Hindustan Unilever Limited (HUL) announced that it is making investments in Zywie Ventures, which sells the plant-based supplement brand Oziva, and Nutritionalab, which owns nutritional products under the Wellbeing brand, in order to enter the health and wellness market, which is estimated to be worth Rs 30,000 crore.
Its plan is to make two purchases, the first of which would cover 51.00% of the shareholdings and the second of which would cover the remaining 49.00%.
HUL will purchase a 51% ownership investment in Oziva for Rs264 crore in the first tranche, and the remaining 49% will be purchased for an unspecified pre-agreed valuation at the end of the three-year period. In addition, for around Rs 70 crore, HUL would purchase a 19.8% equity holding in Wellbeing Nutrition.
Hindustan Unilever Limited’s Chief executive and Managing Director, Sanjiv Mehta said that their entry into the quickly expanding health & wellbeing sector is made possible by these strategic investments. They align with their goal of enhancing consumer health and wellbeing and empowering individuals to take control of their own health through dependable solutions.
He said that OZiva and Wellbeing Nutrition are now part of the HUL family and their portfolio of purpose-driven brands and they are delighted. He added that he firmly believe that with their R&D, market development, and distribution skills as well as Unilever’s extensive global health and wellbeing knowledge, HUL is well-positioned to support the ongoing scaling up of these companies.
Hindustan Unilever Limited has a successful track record of establishing categories through market development, stated Ritesh Tiwari, CFO of HUL
Hindustan Unilever Limited has a successful track record of establishing categories through market development, stated Ritesh Tiwari, CFO of HUL. He added that they are eager to collaborate with the OZiva and Wellbeing Nutrition creators to help the companies grow by utilising their complimentary skills and abilities.
OZiva’s founders, Aarti Gill and Mihir Gadani, said that they are glad to work in partnership with HUL to achieve their goal of using OZiva to enable people to live better and healthier lives. They have developed an innovative portfolio over the past few years that has improved the lives of millions of consumers. As a next step in this journey, they believe that with HUL’s strong capabilities in category development and distribution and OZiva’s focus on innovation in the health and wellbeing space, they can jointly create a stronger purpose-led brand that brings them closer to their vision and touches more lives around the world.
Subject to customary closing conditions, both of these transactions will close within the next one to three months.
While Hindustan Unilever Limited will be represented on the board, the current teams from both brands will continue to run all aspects of the company.
While Hindustan Unilever Limited will be represented on the board, the current teams from both brands will continue to run all aspects of the company. The deal marks the beginning of a process that could lead to a wave of brand market consolidation for direct-to-consumer (D2C) brands.
Hindustan Unilever Limited, Marico and ITC, have made investments in direct-to-consumer (D2C) brands that grew rapidly during the pandemic when online businesses experienced a sharp increase. In May, Marico acquired a 54% share in HW Wellness Solutions, the owner of the True Elements brand of healthy breakfast and snacks.
It may be noted that the producer of the Soulfull brand of morning cereals and millet-based snacks, Kottaram Agro Foods, was acquired by Tata Consumer last year for a full ownership share.
According to the Plant Based Foods Industry Association, the market for plant-based foods is still relatively new in India and is assumed to be worth around Rs 2,000 crore. Over 250 startups have entered the market in recent years.
The functional food category has seen the most market entry from mainstream fast-moving consumer goods corporations.
According to market research company Euromonitor, the Indian nutraceuticals industry is presently valued at Rs 47,000 crore, with dietary supplements accounting for a quarter of the market and fortified and functional food items making up half of the segment.
The functional food category has seen the most market entry from mainstream fast-moving consumer goods corporations. Through Horlicks, HUL had previously stated that it will increase its focus on the nutritional and high-protein segments, while Marico had already introduced protein drinks under the Saffola Fittify brand a few years ago.
Globally, over the past three years, Unilever has completed a number of acquisitions in the health and wellness sector, including those of Liquid I.V., Onnit, a holistic wellness and lifestyle company, Nutrafol, a hair wellness brand, OLLY Nutrition and the supplement companies SmartyPants Vitamins.
edited and proofread by nikita sharma