content through AI, you generate it 50% faster, maybe 75% faster, and at probably half the cost or 75% lower cost, and more effective, and you can turn it around much faster. So that is one vector of media effectiveness. Second is the entire deployment, because you need to continuously fine-tune behind which channels, which brands do you deploy media in order to get your maximum return. So it is not a once-in-a-year exercise that you can do, given the way consumers are evolving, given the way the market landscape is evolving, and therefore the Rapid ROI combined with our Sangam, which are the tools leveraging our proprietary data enables us to do that.
We expect all of that to transform into a bare minimum of 10% more media effectiveness, and therefore, these are the four vectors that I talked about in terms of generating fuel, which will power our engines of growth. Once again, repeating, premium mix, which means 1.5x growth in our margin accretive portfolio. Operating leverage, fixed cost growing at less than 80% of our top line growth. Future Savings Lab, stepping up savings program by 100 basis point over five years, and the fourth is AI-led media effectiveness, at least 10%. All of this we expect to generate 500 basis point of fuel for growth over the next five years. Of course, then we deploy this fuel that we generate behind lines of P&L that can power this growth. There are four elements of this that I will touch upon, and one is desirable product and packaging.
That's one element of investment. Because usually what happens is when we talk about investment, the first thing comes to our mind is our A&P. It's not just A&P, it's about investing in multiple lines for growth, and that's what I want to stress upon. One is desirable product and packaging, and you saw examples of how Vaseline got transformed, how Dove got transformed. We saw Kissan, we saw Horlicks. Those are the examples. Second is media and sampling, which I think we understand much better and much simpler in terms of the investment. Third is pricing and pack price architecture, which again, you saw some examples. I think Vandana was talking about those Maha packs of the Vim bar or the other price packs that Vipul talked about or Harman talked about. So pack price architecture is very important element of investment to grow in different channels.
The last one is channel investments. Again, channel investment, typically, we assume to be terms of trade. It's not just that. A channel investment is about visibility investments. It's about investment in the place where the consumer is interacting with the product and with the person who's selling it. Therefore, as Priya talked about when we are talking about specialty channels, chemist channels, beauty channels, all open format stores in GT, all of those would require channel investments in order to catapult our growth. Those are the four lines of growth that we will deploy fuel for. As we do that, we'll be choiceful about the prioritization, and again, on the three vectors I'll just explain.
Let's say for consumption, now obviously, you will do in some proportion all the four lines, but on consumption, when you go to let's say bigger pack, you'll focus on the price pack architecture far more on the consumption side. On the premiumization, obviously you'll focus more on desirable product and packaging and media far more. On market making, which is, you can see the Surf Excel liquid there, you will focus on, let's say, sampling more and then the other vectors. So this is how we choicefully prioritize and deploy behind each of the growth vectors that you heard. So this is our playbook for deployment of fuel. Now that talks about the P&L generation of fuel and deployment of fuel.
We also talked about that we would be doing portfolio shaping, we'll be entering new spaces, and that means that we need to generate cash at a super efficiency and deploy that, which is what we call deployment of capital for growth. This is our capital allocation framework, which is 100% cash conversion. So whatever profit converts into cash because of our working capital discipline, I'll talk about that. What we're going to do is to step up productive CapEx investment. So as we dial up volume-led growth, then obviously it means that the growth CapEx has to go up, and I'll touch upon that. The second is investing in reshaping the portfolio. We've been doing it in the recent past. You heard example on Minimalist and OZiva from Harman, and I'll talk about how we are going to do more of that in the new spaces.
And third, of course, the third element of capital allocation is dividend payout to shareholders. We continue to be the top quartile company in terms of our dividend payout ratio. In terms of the cash generation, the model is clear. We continue to be efficient in terms of our working capital management. You heard me talking about when I talked about the Future Savings Lab in terms of the manufacturing and distribution footprint closer to demand centers. That again offers another opportunity for inventory optimization. Equally, on the creditors, we have been very efficient and there is more headroom there. There can be some minor headwinds in terms of the channel shifts on the receivable number of days or the media shift in terms of the A&P creditors, but that in our overall scheme of things is not material. It is very small.
Just to tell you, the A&P creditors are just 10% of our overall creditors. Moving forward, general trade will continue to be a channel, as you heard from all the business heads and Priya, in terms of source of growth. Therefore, we will continue to be efficient on working capital, on the negative working capital. Negative working capital, as you know, automatically means the more you grow, actually working capital generates more cash rather than requiring more cash to be invested. This generation of 100% cash conversion will be deployed in terms of CapEx strategy, where we are lifting up our CapEx guidance from 2% of turnover, which is what the range has been, to 3% of turnover to actually power the growth vectors. Out of this, almost all, almost 85%, 90% of that will go towards growth and savings programs.
The growth actually enables the volume-led growth, and the savings allows to generate the fuel which you actually deploy behind growth. That is going to be our plan moving forward on capital deployment. The second element on the CapEx part of it, beyond the third element of growth and the savings, is about on the portfolio. We have been doing bolt-on acquisitions. You saw Minimalist growing 2x in two years. I would say it is not even two years, it is probably 18 months, Harman, right? We rounded off to two years. Then OZiva, which has grown 4x in four years. We will continue to do that. You heard from Priya on the exciting opportunity of high growth spaces that are evolving in FMCG space adjacent to our categories. Clearly, we will continue to have three-pronged approach to it. One will be our existing brand extension.
Heard from Raj about Horlicks, the most trusted brand, getting into protein, which is a huge space and growing exponentially. That is one example of that. We will continue to leverage our existing brands. The second, of course, is getting brands from Unilever stable or creating our own brands. There are many brands still in the Unilever stable which we have still not gotten here or leveraged at time to time. We will look at that and get them here. Third is bolt-on acquisitions, similar to the two that you saw that we have done recently. In summation, the capital deployment strategy is around 100% cash conversion, continue to be efficient there. Step up CapEx from 2%- 3% of turnover, which powers growth as well as the savings program to fuel growth.
And third, invest behind new spaces because the new spaces, as you saw, is going to create 20% of our delta turnover over the next few years. Finally, that leads to then our thesis of volume-led profit growth. Again, as a reminder, the first line is competitive volume-led revenue growth. That will be our strategy. Generating 500 basis point of fuel, deploying that, which creates a flywheel because you deploy more volume, it actually generates then more fuel. As we are moving forward, as you've heard, structurally, we are shaping our portfolio towards higher margin mix. That means that structurally, our portfolio is moving towards higher EBITDA margin. That is why we are raising our guidance on the higher end of EBITDA margin from 23.5% to 24%.
I repeat, because we are shaping our portfolio structurally to higher margin mix, we are lifting our EBITDA margin guidance on the upper end from 23.5% to 24%. Equally, we do recognize that from time to time, we may need to invest ahead of growth, and therefore we are making the margin range little wider and making it 22%-24%, which allows us flexibility to invest behind growth, ahead of growth when required, while structurally shaping it towards the higher margin end. That's the revision in our EBITDA margin guidance moving forward. That, of course, leads to volume-led profit growth and the whole cycle then repeats. Of course, creating value through drivers of growth, generating fuel, deploying fuel, brands, these are the playbook that you do. But the enduring value only happens when ESG is embedded in the business model.
