Unilever’s Indian subsidiary confirmed it has entered into a definitive agreement to acquire local skin care brand Minimalist during its latest financial conference on January 22.
“This marks another step in the transformation journey of our portfolio towards higher growth demand spaces,” said Ritesh Tiwari, Chief Financial Officer, HUL.
As Indian beauty consumers increasingly seek out premium-quality products at accessible prices, the expansion into premium beauty will help HUL stay ahead of the curve in the fast-growing market.
“As Indian consumers are moving from a one product regime to a five, six product regime, it is essential for us to turbocharge our portfolio… This acquisition aligns with our strategic objective of expanding our presence in serums and treatments and sun care in the masstige segment,” said Tiwari.
According to Tiwari, its portfolio of premium beauty was “currently under-index” compared to the rest of the HUL offerings.
The company has previously underscored the significance of premium beauty to the company’s growth.
“The Indian beauty market offers significant headroom to grow. To put in context, the overall FMCG market that HUL plays in is about INR170,000 crore, and of this, beauty is roughly INR68,000 crore
“Within the beauty market, affluent beauty contributes roughly 50% and is growing at twice the pace of rest of the beauty market. In addition, India’s per capita expenditure on beauty is significantly lower versus many other countries. This clearly presents significant headroom for premiumisation,” said Tiwari.
Perfectly aligned
The acquisition of Minimalist underscores HUL’s commitment to “doubling down” to create the “number one portfolio for beauty”, said Twari.
He highlighted that Minimalist was a “good strategic fit” for HUL.
“It’s a great brand built on strong business fundamentals and rooted in product efficacy and consumer love. The business has scaled rapidly to an annual revenue run rate of 500 crores in a short span of four years, while being one of the very few insurgent players that has stayed profitable since inception.”
Furthermore, Minimalist occupies the sweet spot between “beauty and active-led science,” with a clear positioning and masstige pricing.
Tiwari revealed that the company aims to use its extensive reach to expand Minimalist’s physical retail footprint in India.
“Minimalist has a strong online presence. With our wide distribution reach, we are very pleased to bring the brand offline with our curated route to market for beauty in India, our ability to cover a majority of the shops where affluent consumers shop today will increase, making offline expansion a key growth driver.”
At the same time, Minimalist, which is primarily an online brand, can help HUL strengthen its foothold in e-commerce.
Furthermore, the brand could possibly leverage Unilever’s extensive international network to expand to new markets overseas.
“Being part of the Unilever Group, we can leverage Unilever’s global presence to expand the business to the right target consumers and markets,” said Tiwari.
Minimalist’s product offerings will also benefit from Unilever’s research and development capabilities.
“We have strong global R&D capabilities and product technologies, which we will leverage to further bolster the products and portfolio,” he said.
“Given the equity the brand brings… We are confident in our ability to scale this brand to greater heights by leveraging our complimentary capabilities,” said Tiwari.
More acquisition details
Minimalist was founded in 2020 by Mohit Yadav and Rahul Yadav.
According to the announcement, HUL will acquire a 90.5% stake in the business at a pre-money enterprise value of INR2,955cr (USD341.8m).
The remaining 9.5% will be acquired from the founders within two years, said the firm.
The deal is expected to close mid-2025.