Hindustan Unilever Ltd. (HUL), India’s largest consumer goods company, has announced a significant reduction in the use of palm oil and its derivatives in its soaps by 25%. This change aims to manage volatile commodity prices and lessen environmental impact. HUL is the first company globally to make this move, and its parent company, Unilever, plans to implement this technology in other countries, with India being one of the largest soap markets.
Stratos Formula
The new formula, called Stratos, took HUL almost five years to develop. It will replace palm oil with a proprietary blend of plant-derived polysaccharides, vitamin mixes, and natural fatty acids. This innovation will enhance the quality of the soap while reducing palm oil content by a fourth in high-grade soaps. HUL, which leads the Indian soap market with a 38% share of the ₹24,000 crore market, aims to make its products superior while cutting costs.
Benefits of Reducing Palm Oil
“Using less palm oil allows us to save a significant amount of money, which we can reinvest in other ingredients to improve our products,” said Ankush Wadehra, Vice President of Skin Cleansing at HUL.
Reducing the total fatty matter (TFM) in soaps helps HUL manage fluctuating commodity prices, which often dictate product pricing. Palm oil and its derivatives are some of the most volatile inputs, making up over 20% of the costs for consumer companies like HUL.
In India, soap quality has traditionally been measured by the total amount of oils and fats used, referred to as TFM. However, HUL clarified that soap performance is more about the type of fatty matter used rather than the total amount. “We have optimized the formula to deliver real benefits to consumers,” said Vibhav Sanzgiri, Executive Director of R&D at HUL.
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