We always treat ESG as integral to our business model and not as a separate stream that we carry. Clearly, on all the vectors of ESG, whether it is environment, social, or governance, we lead the impact. On environment, I'll touch upon one. For instance, 97% of our operations are now powered by renewable energy. Similarly, on social impact, 12 million-plus people are positively impacted through our Prabhat program, which is centered around our operating centers. Of course, we always hold ourselves to the highest governance standards and will continue to do so, whether it is completely independent chairs of all the board committees, whether it is the risk management principles or our values and the culture of business integrity, we'll continue to hold ourselves to the highest standards of corporate governance.
ESG will continue to remain embedded as a business model integrated into it because we feel and we believe strongly that's how you create enduring long-term value creation. This brings me to my final chart. The starting point of all that is values. You will find this strange coming from a finance person of numbers. There are no numbers on this chart. But it all starts with values. I deeply believe that values lead to value creation, and value creation then leads to valuation. Ladies and gentlemen, I think we are at the inflection point of growth with immense opportunity in new India. The next decade is going to be India's decade. It's going to be a decade of consumption, and it's going to be a decade of HUL winning in this new India. Thank you very much. Over to you, Yogesh.
Thank you, Niranjan, for that insightful session. With that, we come to the end of the plenary sessions. Before we break for lunch, let me share a few instructions. For the participants joining us virtually, you can join back at 4:00 P.M. India time. There will be a break for you guys. Hope you have enjoyed the sessions, and see you after the break. Welcome back, everyone. Hope the breakout sessions have given insights into all our capabilities and our enablers. We now move to the last session of the day, which is the Q&A. For Q&A, participants in the room may raise their hands and ask a question. For virtual participants who have joined us back, can log in to the link and ask the questions. We will prioritize the questions in the room.
I would request those in the room asking questions to state their name and organization before asking the question. With that, let me invite Priya and Niranjan on stage for the Q&A session. Where are the mics? I see many hands. Maybe there's Manoj. Everybody will get a chance. We have 45 minutes for the Q&A.
Manoj.
Manoj. Sorry.
We need to get a mic to Manoj.
Hi, team. Brilliant sets of insight through the day, and thank you for that. This is Manoj Menon from ICICI Securities. I have got two questions for clarifications. One, on the CapEx. The 2%-3%, what is the, let us say, the drivers for this increase in CapEx? Is it intensity, or you are seeing, let us say, double-digit volume growth very soon?
As we mentioned, the intensity of CapEx increase is driven by two, three factors. One, of course, is to cater to growth. As Priya presented, we are going for volume-led revenue growth, which will be competitive. So one part is the growth. Second part, of course, is savings CapEx led. Which means that some of those CapExes will lead to savings and also better service. Like we talked about INR 2,000 crore CapEx in the various premium liquid formats in south, which essentially caters to growth as well as to better customer service because of distributed footprint, and results in logistics savings as well. It is a combination of the two, and it therefore denotes our belief in both growth and savings.
Yeah. Thank you, Niranjan. The second, Priya, the question is, lot of clarity on what you are doing on the newer spaces, younger brands, newer channels, et cetera. But some examples you could talk about your core, let us say, core brands like Glow & Lovely, Lifebuoy. Just help us understand, let us say, some actions which are already in the market, and how do you, let us say, plan to accelerate growth in the core? Thank you.
When you think of our core brands, firstly, our core brands are across our categories. I will come to Glow & Lovely and Lifebuoy, absolutely. But I want you to think of all our core brands across our categories, whether it is Wheel, Clinic Plus, Taaza, Lifebuoy, Glow & Lovely. We have a range of core brands. You saw Vandana presenting on Wheel. All the work that has happened, we have now taken leadership in tier 3 in laundry. That was not the case, and Manoj, you know our business well. That was not the case, if I go back to when I was running home care, that was certainly not the case. That is because of the work that has happened to strengthen the brand. So the brand has strengthened, and it all comes back to that framework we have shown you on stepping up our brands.
So when we put in the science, we have the right aesthetics, we are talking to the young in the country, and we are actually making it much more modern, contemporary. Our core brands as well lift up and become stronger, and it shows up in terms of our competitiveness. So that is firstly the framework I want you. I can do the same thing talking about Taaza and how Taaza has been built. I can talk to you in the same way about Clinic Plus, and the fact of iconic brand that it is even today in our shampoo category. Let me now come to Glow & Lovely and Lifebuoy, because I think behind it is a specific question on those two brands. Firstly, Glow & Lovely and Lifebuoy now for the company, I want to context it, are in only mid-single digit contribution to overall HUL.
I think it is important because this is overhang otherwise that stays of these two brands. So I think that is the first context that I want you to keep in mind. The second is absolutely we are working on making these brands desirable as well, because they have an important place in our categories in the company. So let me start with Glow & Lovely. Glow & Lovely, you saw Harman sharing the work that is happening, both on the core but also in premiumizing Glow & Lovely. So I thought the great example that she showed you on sunscreens, and the fact that if you think about who needs sun protection, by the way, it is the person who is in rural India, who is out in the open, who is facing the sun.
Glow & Lovely has always spoken about this issue of actually having sun as an aggressor and how we can protect consumers. So what we are now offering is a brightening product which also gives you sun protection. When we do that, Glow & Lovely becomes stronger. The third way for you to think about it is in terms of the entire portfolio that is being built. If you think about what Harman shared on skincare, and I am just using skincare as an example, we not just have Glow & Lovely, we have Pond's, we have Lakmé, we have Dove, we have Minimalist, we have Simple. So it is now the whole portfolio of brands that serves our skincare business.
Thank you.
Yeah. Thanks. This is Abneesh from Nuvama. I have two questions. First is on home care. Home care has been a star category for you. Three sub-questions. First is, in dishwasher, the number two player has vanished. Essentially, would you expect that in home care, Vim Dishwash will be your fastest growth over the next two, three years? Second sub-question is, you are taking Vim to now floor cleaners, floor wash, et cetera. In this category and earlier the bathroom cleaner category, there is another very strong number one player. If you can share how Domex did, is there any learning from Domex towards the Vim floor cleaner because you will face the same challenge here. Third sub-question will be on the new startup company in detergent took you head on on comparative advertisement. Generally, we see Lever doing that or Lever being aggressive on that.
This time we did not see that and I understand it is sub judice, but what kind of impact this has because clearly they are trying to be now the Nimble kind of brand. If you could address that.
Abneesh, let me start with the third thing. As you know, the matter is sub judice, so I am not going to comment in a lot of detail on this matter as I rightly shouldn't. But I think what I want to remind you is how HUL creates products. Our products are completely safe and they absolutely meet all safety standards that are put by BIS and standards that we maintain for consumer safety. That is all I would say on this, and I will not say more as the matter, as you know, is in court. Yeah. On the other two, let me start with dishwash, and I think you are alluding to dishwash liquids. The biggest opportunity for us is not about competition.
