HUL (Hindustan Unilever Ltd) in a move to accelerate and expand its business in rapidly growing lifestyle and science driven consumer markets has acquired two startups.
The move is line with Hindustan Unilever’s “strategic priority” of entering fast-growing demand spaces. Holistic health and wellness are emerging as “mega consumer trends” in India
The company has made strategic investment in two digital-first health and wellness businesses to access Indian market, which is predicted to reach 30,000 crore over the next five years.
The company in a regulatory filing stated it has acquired stakes in Zywie Ventures Pvt. Ltd, the maker of OZiva brand of lifestyle protein products, hair and beauty supplements; and Nutritionalab Pvt. Ltd that sells products under the Wellbeing Nutrition brand.
HUL invested 334 crore in the two transactions. While HUL will be represented on their boards, the current leadership of both businesses will continue to run their operations.
In a regulatory filing on Thursday, HUL said it has picked up 51% in Zywie for ₹264.28 crore in the first tranche. The balance 49% stake will be acquired after three years from the completion of the first tranche on pre-agreed valuation criteria. OZiva is endorsed by Bollywood actor Deepika Padukone. The OZiva team is currently led by Aarti Gill and Mihir Gadani.
Startup Acquisition is in line with the company’s strategic Priority – HUL
Hindustan Unilever has also bought a 19.8% stake for ₹70 crore in Nutritionalab, which makes oral thin strips, slow release capsules and marine collagen powder. The stake was bought through a mix of primary infusion and secondary buyouts for ₹70 crore in cash. Nutritionalab posted revenue of ₹19.40 crore in FY22. The company is led by Avnish Chhabria.
Both transactions are expected to be completed in the next one to three months, HUL said.
The move is line with Hindustan Unilever’s “strategic priority” of entering fast-growing demand spaces. Holistic health and wellness are emerging as “mega consumer trends” in India, Ritesh Tiwari, chief financial officer, HUL, said in a analyst call.
Sanjiv Mehta, CEO and Managing Director, HUL said: “We are delighted to welcome OZiva and Wellbeing Nutrition to the HUL family and our portfolio of purpose-led brands. These strategic investments give us an entry into the fast-growing Health & Wellbeing category. They align strongly with our mission to improve the health and wellbeing of consumers and empower people to take charge of their health through solutions that they can trust. I strongly believe that HUL is well-positioned to support further scale-up of these businesses through our R&D, Market Development, Distribution capabilities and Unilever’s global Health & Wellbeing expertise.”
According to the company’s investor presentation, it seeks to develop a portfolio of rapidly expanding, lifestyle-driven, science-driven brands in the health and wellbeing sector. HUL has three business segments: food and beverages, home care, and beauty and personal care (BPC). These new items can fall within HUL’s category for cosmetics and personal care.
Aarti Gill & Mihir Gadani, Founders of OZiva said: “We are glad to partner with HUL to achieve our vision of empowering people to live better and healthier with OZiva. Over the last few years, we have created an innovative portfolio that has helped millions of consumers live a better life. As the next step in this journey, with OZiva’s focus on innovation in the space of health & wellbeing and HUL’s strong capabilities in category development and distribution, we believe we can together create a stronger purpose led brand that brings us closer to our vision and touch more lives around the world.”
Avnish Chhabria, Founder & CEO, Wellbeing Nutrition said: “We are very excited to welcome onboard Hindustan Unilever as a strategic investor. Wellbeing Nutrition has been on a mission to make clean nutrition accessible to consumers all over the world on the back of innovative products, such as Melts (Oral Thin Strips) and Slow (2-in-1 capsule technology) formulated using high-quality and globally-sourced natural ingredients. We believe this partnership will help scale Wellbeing Nutrition by leveraging HUL’s reach and capabilities and become a lifestyle wellness brand of choice.”