Hindustan Lever Ltd is rationalising its food brands by phasing out economy tea brand A1. In the coffee business, the company will merge Deluxe Green Label brand with Bru Roast & Ground.
The company will be have two tea brands, Brooke Bond and Lipton, while the coffee business will be consolidated under the Bru brand. Under the Brooke Bond umbrella brand, HLL sells Taj Mahal, Red Label, 3 Roses and Taaza.
Chairman M S Banga said, "We have completed the power brand strategy in home and personal care business. The portfolio rationalisation in foods will be completed in six months."
D Sundaram, director-finance, said "We are not concentrating on the A1 tea brand. Discontinuation of the brand would only impact top line and not the bottom line."
According to the company, the Brooke Brand umbrella brand grew by 20 per cent for June quarter. Sales of Lipton ice tea doubled because of increased out of home consumption.
On the atta business, the company will be focusing on select locations in the south. The mushrooming of malls in the country throws an opportunity to grow its Lipton ice tea and the ice-cream business.
HLL is not satisfied with the sales of its new initiative-confectionery. Banga said, "The company is revamping the distribution system for its low-value products including confectionery. It will set up a distribution network through 1 million pan and beedi shops to widen its reach."
The foods business declined by 10 per cent to Rs 385.88 crore (Rs 3.858 billion) from Rs 428.56 crore (Rs 4.285 billion) for the second quarter of the current financial year.
Sales of beverages sales declined by 6.2 per cent to Rs 269.54 crore (Rs 2.695 billion), processed foods by 15.1 per cent to Rs 82.23 crore (Rs 822.3 million) and ice cream sales by 3.2 per cent to Rs 35.09 crore (Rs 350.9 million).