It is about exactly what I talked about, which is the growth that will come in bars from consumption increase, the opportunity to premiumize through liquids and market develop the liquids category. Huge headroom, right? I showed you that numbers, Abneesh, the Thailand versus India numbers. Huge headroom for us and no better brand than Vim to develop the category. Honestly, I don't think of it as what is the market share when I look at Home Care because of the size of our opportunity being what it is in home care, it is very much about consumption, premiumization, market development, and when we do that right with the portfolio that we have, we are best placed to grow the Home Care business. That is really what I would say to you. Remind me the third question. Sorry.
Vim floor cleaner-
Got it.
-versus Domex.
Understood. I think when you look at our Vim floor cleaner product, it's very important. I'll go back to my framework of desirable brands, and the first thing I would want to bring your attention to is the science behind what we've put into Vim floor cleaners. Our Vim floor cleaners have a specific scientific reason why it is better because it is a technology that actually has superior malodor technology. When you think about floor cleaning, that is a very, very critical variable in what you do. It is a superior product. Listen, again, we are here for a multi-year bet and everything with, again, very underdeveloped category. Again, we can get into competition and thinking about it as taking on competition.
Our job is to develop these markets with our reach, our distribution might, our ability to take a strong brand like Vim and leverage it across household care. That is how we see it. I do not know whether Vandana or Vibhav you want to add something on this. Sorry, I will use my executive team who are also here, so let us make sure we have mics that they can use as well, guys.
My second and last question is on body wash. So, a few sub-questions there. One, if I see how has the Stratos technology done for you, because clearly Lux and Lifebuoy last three, four years has been quite, I will say, challenging for you, and you have been quite candid about it. So has Lux and Lifebuoy come back if at all they have come back? Is it because of the relaunch and aggressive and new product formulation or is it the back end? Why I am asking this is the number two player again here, they also said that their market share last few quarters has been stagnating last few years, which means either you are winning or rest of the players are winning.
One related tech question on body wash is, liquid body wash clearly looks very exciting on paper, but has not actually turned out the way some of the other liquids in, say, fabric wash have done. We see, for example, Palmolive now outsourcing it to Bombay Shaving Company. Would you need to do that? You have lot of D2C in-house core competence. My question is, would you need to do that or is it fine that the existing body wash team continues to do liquid body wash?
Abneesh, I will answer the second question. I am very excited. Thank you for asking that question. I would have said the same thing to you a decade ago when I launched Surf Excel liquid, that there was no market, right? I was the person who was in Home Care at that time when we launched. It takes multi-year marketing and there is a moment, and Vipul shared this, where the market starts to inflect. I think that is what Vipul alluded to. We are at that moment where we believe that body wash will now inflect because it is starting to get that critical mass, and we are the leaders in body wash in the country today. We, yes, in liquid body wash, I am happy to share, so that data point you should know. We are the leaders of the liquid body wash segment, and we will drive the market development.
It is about our investment, and we will drive that same playbook. That is what we push it, that playbook of ensuring we have superior products, we have the right understanding of what it takes for consumers to adopt. What are those triggers that make consumers convert from bar soaps to liquids? What do they enjoy? He talked about that stretchy feeling of the skin. You saw it in the Lux advertising. What are the barriers? What do consumers worry about? Wastage, they worry about how do I dose? How do I use? That understanding that we have, the fact that we are doing this first with the young consumer, sampling program at scale. We will play out our playbook at scale, and we will drive multi-year the market development of body wash. The second question you are asking is in terms of Stratos.
Firstly, Stratos for us has a proven technology in terms of superiority on skin. That is the first thing that Stratos has done for us across our brands, and I think Vibhav mentioned we are now also taking Stratos for premium brands because we are absolutely convinced that it actually benefits us on skin benefits across our portfolio.
Yeah. Thank you. Hi, this is Avi here from Macquarie. Two questions. First of all, thanks for this detailed framework on the growth. First, but just wanted to understand this 40% incremental growth that you are talking from market making. Could you give us a sense on how large this portfolio is right now, and which segments are giving you confidence to drive such a large incremental delta from this segment?
I shared it in my charts, the penetration of each of the categories. You remember the chart where I showed you the sub-segments, which are these are They were sample of some of the market development cells, which you saw across, and the index to Indonesia. Those are the key cells. There are some others, but those are some of the key cells that we are talking about in terms of doubling down for market development. They are present in the chart, and those are the cells. What gives-
Yeah. Sorry. Go on.
Let me-
Go on.
What gives us the confidence is exactly what we said. Our market development playbook gives us the confidence. We have done this before. You have to go back to our track record, guys. We have done this before. We are the largest company in CPG. In all these categories, we are the leader of the market, and our scale gives us the opportunity to actually go and develop the markets. It is also our consumer understanding. I will always go back to that. In the end, it is the deep understanding we have of consumers, which will allow us to convert consumers into these categories.
Any idea of the salience, what currently it stands? Because what I'm trying to better appreciate is for 40% of the incremental growth to come from it, current salience should be material, or how does it stand? Just to understand what are the growth rates you're kind of assuming or implying over here in a little.
Listen, I'm not going to share a guidance on exact numbers, but what I'm saying is I've shared the structure, right? The structure of the growth we shared to you is 40% of the delta will come from consumption and premiumization, 40% of the delta will come from market development, and 20% of the delta will come from white spaces.
Okay. Just second bit, given the confidence that you have kind of indicated on the growth, how you're kind of looking at this, just taking it from the last time when we met, would it be fair that you expect an upgrade from where we were arguing for a double-digit earnings growth trajectory. You think it is possible to You would kind of aim for a much stronger trajectory in the medium term, say teens or something like that? How should I look at that?
We are not going to give you a guidance in terms of numbers. The guidance we have provided is FY 2027 will be better than FY 2026. The guidance that we're providing is competitive volume-led revenue and profit growth. The guidance that we're providing is that the shape of how we will get the growth is 40%, 40%, 20%, and the EBITDA margin range, which Niranjan shared. Niranjan, if you want to add anything.
We are also putting money behind our strategy, which is evident from lifting our CapEx from 2% of turnover to 3% of turnover.
Okay. Thank you. Thank you, Niranjan.
Hi, Percy Panthaki here from IIFL. Two questions from my side. Firstly, on the per capita consumptions and penetrations, you mentioned that 60% of India is at Indonesia per capita income. The penetrations of per capita consumptions are significantly lower. Even if you assume the remaining 40% is a non-consuming class, it would still be lower indexed for that. Therefore, just wanted to understand, what is holding back consumption? Because it's clearly not income, it is something else. What is that something else? If we understand that, then we can understand better as to what will make it grow. That's the first question. Second question is on new product introduction, premiumization, so on.
Niranjan, you mentioned that the new products would have higher gross margins, but often in the premium space, we see that the cost structure is not in the gross margin, it is in the A&P. It is not necessarily only because the brands are subscale. That is the nature. Even in medium terms, even when the brands get bigger, those kind of premium brands require higher A&P. Therefore, my question is, even in the medium term, once they scale up a little bit, do you see these new introductions in the premium space being EBITDA margin accretive? Because what we have seen, at least in some of the new D2C brands, which are listed, even when they get 1,000+ kind of a scale, their EBITDA margins are below what HUL would have as a company.
