Good morning [%first_name |Dear Reader%],

As India’s largest FMCG company, Hindustan Unilever Ltd (HUL) is a good proxy for India’s consumption habits. Which is why its numbers usually make for interesting reading.

Take, for instance, the company’s presentations at its recent analyst meet—the first physical one in three years. I say presentations because there were five. One each by its chief executive and chief financial officer, and one each on its three verticals: personal care, home care, and foods.

The idea was to show off HUL’s journey over the past decade or so, and it’s undoubtedly been quite an impressive journey. Nothing illustrates that better than this snapshot:

Now, HUL sells everything from tea (Brooke Bond) and coffee (Bru) to soaps (Lux, Lifebuoy) and cosmetics (Lakmé). But what stands out for me is how this period of growth was defined by one factor in particular:

The stellar rise of HUL’s laundry-detergent brands—Surf Excel, Wheel, Rin.

And why we are still only at the start of that story.

Hindustan Unilever’s detergent-powered decade

Home care is not HUL’s biggest vertical; it accounts for under one-third of its overall sales. But it has certainly been the company’s biggest revenue and profit driver in recent years.

The division saw its revenue jump 2.6X between the years ended March 2012 and March 2022, compared to a 1.8X rise for personal care. The difference is even starker in terms of their bottom lines. Home care’s profits vaulted 7.3X in the same period, while those of personal care expanded only 2.2X. (HUL didn’t disclose comparable numbers for foods.)

This could be partly because this space is not as competitive as personal care, and HUL and Procter & Gamble already control two-thirds of the market, according to brokerage Phillip Capital.

Anyway, anchoring HUL’s personal-care business—which also includes dishwashing products, surface cleaners, and water purifiers—are laundry detergents and fabric conditioners. In fact, Surf Excel is set to become HUL’s first US$1-billion brand in India.

While the fact that HUL has been able to sell more and more of these products reflects in the division’s revenue growth, the answer to the profit surge can be found in this chart:

Taking the share of premium-laundry products from less than a third of the home care division’s volumes to more than half in just a decade is a significant feat. The premiumisation in detergents has been vital to HUL’s growth, as we wrote in a story on HUL rival Godrej Consumer Products in August 2020: