FMCG giant Hindustan Unilever recently purchased a 90.5% stake in beauty and skincare startup Minimalist. The company is aiming for a 900bps portfolio shift towards ‘Premium’ in the Beauty & Wellbeing segment. In a recent earnings call, Chief Financial Officer Ritesh Tiwari said that the surf-to-cosmetics conglomerate is under-indexed in the premium beauty and wellbeing segment. “We want to achieve over the next few years is 900 bps improvement of portfolio shift towards premium”, he added, “Minimalist acquisition makes a big step in that direction”.
HUL acquired a 90.5% stake in Uprising Science Pvt Ltd — the firm behind Minimalist for Rs 2,955 crore through secondary buyouts and primary infusion. The remaining 9.5% will be acquired by the FMCG giant from the founders within two years.
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Explaining the successful acquisition of Minimalist, Tiwari said that the Jaipur-based startup sits at a masstige price point with a very strong play online. It also operates in derma/ active-led space, and half of the business of the overall category in the market sits with the consumer cohort of affluent and affluent plus.
Minimalist has become a Rs 500 crore annual run rate business and has been profitable since its launch in 2020. In FY 24, it doubled its profit to Rs 10.5 crore from the previous fiscal, and its revenue shot up nearly 90 percent to Rs 350 crore.
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HUL said in Q3 earnings that it will be deploying its global R&D capability and technology to Minimalist. The FMCG giant will leverage its offline presence to take the brands to more premium stores across the country. “We’ll be able to create more value by working with team Minimalist and bringing capabilities of both the teams together and then create a bigger brand compared to what it is today and make the business model stronger when compared to today,” Tiwari noted.
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On future acquisitions, Tiwari said HUL will continue to do bolt-on acquisitions as it gets the “right target”. The company recently acquired a 51 percent stake in Oziva in 2022 and Indulekha in 2016 for Rs 330 crore. “When we come across a business, which we believe is a fabulous fit and we can A -, we can add value and we can create more synergies, we will go ahead with it. We are very selective about it,” Tiwari said.