The timing couldn’t have been better. Nearly three years after acquiring personal care brand Brylcreem from American consumer products major Sara Lee, Anglo-Dutch giant Unilever announced last week that it was terminating the brand licence agreement with Godrej Consumer (GCPL).
The announcement came roughly six months prior to the expiry of the five-year lock-in enjoyed by GCPL through its licensing deal with erstwhile owner Sara Lee. This deal had given the Godrej group the rights to manufacture, market and distribute Brylcreem along with two other brands — Ambipur and Kiwi in India and Sri Lanka. Following the sale of Sara Lee’s personal care portfolio to Unilever in 2009, the question had arose whether Unilever would terminate the agreement entered into by Sara Lee and GCPL, to be in full control of the business.
It has now finally taken the step, and even announced that its Indian subsidiary, Hindustan Unilever, would manufacture, market and distribute the brand in the country, effective March 31, 2012.
| LOOKING GOOD |
| * Men's hair care market in India: Rs 300 crore |
| * Rate of growth: 30 per cent per annum |
| *Key players: Brylcreem, Set Wet, Gatsby |
| * Turnover of Brylcreem: Rs 20-Rs 25 crore |
What then does this mean for HUL?
The company has said that it plans to integrate the Brylcreem business with its personal care portfolio and further grow the brand’s franchise. “Brylcreem has a long-standing history and is the leading male styling product in the country,” the company says.
More importantly the move comes at a time when HUL is looking to get a better handle on the male grooming market, a growing segment in India. By industry estimates, the male grooming category including pre- and post- shaving products, men’s toiletries, skin care and hair care products is close to Rs 3,000 crore in size.
More From This Section
Of this, hair care, roughly Rs 300 crore in size, is growing at a compounded annual growth rate of 30 per cent.
The key players include Brylcreem, Set Wet gel from Paras (acquired by Reckitt Benckiser now) and an imported product called Gatsby from Japan.
While HUL has a presence in men’s toiletries (with Axe deodorant, Rexona Men) and skincare (Vaseline Men, Fair & Lovely Menz Active), it does not have a foothold in hair care at all. With Brylcreem, HUL will step into the men’s hair care market taking on chiefly Reckitt’s Set Wet, which has established itself as a strong brand with the youth.
“If you have to make any dent in the marketplace, especially, in a category such as hair styling, then speaking to the youth is a must,” says Anand Ramanathan, associate director, KPMG.
Brylcreem with its legacy - it’s an 82-year-old brand first manufactured and sold in the UK - has greater recall with consumers of at least 40 years and above. In India, the brand, which has been around for about 25-30 years, has been marketed by a number of players including GSK, its original owner, and TTK, with whom the successive owner Sara Lee first had a joint venture in the 1990s and then a sales & distribution agreement between 2000 and 2005. While Sara Lee had a 51:49 joint venture with the Godrej Group since 1995, the brands were included in the JV about six to seven years ago only.
GCPL, according to its managing director A Mahendran, did grow the brand during the tenure of its licensing deal. While Brylcreem alongwith Kiwi and Ambipur constituted about 15-20 per cent of the JV’s overall sales, industry sources say GCPL was instrumental in pushing the gels portfolio of Brylcreem, introducing a number of innovations such as a hybrid gel, which combines properties of a wet-look gel and ultra-strong gel, in a bid to win younger consumers over.
HUL is likely to take this strategy forward given that gels as a hair care segment is doing far better than creams. HUL is also likely to ramp up Brylcreem’s turnover (current sales estimated to be Rs 20-Rs 25 crore) to make it a brand of consequence within its portfolio.
Internationally, Unilever has positioned Brylcreem, which is marketed mainly in Europe and North America apart from India, as a hair styling product of substance with a wide range of options from gels to creams, waxes, pastes etc. The marketing giant, in keeping with the brand’s endorsement legacy, has appointed cricketer Kevin Pietersen as a Brylcreem Boy.