HUL, Godrej Consumer Hike Soap Prices As Raw Materials Turn Costlier
India’s two leading soap makers hiked prices for the second time in a year as raw material costs rose.
Hindustan Unilever Ltd. went in for a blended price hike—or an increase across its range of stock-keeping units—of 3% in December, while Godrej Consumer Products Ltd. did so by 5% in October, two pan-India distributors told BloombergQuint on the condition of anonymity out of business concerns.
Prices of palm fatty acid distillate—a key raw material in soap making—rose nearly 47% over the last year to $880 per tonne, according to Bloomberg data.
The last time the companies increased soap prices was in January 2020, when they informed investors that the quantum of the hike would range between 5% and 6%. HUL didn’t respond to BloombergQuint’s emailed queries citing silent period ahead of earnings for the quarter ended December.
In the quarter ended September, sales of HUL’s beauty and personal care segment had fallen 0.6% year-on-year while Godrej Consumer’s soap sales increased 18%.
The maker of Lifebuoy soaps has the largest market share of 36%, according to a recent report by Phillip Capital on the soaps segment, followed by Godrej Consumer’s 12%.
HUL’s key soap brands Lifebuoy, Lux, Dove and Pears command a major share, but have taken a hit of late because of the trend of moving towards natural products and aggressive selling by other large and regional incumbents.
Wipro Ltd.’s Santoor and Patanjali Ayurved are the biggest beneficiaries of the migration towards natural products in the soap industry, the report said.