Hindustan Unilever Limited: Annapurna Salt

Many people in developing countries suffer from an iodine deficiency, which can lead to diseases such as goiter. Salt is an excellent carrier of iodine, which can be added to salt very inexpensively, although some is inevitably lost in the process of storage, transportation, and cooking. In an effort to solve this problem, Hindustan Unilever Limited (HUL), the Indian subsidiary of Unilever, has developed a proprietary microencapsulation technology to stabilize the iodine content in salt, and it markets this stabilized salt to the poor under the brand name Annapurna.27

Unfortunately, the penetration of Annapurna salt among the poor is miniscule at best. The branded-salt market in India accounts for only 20 to 30 percent of the total market; the rest of the market is served by the unorganized sector.28 Within the branded sector, Annapurna is the second largest, with a market share of 35 percent, which translates to a 7 to 10 percent share of the total market for salt. Annapurna salt is priced at Rs. 7.5/kg, the same as the market leader Tata salt, whereas the small regional producers sell iodized salt at Rs. 2/kg.29 The BOP proposition is adamant about selling high-quality products at a low price to the poor; yet, Annapurna sells its salt at a price premium of 275 percent! Annapurna may be a profitable business, with a good product employing a valuable technological innovation, but it is not a BOP success story. R. Gopalakrishnan, former vice president of HUL, states that the “illustration ofAnnapurna salt as co-creating a market around the needs of the poor [was] misplaced.”30

 
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