Here is a dichotomy that you have premiumization. The premiumization does not give you a better margin. Is it a premiumization worth having in the first place? These are my two questions.
Yeah. Let me try and first answer the second one. Then you are going to have to remind me of the first because I have honestly forgotten as you asked me the second. It was a very interesting question that you are asking. Firstly, I would say to you the financial algorithm in premium tends to be different compared to the financial algorithm of a mass business. This is really what we understand so well as a company, right? The financial algorithm of premium business, you are absolutely right. It depends on the category, though, I would say to you. Very different in home care, very different in Beauty & Wellbeing, very different in foods. I would say it depends on the category, firstly, but I do not want to give you one answer.
A premium brand in Home Care has very different economics because the economics of Home Care are very much on scale economics, right? A very different economic model. I think when you are referencing, you are talking a little bit more about the beauty products, because some of the beauty products and the economics there, listen, I ran the global business for Beauty & Wellbeing, tend to be high margin, high investment, still very good EBITDA margin. It is a period where there will be investment, but structurally, these are the high margin sales with high EBITDA. Now, why is it that you see our opportunity is exactly our scale? Because with our scale economics, whether it is you think about procurement costs, supply chain costs, Yogesh shared with you what we are doing on our DCs.
All of this is what provides us the economics, which are very different from other players. Just remind me of the first question, please, again.
Yes. The first question was that our per capita consumptions or penetrations are very much lower and therefore not explained by the gap in the income.
Yes.
We do have the income, but we are not consuming as the other countries consume. What is the reason and what do we do to get there?
I think that is actually the biggest opportunity. I do not see that as a problem. That is our opportunity. We are the market leaders of all these segments. When we have a multi-year market development, we are exactly seeing how that growth starts to compound. We gave you the example of Home Care liquids. That is exactly what we will do across these categories. When we invest, we educate consumers. What is missing is the education to consumers. When you start to do it, you invest behind it, you do the sampling. That is when the markets. Markets are made by marketing companies, right? Markets are not created just like that. Markets are made when companies invest behind it, they create the right products, they take it to consumers, and that is exactly what we plan to do.
If I may just build on Priya's point on innovations, like you talked about many of the D2C brands, new brands, they struggle for EBITDA margin. One, of course, is given that we have our entire scale that comes into play of synergy. Any new player will have to put up the entire system altogether de novo, and that has a larger cost. But the second also is our margin accretive innovations. Does not mean every time we will put a new brand. When you put a margin accretive innovation on the existing brand, like Vaseline Gluta, how I explained, then of course, you are starting with a high margin and a leverage on the A&P of the overall brand itself. While for the D2C, when you are launching new brands every time, a new brand takes far more A&P.
I think that is leverage we have, and therefore, large part of the margin accretive innovations will be on top of our existing brands, which actually lift the entire EBITDA margin profile.
Mihir and-
Thank you so much.
Speak up.
Can I ask?
Yeah. Of course.
Please, Arnab.
Hi, this is Arnab from Goldman Sachs. My first question is on the Foods category. It is really exciting to see HUL do a lot more than in the past. However, there are still vast swaths of the Foods categories where you do not operate in majority. Now that the parent does not have a Foods business, how do you think about the overall play over the next many years, beyond the categories you already operate? Would inorganic also be an option in Foods as you look to expand the portfolio?
Firstly, our Foods portfolio as HUL is very different from the Unilever Foods portfolio. It has always been. Because if you look at our Foods portfolio, firstly, it's a beverages portfolio first, Arnab. It is a beverage, tea, coffee, lifestyle, nutrition, and Kissan. Firstly, very local brands, very different from the parent in terms of the brands that we have. The spaces in which we operate are very different. So it has always been a very different business from the Unilever business and foods. The second is India's stand, and Raj shared this. That's such an exciting opportunity in terms of the inflection point. Within the spaces in which we operate, huge opportunity, right? That's what Raj was sharing. From hot to cold in beverages, from kettle to cup.
Some massive opportunities in the way we will. Lifestyle nutrition alone, such a big space on wellness, and we own the most trusted brand in the country on nutrition with Horlicks and Boost. So huge opportunity there. Absolutely, I'm glad you saw the unleashing of Kissan and you excited about what we are doing, and that's just the beginning of what we will do.
Just a follow-up question to this. What I meant is in the past, there may have been some constraints on getting into completely new categories in India. Now that it's a completely local business here, do you see it still as an adjacency expansion or could there be something more big bang in terms of getting into really large categories in foods? Also, Foods is generally a lower margin business, though not always, but in general, if you look at many of the Foods companies, is that a constraint that you have a guardrail that you don't want to operate in categories where margins are maybe mid-teens, but the opportunity could be quite large in terms of long-term growth?
Arnab, if you look at our entry into protein, it is exactly that. It is an adjacency, but it's a completely different way to get into the market. A very different market, huge potential, but we have the nutrition science, like I was explaining and Raj explained to you. So we believe with the nutrition science that we have, we can unlock and grow and democratize the protein market. So that's really the way we are thinking about it. Like every category, as I said, when we look at the opportunities, we will absolutely look at our right to win as HUL, the size of the prize, the profit pool over time. Across our business, we operate in every category with different margin profiles, right?
When you are playing in core mass, as I said, the financial algorithm of a mass core business is different from the financial algorithm of a premium business. We already do that today within our business. That is the way we look at it at a total entity.
Hi. On your right, Tejas. Tejas from Avendus Spark. Hi, Priya. Hi, Niranjan. Priya, some of us have been coming here for last many years, 10 years plus, and I cannot recall any occasion that most of us would not have gone unimpressed with the effort that we put in. Then we reconcile with the numbers. We realize also that there is a macro problem also. At our scale, we cannot decouple from the macros, and hence Percy's question is very important that the North Star of our hope or inflection point is that per capita income. Now, when you study some of those countries, when they crossed that point, there was no competing category as consumer electronics, which was catching the aspirations of the youths or the larger mass.
Now, in that context, when we see, and you would have studied all those geographies very closely, do you believe that for what happened for them at $3,000 perhaps will not happen for us $5,000, $6,000 first because we have to accommodate such a large category in the wallet share out of in last 20 years? Today, consumer electronics is as big as FMCG in wallet share, which was not the case perhaps when those countries were crossing that number. Just your view, because that is the anchor point of all our effort merging with the macros also.
Yeah. Firstly, I think the way to think about it is exactly the way we showed the grid, right? There is a huge opportunity that exists for consumption itself, and it is not something that is far away because it is happening within India as well, between value seekers and affluent. Just as people in India get more money in their hands, they change their behaviors. They change, and I described it. Whether it is the number of dishes you have in the home, Vandana described the number of clothes you have in your home, or whether it is indeed how you take care of yourself, what you want from your hair, from your skin. Your aspirations start to change, and that changes your behavior. I think that is happening at every end of the pyramid. I think the way to think about it is the grid.
