"We are determined to showcase that there can never be a trade-off between purpose and performance,” said Nitin Paranjpe, chairman, of Hindustan Unilever Limited (HUL), while addressing shareholders at the Company's 89th Annual General Meeting.
Paranjpe took to a networking platform later to say that it was an honour and a privilege to chair this AGM of the company, an institution he joined in 1987 as a management trainee.
He said, "Between then and now, I have not only witnessed how HUL has been an integral part of India's growth story, I have also seen the company grow by around 63x. Our turnover in the year I joined was around Rs 800 crore. Today, it is more than Rs 50,000 crore. Massive isn't it?!"
The speech - ‘Serving India, Today and Tomorrow’
In his first AGM speech he went on to say, "With more than 9 out of 10 Indian households using one or more of HUL brands, HUL has the power to impact the lives of consumers. The Company’s brands strive to bring about positive social change and break barriers to help build a more inclusive society through thoughtful marketing campaigns."
He added that through several initiatives, the company has been addressing challenges like water scarcity, livelihood opportunities, employability, health and sanitation among others.
In the speech titled ‘Serving India, Today and Tomorrow’, Paranjpe, whose last role was global COO and chief transformation and chief people’s officer of Unilever, said that HUL has been an integral part of India’s growth story. He said that the company "has always believed that what is good for India is good for the company."
Sharing a glimpse of HUL’s future-fit strategy, he said they believe that purpose-driven brands and business can indeed deliver sustainable growth and it has been further strengthened over the years.
He mentioned that the company crossed the Rs 50,000 crore turnover mark and over the last decade, HUL has more than doubled its turnover, tripled the EBITDA and quadrupled the market cap.
Paranjpe spotlighted the company's strategy to make sustainable living commonplace. "At HUL we are embedding sustainability across the value chain and beyond through what we call the ‘Compass’; our strategy to make sustainable living commonplace. We believe that Compass will help us deliver superior performance and drive sustainable and responsible growth. We are building technology muscle to serve our customers and consumers even better."
He added, "We are determined to showcase that there can never be a trade-off between purpose and performance.”
The polarisation of purpose
HUL and Unilever have been driving the agenda on purpose-driven brands and businesses, sometimes in the face of stiff criticism.
In January this year, Terry Smith, the founder, and CEO of the London-headquartered Fundsmith Equity Fund, claimed that Unilever’s fixation on brand purpose and sustainability had led to the FMCG juggernaut's underwhelming performance last year.
In Smith's annual letter to investors in the fund, he wrote “Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business."
He wrote that the "most obvious manifestation of this is the public spat it has become embroiled in over the refusal to supply Ben & Jerry’s ice cream in the West Bank." Furthermore, he said that there were "far more ludicrous examples which illustrate the problem" and that Unilever had "lost the plot".
“A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot. The Hellmann’s brand has existed since 1913, so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches).”Smith said, however, that the fund would continue to hold shares in the business “because we think that its strong brands and distribution will triumph in the end.”