What the Minimalist acquisition means for HUL

One of India’s largest direct-to-consumer (D2C) brand deals points to growing interest from large consumer packaged goods players in small but valuable domestic consumer brands, experts say, especially as premiumization and attracting younger audiences become crucial circumstances Mint.

“This is a solid development for the industry. We expect stronger consolidation in the consumer segment in 2025 as this deal informs onlookers of an emerging consumer segment with a growing user base and significant revenue Brands can be a good acquisition.” Data Intelligence.

Founded in 2020 by Mohit Yadav and Rahul Yadav, Minimalist joins HUL’s acquisition portfolio, which includes regional brands like Indulekha and new-age health and wellness brands like Oziva and Wellbeing Nutrition.

The deal is also in line with the company’s intention to transform its beauty and wellness portfolio into a “high-growth” premium space.

In less than five years, Minimalist has become a major player in India’s skincare space, successfully capitalizing on people’s interest in vitamin C, retinol and alpha arbutin with products such as facial serums, hair oils and sunscreens. and growing affinity for active ingredients. beauty products.

Skin care brands like Minimalist benefit from younger users, especially those who have recently entered the workforce, who are more conscious about the products they put on their skin. “This is the age of the ‘skin care routine’. Everyone has one – some in the morning, some in the evening. Consumers understand the ins and outs of each ingredient and simply won’t settle for inferior products,” says Datum’s Meena.

The top line range is $100 Crores to $Meena added that Rs 300 crore is now the sweet spot for consumer brand acquisitions. “At this point, the brand is likely to have scaled up and has a sizable customer base, so with the distribution network of FMCG (fast-moving consumer goods) brands, it can move forward.”

Minimalist is also one of the few profitable beauty and personal care startups in the country. In 2023-24, its profit after tax doubled to $105 million more than the previous fiscal year, while its revenue surged nearly 90% to $3.5 billion rupees.

Mint It was previously reported that beauty and personal care brands in India have been going through a tough time. Fierce competition is spurring increased spending on research and marketing.

According to data platform Tracxn, total financing for D2C companies fell to $672.5 million in 2024 from $829.5 million in 2023. In 2022, 271 companies invested a total of $1.8 billion.

Quality wins

Over the years, HUL has catered to the beauty and personal care market in India with brands such as Sunsilk, Dove, Lakmé and Fair & Lovely. While Dove, Glow and Lovely sold more than $Brands such as Pond’s and Lakmé have annual sales of over Rs 2,000 crore $1,000-crore annual milestone, according to 2023 figures shared by the company.

Minimalist’s turnover in 2023-24 is $347 crores.

However, to meet the changing consumer demands, HUL has been increasing its share of premium products in the detergent, hair care and skin cleansing categories.

This acquisition will help HUL bridge the premiumization gap in its beauty product portfolio. The brand is essentially aimed at more affluent consumers, unlike mass-market brands such as Pond’s and Glow & Lovely. For example, the price of Minimalist’s Vitamin C Serum $699 for 30ml, salicylic acid is sold at $549 for a 30ml bottle.

“Minimalism, operating in the affluent and above segment at ‘mass’ price points, provides us with an arsenal to enhance our premium segment positioning in beauty and wellness. A segment where HUL’s premium index is lower It’s beauty and happiness; for example, in the home care segment, we are leading in terms of share of premium products,” HUL Chief Financial Officer Ritesh Tiwari said while addressing reporters on Wednesday.

HUL’s beauty and wellness division reports sales $10,258 crore for the nine months ended December 31, 2024. “Our beauty and wellbeing strategy is to create the number one beauty portfolio in the country. The premium within that becomes extremely important,” he said.

In 2024, the company said it would transform its portfolio over the next decade. It plans to focus on its core portfolio of mature, premium “future core” brands and pursue future trends through so-called “market makers.”

The company has identified six “high-growth” segments as long-term bets, including premium facial care, premium hair care and body wash. The company has also increased investment in categories such as serums and sunscreen.

HUL will use its distribution strength to expand the Minimalist, offline and overseas markets dominated by Harman Dhillon.

Meena said Minimalist’s in-house manufacturing capabilities are an advantage as it helps create differentiation in the crowded beauty and personal care space. The company has a manufacturing facility in Jaipur with a daily capacity of 150,000 pieces and an investment of up to $In 2023, another outlet will be opened in Jaipur at a cost of Rs 100 crore.