In that grid, the way it will happen is there is an increase in consumption, there is an opportunity to premiumize, there will be new segments, and we will look at completely new white spaces as well, as we said. Our opportunity is across this engine, and that's really how I would think about it. I don't know, Niranjan, if you want to add anything.
I mean, the biggest evidence of this is, let's say, within India itself. So where, like we showed in some of our presentations today, the per capita consumption of some of these categories is 3x in the affluence urban part versus the rural other parts. So as that picks up, clearly there's an evidence within India in geographies that there's 3x opportunity it moves up. So the movement is very evident, whether you look at even how our detergents liquid penetration has moved in south. So it's very evident here within India itself, even in the context of, let's say, a combination of distribution of the wallet of consumer, as you are saying. Yep.
Second, Priya, your read on our track record of forecasting trends, and this is more a question as a consumer than an analyst. If I see last 10 years, 15 years, we responded to Ayurveda challenge, then somewhere we responded to herbal, then D2C, then of late, science-based product. I can understand that the way some of the other guys operate, perhaps the agility at their scale is better to kind of launch products and kind of create trends. But do you believe that somewhere our agility to kind of create trends, or in fact, I'll be happy if you prove me, if you give some instances of us being wrong, but we are leading a trend where others are copying in last two, three years or five years.
So firstly, the entire Home Care example that I will give you is where we have led the category development, whether it is liquids, whether it is dishwash, whether it's the premiumization of the powder market, we have led that. Body wash is exactly the same. We are leading, and I just shared, we are now the leaders of body wash. This wasn't the case. We are now the leaders of body wash. We are leading the market development. I think the way to think about HUL will always be that we are scalers. There may be some small trends, as in we make choices of where we want to play because we have so much opportunity with our existing business, but we are scalers of categories, and that's the way you should think about HUL.
Thank you.
Yeah. Hi, good evening. This is Harit from Investec. Just two questions. First was on Niranjan's slide on volume-led revenue and profit growth. Just on this, if you look at times of high inflation, the volume-led revenue growth algorithm changes a little bit because you have pricing and the impact of inflation on consumer demand. Just wanted to understand if we are once again entering in that phase, and is also that the reason that maybe you've given yourself some leeway at the bottom end of the margin also to keep that 22%-24%? Just your thoughts on how the near term could play out from that context.
Before Niranjan answers, I'm going to-
Sure
-say a few things, and of course Niranjan will add. If you think about the categories in which HUL operates, what are those categories? We are in detergents, dishwashing, cleaning yourself, body wash, tea, I'll go on and on, right?
That's right.
These are basic everyday commodities. Even in inflationary times, there is some elasticity. I am not suggesting there is zero elasticity, but the price elasticity is much lower in these kind of everyday products versus discretionary categories. That's the first way for you to think about it. Our focus is on the fundamentals, going back to the fundamentals, building desirable brands, ensuring we have a future fit GTM, and making sure that we build new moats as we have shared. When we do that right, we are well proven we can manage the cyclicity that comes. Inflation, deflation. This is a playbook we know well. Focus is back to fundamentals in the business, and that's how you should think about it.
Got it.
If I may just add. Look, inflation will come, inflation will go. I think what stays is more users, more usage, right? And how you create desirable brands and premiumize. I think that's the algo that remains sustainable for future, and that's why we are calling out more primarily as a volume-led revenue growth. When we say volume, by the way, in our parlance, we call it UVG, and therefore it is volume plus mix both together. I just want to clarify that part.
Consumption and premiumization.
Absolutely. That's what I'm saying, because normally volume sometimes can be just tonnage. That becomes more sustainable and that's why the focus on that. The second element which you said, the EBITDA margin guidance, no. It's not impacted by anything of the short term. This is more, as I said, very carefully thought of, is that, A, and I repeat again, that structurally our portfolio is getting shaped towards higher margin, and therefore, over the plan period, over a medium term, we do see that there's a potential to move the margins higher. Having said that, you need to invest many times ahead of the growth. Many times you only have asked, you guys have asked that, in fact there was another question that is your margin ambition sacrificing growth, XYZ.
This investing ahead of growth then provides that width of the range, provides the flexibility to invest. Which is where we've widened it to 22%-24%, lifting it up at the upper end and giving ourselves a headroom range of 200 basis points. It's not impacted at all by what's happening in the current inflationary scenario.
Very clear. The second one was slightly academic. When you define winning, right? Is your definition value, market share, volume, market share, as in from a category to category perspective? What's your definition of that internally? Is what I wanted to understand.
Like we've said, it's competitive volume-led revenue growth.
It would be volume market share, right? Competitive volume means volume market share.
Competitive volume-led revenue growth.
Got it.
Let's go with that.
Thank you.
Hi, this is Latika from JP Morgan.
Hi, Latika.
Thank you for very insightful presentations today. One of the things, Priya, we have noticed since you joined is a lot of India-specific focus on initiatives, right? Today also we heard in-house packaging, in-house R&D, in-house fragrance lab. First of all, what is different in your approach versus what was happening in the company, say, before you joined? Do you think this is a genuine inflection point for revenue growth versus the last five years what HUL has seen, or should we just expect incremental improvement?
First thing, Latika, I am glad you enjoyed what you saw today. Thank you for that feedback. I think the way to think about HUL is firstly start with all the strengths that we have. I was a part of it over three decades, and it is not something that was created in the last few years. Whether it is the strength of HUL is our brands, right? Our portfolio. This was not invented in the last one year. We have an incredible portfolio of brands, a deep understanding of science, and I think you would have heard Vibhav talk about it, and I hope you saw that deep understanding we have of science. Or whether it is how we are taking what we have on our distribution moat, but really deepening that moat with specialization, with really thinking of how we will build this future fit GTM.
The way for you to think about it is we are taking the moats we have and strengthening those moats, and therefore going back to those fundamentals, and I will keep coming back to the fundamentals, which is consumption, premiumization, market making, and new spaces enabled by stepping up the desirability of our brands. Why is desirable brands important, Latika? It is because, very simply, consumers are changing, right? India is a new India. When you have a new India, you take the brands. We take our brands. These are our existing brands, and we are making them more modern, more contemporary, more relevant for the consumer of India of today. That is how we should think about it. India is changing, and therefore, with that, the brands we have need to step up and be in sync with Indian consumers.
All right. The second question was more near term. We saw very little macro commentary in the slides today. Should we read it as there are more company-specific lever confidence that could drive growth better for you? Additionally, if you would comment on how are you seeing the consumer sentiment today? Inflation is picking up, crude at 90+ levels, rural. If you could share some thoughts on how are you seeing rest of the year playing out for you. Thank you.
Niranjan.
Yeah. On the near-term macros, first of all, the GDP print has come out well at 7.8%. If you look at all the key indicators, and I will come to inflation later. But you look at all the key indicators, you look at GST collections, they are holding up well. If you look at advance income tax, they are holding up well. If you look at BSE 100 companies' Q1 growth, that is holding up well. I think there are more and more parameters, just even outside GDP, which tells that it is holding well. What we are seeing even now, while the inflation continues to remain elevated, but I think because of various programs that the government has done proactively, the consumer price inflation, CPI, because that impacts overall.
Because eventually, like somebody said, it's the impact on the wallet overall, rather than impact on A category or B category, and that is indicated by the CPI. But still holding around 5%. For a country like India, anything between 4%-6%, which even RBI is comfortable with, holds well. It doesn't destroy consumption. What we are seeing, even as we speak, demand to be stable. Yes, crude remains elevated, but so far we are seeing the demand to be stable. Yeah.
Hi. Sorry. Hi, Priya. This is Mihir here.
The reason-
That's okay.
Latika, the reason why we didn't dwell too much on macros is what we are saying is that, look, we are looking at structurally as a strategy over the next five-plus years. Therefore, when you look at that, it's more the structural changes and composition of the economy that actually impacts, which we touched upon. Beyond that, we being leaders in more than 85%, 90% of the portfolio, it's also our role to then drive growth, consumption, penetration, premiumization, and capture that.
Thanks.
Hi, Priya. This is Mihir here from Nomura. Thank you for taking my question. I must say, it's always great to see the work that HUL is doing to stay ahead of the curve and the large headroom for opportunity that India provides, and then you keep highlighting the same. But when one looks at the recent past performance, the outcome does not triangulate with the opportunity. I just wanted to understand, can you talk a bit more on what are your views? I have my views. Everybody will have theirs. What are your views on the problem areas that were there, which was anchoring that growth down or negating the good work that you guys were doing? What was the solve for that, and the work that you've done on that specific problem area? So that's question number one.
Yeah. So I think the way to think about it, firstly, listen, the demand environment was different. I think it's very important to think about the context of the overall demand environment, the macros, and how that's changed, right? For CPG overall. We have a very subdued demand environment in which we are operating. Second, we've been very transparent about the areas that we needed to do work, right? There were some segments, brands on which we needed to do work. The third is in terms of our portfolio transformation that we've been doing, both in terms of the desirability of our brands and in changing our portfolio and transforming it towards higher growth areas. So that's the focus. Back to the strong fundamentals, I will never tire of repeating that we're a consumer products business.
It's about desirable brands, future fit GTM, and ensuring that we deepen our moats, always underpinning the four areas of growth that we've gone behind. So very simply, that's the bedrock. It's taking the strengths we have and making them stronger.
Understood. I will talk of the demand environment maybe on a one-on-one basis. My second question is, can you talk a bit more on how the Gen Zs are consuming? You did touch upon it in your presentation versus what the earlier generations or the millennials were consuming. Is there a gap that needs to be solved there? Because if you see from 2020 to 2025, there were 11,000 new brands that were launched as per industry reports. Of course, only 230 odd brands crossed above INR 100, INR 150 crores, but that is even a sizable number, which would have taken away the opportunity that would have been there. Firstly, they saw the need gap and they kind of acted on it. Wanted to know how you are thinking about it. I see quite a lot of work done behind that.
How do we address that something like this does not happen and take away the potential opportunity, given that your right to win is significantly superior across everything, right from product to distribution to marketing to everything.
Firstly, I would say to you, Mihir, think about it in each of the categories in which we operate. Let us start with home care. I would say to you that we are gaining competitively across our Home Care cells. You think about new brands, the opportunity of Home Care and the economics of Home Care means that you have to scale. Very different opportunity. Think about tea. Very similar category. Think about soaps. Very similar category. I think when you are talking about new brands, firstly, it is in some subsegments of where we operate. I think that is the first thing you need to keep in mind. The second is absolutely, and we are transforming, right? We are transforming our portfolio where we believe we need to have the right portfolio. The third thing, and I will keep coming back to that, is scale.
Are not the barriers to scale in this country have never been higher? Because it is getting more complex, and that is the reason I showed you the cell grid. It is getting more complex in the country. The economics are very different at different ends of the pyramid. We require different skills to drive consumption, premiumization, depending on where the consumer lives, depending on what channel she is buying from, and remember where India lives.
Understood. Just last question, if I can just push in one more. We usually compare our per capita consumption to many other global countries, et cetera. Is that the true way to look at it? The headroom of growth will always look superior. Because if I think about a consumer of France, a consumer of Indonesia that you spoke about, our cultures are the way-
100%
-the consumer who would move from the bottom of the pyramid to mid or mid to the upper end may not necessarily consume the same way. I understand the examples on dishwash and the other clothes that you gave. How should one think about the true opportunity? If that be true, then we should see significantly different kind of a growth profile, which we are not. Your thoughts around those.
I also showed another chart and which was on the difference in India between value seekers and the affluent within the country. Not just, one is we can compare to other markets, and you are absolutely right. They make categories in which the consumption Foods is a great example, right? Where the consumption habits for India might be absolutely different depending on what we eat, how we eat, very different taste profiles. Absolutely true. That is why I showed you the difference within the country as people get richer on the levels of consumption. So that is very important as well. It is not just index benchmarking to other markets in the world. It is absolutely indexed to also how consumers in India are behaving as they become more affluent.
Looking forward. Thank you so much, Priya. All the very best.
Thank you.
Thank you,[inaudible]
Hi, Priya.
Yeah, hi. Sorry.
[inaudible]
Maybe Amit, you go first, and then we will come to you.
Sure. Thanks. Priya, I have. So this is Amit Sachdeva from UBS. One question, I think thanks for the presentations and 40%, 40%, 20% framework for growth acceleration, and also I particularly like the idea that you are massifying the premium through excess packs, which could be tailored to your own strengths of distribution. I also feel at some level that categories, given the changes in the industry structures of e-commerce and the way things are being consumed, beauty, for example, is getting fragmented big time. Now you are over-indexed to Lakmé brand as a beauty sort of bellwether for you. Now there is a Korean beauty on the other side, there is celebrity-led brand which are being promoted by the platforms. So are you kind of playing it through small warrior, with so many warriors fighting different battles?
Given your reach globally, when Korean beauty is a trend, and with your global presence and ability to procure, why aren't you playing several trends on beauty? Even in mass, for example, there is a space for a mass beauty, which is not being exploited by you while we can sort of I just feel that why portfolio is not being thought through more aggressively when that fragmentation is happening very aggressively.
Yeah. I think that is exactly what Harman was trying to share, which is saying that we have changed our portfolio to add a completely new portfolio at the top end of the pyramid in beauty. Listen, I am going to first answer the question of beauty and then zoom back into total HUL.
Sure.
But first, let me answer your question on beauty, because absolutely right. Listen, everywhere in the world, within beauty, though, I would like you to think differently about hair and skin.
Sure.
That is the first thing I would say to you, is it is a very different dynamic. It is the same across the world. The hair market tends to be more consolidated. It is absolutely right that the skin market across the world tends to segment, and it is just the needs of the consumer that starts to change. So that is absolutely the right observation. And we are changing our portfolio. That is exactly why we went and we acquired Minimalist. We have built Simple. We are scaling up the brand. And we have a wide array of Unilever brands that we will absolutely consider bringing in at the right time. But if you look at it from a total HUL context and look across our categories and segments, actually this plays to our advantage. And we have higher shares as you go up the value chain.
Priya, I was actually referring to more from color cosmetics angle as well.
Sure.
While skin is a large part of the beauty regime as well.
