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Hindustan Unilever Limited (HUL) : Initiatives to encourage Sustainable Agriculture

December 14, 2020

About HUL

Hindustan Unilever Limited (HUL) is the Indian subsidiary of Unilever, a British-Dutch multinational company. Hindustan Lever was formed in 1956 by the merger of Hindustan Vanaspati Manufacturing Company, Lever Brothers India Ltd and United Traders Ltd. Hindustan Unilever’s portfolio has 35 product brands in 20 categories across foods, beverages, cleaning agents, personal care products, water purifiers and Fast-moving consumer goods. HUL is the market leader in Indian consumer products with presence in over 20 consumer categories with over 700 million Indian consumers using its products.

Sustainable Agriculture practices in HUL

HUL is a strong advocate of the need to better integrate industry and agriculture, to reduce wastage in the food chain, improve rural incomes and create employment opportunities. The company is dependent on the agricultural sector for much of its raw material requirements in its Foods & Beverages operations and also in its Home & Personal Care business. The company has successfully equipped its sourcing partners with the latest technology, shared and updated best practices and invested intensively in food processing.

The success of their efforts is evident from the increased yield. The average yield of tea at the company’s plantations grew from 900 kg per hectare in the 1960s to over 2,500 kg per hectare in 2015. Their tomato extension programme in Punjab increased the yield per acre from 8 tonnes 10 years ago to 20 tonnes today. In Animal Feeding Stuffs HUL is the country’s largest seller of branded animal feeds; their Innovation Centre in this business has developed poultry feeds which give a high conversion efficiency.

HUL became the first company to get into Public Private Partnership (PPP) with the Maharashtra Government to source tomatoes sustainably in 2012.  These projects were undertaken in partnership with Varun Agro which was tasked with establishing tomato and fruit processing plants and collecting the harvest from farmers. Farmers were provided with the high yield variety of seeds at subsidized prices and training sessions were organised to familiarise them with the best practices. Buy- back guarantee was also provided to the farmers under this agreement.

With the execution of good agricultural practices and adoption of drip irrigation systems farmers would make significant savings in water, labour, pesticide and fertiliser, limiting any negative impact on the environment. Sustainable farming would eventually lead to increased yields and a better return for the farmer.

HUL is prudent enough to make right investments through encouraging sustainable agricultural practices. By 2011, 60% of tomatoes used in Kissan ketchup in India were from Sustainable Sources and HUL aims to increase it to 100% by 2020. Sustainable sourcing would help to manage a core business risk by ensuring security of good quality supply for the long term. It would also contribute to better incomes and livelihoods for farmers and their workers. It would also help to maintain soil fertility, improve water quality, reduce greenhouse gas emissions and protect biodiversity.

FocusAgritech’s Outlook: HUL acknowledges the fact that rural India is an indispensable part of India’s growth story. It is not only the source of raw material for their core businesses but also the source of future demand growth of their products. Their prosperity is congruent with rural prosperity. To achieve the objective of a healthier triple bottom line, Agriculture is the right place to invest and innovate. HUL’s success story for sustainable practices should be a guiding light for other FMCGs and together we should move towards sustainable farming practices to preserve natural resources and make a better India for future generations.

Companies to watch: Bayer CropSciences, Syngenta Foundation India (SFI), Varun Agro

Keywords: sustainable agriculture, HUL, FMCG, soil fertility, best practices, sustainable sourcing

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