How Surf Excel beat Ariel, Ghadi Detergent to become a billion-dollar brand

Surf Excel - the popular detergent brand from the market leader Hindustan Unilever (HUL) - has turned into a $1 billion brand by annual sales. According to the Mumbai-based local subsidiary of the Anglo-Dutch fast moving consumer goods (FMCG) giant Unilever, the brand clocked Rs 8,200 crore in sales during the calendar year 2022 - making it HUL’s first billion-dollar brand.

The tumultuous journey

While Surf Excel has been dominating the local market for years, its journey to the feat has not been smooth. It is the fruits of playing nimble for decades and masterfully fending off severe challenges again and again.

Originally introduced as Surf by Unilever in the late-1950s, the now iconic brand was targeted towards the housewives from middle-income households in the developed markets like in the US and Europe. In India, from its inception, Surf was a premium brand though - at a time, when majority of the housewives were used to cheaper bar soaps. The greatest threat, however, came from elsewhere, in a different form. Nirma - a humble small-scale brand from Gujarat - severely shook the boat.

When Karsanbhai Patel, a chemist, launched Nirma at 75 per cent discount compared to competing products from multinationals like HUL (then Hindustan lever Ltd.) in 1970s, it quickly emerged as a major challenger. By 1980s, Nirma toppled all other brands, including that of HLL’s, to become the largest detergent brand in India.

Surf Excel faced such challenges multiple times in its long journey. Be it Ariel from rival Procter & Gamble (P&G) in 1990s or another local player Ghadi Detergent in 2015, Surf Excel have had to concede its supremacy for a period to new competition - only to emerge stronger and reclaiming the top spot.

Recent factors that boosted its fortunes

Apart from the HUL management’s agility in dealing with any new threats by identifying the issues and coming up with new solutions, a couple of recent factors that have played a crucial role in Surf Excel’s greater sales. Inflation and premiumisation.

HUL has increased prices of its Surf Excel products a number of time, together by double digit percentage points since late-2021, boosting its overall revenue. While, HUL’s constant push for premiumisation of its washing products like Surf Excel detergents have also helped its topline.

Sanjiv Mehta, MD & CEO, HUL, told Business Today earlier that the company is aiming to constantly premiumise its portfolio - especially in the fabric wash products category. “We are now significantly over-indexed to the market in terms of premiumization,” Mehta recently said in a post-earnings call this month.

“Our premium products be it liquids, be it premium powders have grown pretty well. And the total portion of our business in the portfolio now is over indexed to liquids and premium part of the portfolio compared to mass part of the portfolio,” said Ritesh Tiwari, Chief Financial Officer, HUL, during the call. Adding HUL’s product mix “keeps improving the way we drive market development for driving premiumisation”.

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