Fair enough. So I think again, on color cosmetics, actually the biggest opportunity of color cosmetics, it is an under-penetrated category in India. The work that is happening, which Harman and the team are now doing, is to actually again remind consumers and talk to consumers, educating women about using color cosmetics, and it is this. As women step out to work, and Harman shared that with you, this is a huge opportunity. Actually, color cosmetics penetration in India is very low. I have indexed it to other markets in the world. Extremely low, and typically, women in India mostly just wear kajal. That is the only color cosmetic at some scale that is present in India. So huge opportunity for Lakmé.
Got it. Second question, if I may, is on home care. I would assume that, Priya, you would have dominant share in the premium space and very competitive in the mass space as well. Now, with liquids becoming part of the It is like a category is being redefined in some way, because premium is giving entry to a new format and consumer needs to be educated.
I just want to correct you. We are redefining the market.
Of course. Sure.
Sure.
What I want to ask is that, is your shares in, for example, liquids, exceed that of share in the premium? What I mean to say is market is getting redefined.
We are the leaders of liquids as well.
Sure. But in that same proportion?
We have absolutely similar shares across formats.
Okay. There is no real market shift happening because of liquid as a new format.
We will gain when liquids grows. Very simply, if that's the answer you're looking for, absolutely. Because we are driving the market development of liquids. You know, liquids is currently only 7% of the market.
Sure.
There's no point discussing market share of liquids, but we are driving the development of the liquids market. The size of the prize lies in developing the market, teaching consumers how to use liquids in the country. Huge headroom opportunity, and the largest brand and the most premium brand in the laundry category is Surf Excel.
Got it.
The largest brand in dishwash is called Vim.
Sure.
Yeah.
Hi, Priya.
After you ask two questions.
This side.
Sorry.
Harsha, I am from the sustainable investment and stewardship team of Northern Trust Asset Management. My question is more towards the sustainability side. I wanted to understand some more details on the weightings and the metrics of the sustainably progress index in the LTI. I am not sure if it includes India-specific sustainability goals or is it just global?
No, we absolutely shared, and I think Niranjan shared with you the work that is happening across climate, nature, plastics, and livelihoods in India. I will just give you an example of plastics, just as an example. I could pick up any of them. I am just picking up plastics as an example. Firstly, we pick up from the country today more plastic from the environment than we put into the environment. This is something that we have declared and we share. We have a very strong program on what we say is reduce plastics, better plastics, and no plastic.
Basically, what is reduced plastic, we are constantly working on light weighting and reducing the amount of plastic that we consume. The second is in terms of better plastic, which is post-consumer recycled plastic, and putting that post-consumer recycled plastic into our products so that it is a more sustainable form of plastics.
The third is in terms of no plastics, which is paper-based products wherever we can. There's a lot of work happening in this space, but that's just one example. I could give you exactly the same statistics, and we have clear targets for ourselves in all four areas.
What portion of this, the environmental part of it, would it form like? Could you give a weight or a metric attached to it, like in the LTI?
We actually have our clear goals. In fact, we review our sustainability targets at the board level. There is a CSR and sustainability committee at our board level. Then below that, we have at the management committee level, also a committee that actually reviews. Then at a Unilever level, also globally, they review all these targets which are actually flown down to the relevant people who are driving this and form part of their KPI. It's very tightly monitored, A, from a global perspective, and second, from a local perspective, right up to our board.
Just one more quick one. This is more on the supply chain side. You've committed to having suppliers representing 50% of procurement spend, sign the living wage promise by 2026. Just curious to understand where this stands and how you assess whether commitment translates into actually living wages actually being paid? It would be better answered by
I think maybe, if Yogesh, you want to help answer.
Yogesh or Dinesh want to answer.
Mic, please.
Can we send the mic?
[inaudible]
Firstly, I will say this, whatever the commitment was there, signing with the supplier, we are really progressing well. Whatever the target, in that target framework we have signed and we are progressing well. Whatever we committed, we will really make sure that we will do this.
Thank you.
Aditya and Nihal.
Yeah. Hi, Aditya from CLSA. Just one question. You talked a lot about the playbook for Unilever and we have seen it work over the years, but how do you evaluate this given that we are having this long-term discussion? Because one of the things I found was, Raj's presentation was very insightful and very different from what we have seen typically. From your perspective, given that a lot of you are long-term Unilever-
Unilifers as well.
Unilifers, how do you evaluate this playbook time to time and adapt it? Because one of the things I found, at least my experience, was that maybe you were slow on quick commerce or some of these modern channels, and now you're trying to fix it. How do you go about that?
I think when you think about the playbook, firstly it's linked to how consumers are changing. I think, that's what you're referring to, Aditya. The back of the question is, listen, are you keeping up with the shifts that are taking place with consumers? That's exactly what we were sharing with you, and I hope you saw it through the day today. If you think about how we did market development in the past, let me give you some examples to bring it to life. Earlier on it would be mostly television advertising, for example. Now we have a social first way. I hope you saw what Vibhav shared with Dr. Sujatha, talking to consumers about how Horlicks is better, right? We're actually putting our science on social media with scientists talking, publishing some of our science.
This would not have been relevant if you look back in history because consumers did not access social media the way they access today. Absolutely adapting our playbooks for what is relevant for the consumer of today, that's one good example. The other is in terms of sampling. Earlier on we would just do physical sampling, door to door. But today we also do digital sampling with using some of our partners to actually sample affluent consumers through digital. That's really how we are working on defining our playbooks across the cell grid and changing and deepening what we do.
Got it. Thanks.
Yes, Nihal.
Yeah. Hi, this is Nihal Jham from HSBC.
Yeah. Hi, Nihal.
Two questions. Priya, first one was report card. If you look at the last Capital Markets Day, that time also the aspiration was of a strong volume growth. It came up at 3% if you look at 2024 to 2026. So f rank look back, leaving apart macro and commodity, what could have been better? As you sit here and guide for obviously things to improve, what is giving you more confidence, assuming the macro and the commodity stays as it was?
What's giving me confidence in the fact that we'll have competitive volume led growth is our deepening of our fundamentals, ensuring that our brands There are two things in the end that matter, if you think about it, three, four things that matter in consumer products, Nihal. The first is desirable brands. When our brands are relevant to consumers, not just the consumers we have, but new consumers. I hope you saw today a lot of the focus on how we are getting new trials into our brands. So making our brands more desirable, more contemporary. What we are very conscious of, Nihal, is our portfolio that we had of yesterday is not the portfolio. When I mean portfolio, I mean the existing brands and the way they showed up, and the new brands, the same brands in the way they need to show up in the future.
That's the transformation journey that we are on. So I showed you the transformation for Vaseline. I showed you the transformation for Dove. You saw some of the transformation of Horlicks. I can go on and on. Kissan. So I hope you saw through the day the transformation on our brands to make them more desirable, more contemporary, more relevant for new India as we are calling it. That's really the first thing that gives me the confidence that we are stepping up the desirability of our brands. When we step up the desirability of our brands, we are well placed to acquire new consumers beyond the consumers we already have on each of these categories and brands. So that's the first fundamental step for me.
