Low intensity and delayed onset of winter resulted in a year-on-year decline in the skincare product portfolio for Fast-Moving Consumer Goods (FMCG) companies in Q3.
Companies that reported their results for the December-ending quarter pointed out that extreme weather fluctuations posed a risk to the business environment.
“The winter portfolio typically constitutes 1/3 of the Skin Care category. This portfolio declined year-on-year on account of delayed onset and lower intensity of winter,” said Rohit Jawa, Managing Director & CEO of Hindustan Unilever Limited (HUL) during the earnings call.
However, the FMCG maker reported growth in its non-winter skincare and premium product portfolio.
“We have a winter portfolio, which is roughly 30 percentage of Skin Care. In the quarter, we have seen the winter portfolio decline. We saw the non-winter portfolio growing in mid-single-digit volume. Premium Skin Care growing and having a momentum of double digits. This cut is pan-urban and rural put together, we did not see any different signals as far as the winter portfolio is concerned in rural areas. The reality is that the mass skin and winter price point packs are over-indexed in rural areas,” said Ritesh Tiwari, Chief Financial Officer, Hindustan Unilever Limited (HUL) in the earnings call.
ITC Limited which has Engage, Vivel, and Fiama Savlon under its personal care segment mentioned ‘geo-political and climate dynamics pose downside risks’ in its December quarter result update.
“Geopolitical tensions and climate emergencies have led to concerns on food security and food inflation; trade restrictions imposed by the government on agri commodities limit business opportunities for the segment,” mentioned ITC.
businessline had earlier reported that FMCG companies have started to see a demand dip in their winter product portfolio.
Beverage demand
During the quarter, FMCG companies registered muted growth in the beverages category with a downgrade in consumers. The category also saw the impact of weather changes.
“The beverage business saw muted growth during the quarter on account of unseasonal rains, which particularly impacted North and West India. Unseasonal rains dampened the beverage portfolio. The food business under the homemade brand performed exceedingly well with a growth of 35 per cent,” said Mohit Malhotra, Chief Executive Officer of Dabur in the company’s earnings call.