HUL plans on strengthening its footing in breakfast space to meet changing consumer demand towards traditional alternatives
Hindustan Unilever plans to launch traditional South Asian breakfast options such as khichdi, upma and pongal as consumers are now switching towards traditional Indian or healthier alternatives from western cereals.
The new products, made of millets such as jowar and bajra under its ayurveda brand Ayush, will mainly compete with MTR, Kellogg’s, PepsiCo and Marico in the Rs 3,000-crore breakfast market.
Why is this important
- HUL intends on tapping the 3000 crore breakfast market as consumers are now switching towards easier ready to cook or eat options.
- Moreover, Indian consumers prefer healthy over tasty options & HUL with it’s traditional healthy breakfast options is poised to grab the opportunity pie.
- Besides, HUL will directly compete with MTR, Kellogg’s, PepsiCo and Marico and will also take the fight to Patanjali.
How will the stock be impacted
By shifting its focus from western cereals to traditional recipes, HUL (CMP: Rs. 1575, MCap: Rs. 3,40,831 crs, FY2020 PE: 46.2x ) is expanding its portfolio of offerings and is poised to benefit from the now growing segment of traditional ready to cook breakfast options. However, they need to address some of the key barriers such as use of preservatives and health concerns around packaged foods that have led to the low consumption of such items in India.
If the strategy works out fine, HUL is expected to benefit positively.