The second is our go to market, and we already have a strong distribution mode, but you saw what Nir was talking about in terms of building the specialization across the chain, across the different channel types that emerge. So think about that grid that I shared with you. It's about the different, the places where consumers shop. So it's from quick commerce and ensuring we have the right organization, the right capabilities for quick commerce. On the other hand, in rural, ensuring that we have the right capabilities, deepening our mode, improving the quality of our distribution, or indeed in specialist stores, whether it is beauty stores, whether it is open format stores, we are doubling down to invest in capability, how we show up. Nir talked to you about distribute and discover and the capabilities that we're building in this space. So those are the two.
And new moats that we are building, AI is something that we shared, how it will make us more efficient, faster, more agile. At the scale of HUL, when we can be agile, that is a huge advantage that we can create for ourselves. Then back to in that house, our fundamentals, driving consumption, premiumization, market making multiyear with our existing portfolio, that is our biggest opportunity. We have a portfolio, we have the scale, we have the depth of reach. When we do this multiyear, that is the compounding average that we get. Selectively, as we have shared, we will enter new spaces and double down behind that. It is the fundamentals that essentially give me the confidence that we can have competitive volume led growth.
Just to build on that, we are already seeing parts of it coming in our performance through a sequential step up in the last four quarters, three, five, seven, and 10. Early days still, but obviously the parts of that has started reflecting in our performance.
Just one quick question. It was very interesting to see in Beauty & Wellbeing the power spender portfolio grew 30x. I know that includes Minimalist incrementally, but is that the part of the portfolio that will drive B&W ahead? If possible, what is the ballpark contribution of that in B&W?
Yeah, I think what Harman shared with you is there is opportunity on both ends of the pyramid, and not just at the 5% power spenders at the top. Remember the contribution of India, I will always come back to where India lives, right? Where are we living? Where are the consumers? 70% of India live in rural and Tier 4, 20% of India live in small towns, and 10% of India live in large cities. The power spenders, as we call them, are 5% of the country, premiumizers are 60% of the country, and 35% of the country are democratizers. I think that is firstly very important to ground ourselves in. The second is beauty, and the biggest opportunity in beauty is not just in the shift that is taking place in our portfolio on the top, but it is in democratizing beauty to the many.
The portfolio that we have there, we have the brands consumers find aspirational. When you think about Dove, you think about Lakmé, you think about Vaseline, I will go on and on. Those are the brands that consumers want to buy into as their incomes start to change. When the democratizers get more money, these are the brands that they find aspirational. Our brands have the reach. We are creating the formats. I mean, a great example of it is Glow & Lovely sunscreen. If you take Glow & Lovely sunscreen at INR 10, we are creating access to formats that those consumers never had access to. Because remember, in India, given price is a variable, right? We would all agree there are consumers in the country who cannot afford a lot of things the top 5% can afford.
So when we create the science and the efficiency of our science that Vibhav talked about at the right, and therefore the entire spectrum. The wave in Beauty & Wellbeing is not just at the top end of the pyramid, but it is in democratization of formats to every Indian consumers, and that is what our focus will be. So it is playing both, very simply, Nihal.
Thank you.
We are just on time. Can we take-
Maybe let's take the last two questions.
Last two.
All right.
Yeah, hi. The first question is on Minimalist. Basically, what is it, like I was perhaps asking earlier, in the HUL architecture, what is it that led us to buy it and not build it? Because if you look at it was inspired by a global trend, which was already successful and proven to some extent globally, not in India.
Yeah, sure.
So if you could, yeah, help in understanding what was the lacking feature?
I think when we think about our portfolio, we think about it in the following way. The first is that we look at our own brands and scaling them, right? We have a huge opportunity with our own brands. A great example is the latest launch of Dove into body lotions. When you think about that opportunity alone of taking the most loved beauty and personal care brand and extending it into a new category, firstly, that's our biggest opportunity. I shared some numbers with you all. Our number nine brand for us has become number five, and we are absolutely convinced that we are number two brand. So that's the pace of growth that we see for Dove in beauty and personal care. So first is taking our existing brands, extending it. These are the most loved brands.
I was just saying to Nihal, these are our most loved brands. The second, it's really about the opportunities that stare at HUL, right? So that's the first and the largest opportunity. Remember the X, 2x that I showed in terms of delta opportunity across the chain. So I think that's very important. The second is in terms of bringing in new brands from Unilever. Simple, Nexxus, and now we are scaling that, and Harman shared with you how we are scaling that. The third is in term. And there are many Unilever brands that we can still bring in, absolutely on our radar. The third is we look at opportunities for bolt-on acquisition where we believe that the brand has a great fit into our portfolio, and we can scale those brands.
We provide them the opportunity to scale those brands, and that's exactly what we've done with Minimalist.
Thank you.
If I may just add. Minimalist actually is a classic example. We have done buying and building both. So we bought the brand, and then we built it to 2x in 15 months. OZiva, we bought the brand, and we built it 4x in four years. So it's about at what scale you buy and then build. So we are doing a combination of buying and building both in that case.
Secondly, one of the things is when it comes to management compensation and incentives, if you look at it like you guys have a Unilever ESOP plan, while what we are buying here is Hindustan Unilever. So why do we not have a Hindustan Unilever ESOP plan for the management, and why do we have a Unilever ESOP plan?
Our ESOP plan is exactly in ratio to the holding. 62% of our ESOP is Unilever and 38% of our ESOP is HUL. It is exactly in relation. We all, I am compensated through HUL shares as well.
By the way, not just the, because there is only one part of the compensation. The other part is our annual-
Bonus
-bonus.
Our entire bonus-
Exactly
-Is 100% linked. Entire team.
The only-
Bonus is 100% linked to India performance.
There are only three targets: top line, bottom line, cash.
I have no bonus if HUL does not perform. Me and my team have zero bonus if HUL does not perform. Very simply.
So it is significantly-
100% linked.
Rest assured, it is significantly linked to how HUL performs.
What parameter the variable kicks in?
Thank you for your question.
Good. With that, because there was only two questions and we are out of time. All the questions online have been answered, mostly in the room. I think with that, we come to the end of the Q&A. Thank you all for, I think, quite insightful questions. Thank you, Priya, Niranjan, and the entire management committee, for sharing the views on your strategy. Before we close, I wanted to invite Niranjan, you to stay on stage and give a vote of thanks.
Thanks, Yogesh. We come to the end of a long day, and thank you all for joining us today and for the thoughtful questions and engaging discussions throughout the sessions, including the last Q&A session as well. We greatly value your time, interest, and continued engagement with our business. On behalf of the entire management team, thank you for your participation, and we look forward to continuing our dialogue with you in the months ahead. I would also like to thank the Shobiz team. Can we have a big round of applause for them? The investor relations team and the organizing team for their outstanding efforts in bringing this event together seamlessly. Before concluding, I would request all participants here to enjoy the high tea and refreshments in the lounge room, just a floor down.
On your way out of this block, please collect a small gift hamper we have made for you with an assortment of our SASSY and desirable brands. Thank you so much for attending, and have a great evening and a great weekend ahead. Thank you.