Sales: $40.2 billion

Key Personnel: Hein Schumacher, chief executive officer; Graeme Pitkethly, chief financial officer; Conny Braams, chief digital & commercial officer; Reginaldo Ecclissato, chief business operations and supply chain officer; Fernando Fernandez, business group president, beauty & wellbeing; Fabian Garcia, business group president, personal care; Rohit Jawa, president, Unilever, South Asia and CEO designate and whole-time director, Hindustan Unilever; Sanjiv Mehta, president, Unilever, South Asia and chair and managing director, Hindustan Unilever; Nitin Paranjpe, chief people and transformation officer; Richard Slater, chief research & development officer; Peter ter Kulve, business group president, home care; Maria Varsellona, chief legal officer and group secretary

Major Products: Beauty & Personal Care—Axe, Dove, Lifebuoy, Rexona, Sunsilk and Vaseline; Home Care—Cif, Comfort, Domestos, Omo and Seventh Generation

New Products: Axe—Fine Fragrance Collection; Dove—Dove Body Wash featuring 24-hour Renewing Micro-Moisture, Dove Hair Therapy; Lifebuoy—Dishwash liquid (Indonesia); Degree—Advanced 72H; Vaseline—Vaseline Intensive Care lotions with Ultra-Hydrating Lipids, Vaseline Gluta-Hya; Cif—EcoRefill, Seventh Generation—EasyDose Ultra Concentrated Laundry Detergent, Foaming Dish Spray, Domestos—Power Foam. Acquisition: Nutrafol

Comments: Corporate sales rose nearly 15% to $63.1 billion. Unilever boasts 14 billion-euro brands that accounted for 53% of group turnover in 2022. In personal care, these brands include Dove, Rexona, Lux, Lifebuoy, Sunsilk and Axe. Home care billion-euro brands are Omo, Comfort and Sunlight.

By segment, beauty and wellbeing sales rose 20.8% to €12.3 billion. The business accounted for 20% of corporate sales and 24% of its underlying profit. Unilever said hair and skin care categories rose on price increases, which were partially offset by a modest decline in volume. Key brands in the segment include Dove, Vaseline, Sunsilk, Clear, Tresemmé, Pond’s and Glow & Lovely. Together they account for half of beauty and wellbeing turnover.

Meanwhile, prestige beauty sales rose double-digits to €1.2 billion on gains in the US. According to Unilever, the skin care and color cosmetics portfolio in the US has been growing at twice the market rate. E-commerce accounted for about half of prestige beauty sales. In China, prestige beauty sales are surging—so much so, that China is now Unilever’s No. 3 prestige beauty market. During the year, Unilever acquired Nutrafol.

Personal care sales rose nearly 16% to €13.6 billion. Skin cleansing grew high single-digits on higher prices, partially offset by volume declines. Deo sales rose double digits on robust pricing. Oral care grew high single-digit driven by pricing.

Home care sales jumped more than 17% to €12.4 billion. Fabric cleaning sales posted double-digit gains, driven by pricing that was slightly offset by volume declines. Fabric enhancer sales grew high single-digit, led by price with some volume decline. Home and hygiene sales grow by low single-digits, as higher pricing was offset by a decline in volume.

For Q1 2023, sales rose 7% to €14.8 billion. Unilever said growth was broad-based across all business groups and geographies. With an increase in sales of 12.1%, those billion-euro brands continued to outperform the overall portfolio. Leading the way were Omo, Rexona and Lux.

Unilever continues to pare its lineup; it sold Suave in North America to Yellow Wood Partners (No. 44 in The Top 50). Suave was once the No. 1 hair care brand in the US.

By segment, Unilever’s beauty and wellbeing sales rose 7%, personal care sales increased 13.3% and home care sales jumped 8.6%. Beauty & wellbeing gains were helped by another quarter of double-digit growth in prestige beauty and health and wellbeing sales. Together, they accounted for 5% of group turnover. Hair care grew across all regions, helped by the continued rollout of the Sunsilk relaunch. Tresemmé sales posted good gains, too. In China, consumers snapped up new Clear Anti Hair Fall. Core skin care sales posted mid-single digit gains due to strong performances in South Asia and South East Asia. But they were partially offset by declines in North Asia. Vaseline and Pond’s delivered double-digit growth, too.

Gains within the personal care business came from strong pipeline refill in deodorants. Leading the way was Rexona and Axe; the latter launched a fine fragrance range which combines odor protection with fine fragrances and freshness. In fact, the launch contributed to Axe’s double-digit sales increase. Skin cleansing grew high single digits, driven by gains in Latin America and South Asia. Lux grew double digits, helped by the continued success of its bar relaunch. In the US, Unilever launched Dove 24-hour Renewing Micromoisture body wash. Oral care sales were up, helped by big gains for Close Up in South Asia and Africa.

Home care suffered a volume decline of 2.8%, due primarily to lower volumes in home and hygiene and air wellness. Still, sales rose 8.6% for the period. Fabric care grew double-digit with capsules and liquids performing well. Fabric enhancers grew high single-digits. Comfort grew strongly in Latin America and Turkey. Home and hygiene grew mid single-digit, with double-digit price partially offset by negative volume. Domestos grew double-digits.

On July 1, Hein Schumacher took over as chief executive officer. He replaced Alan Jope, who retired.

Prior to joining Unilever, Schumacher was CEO of Royal FrieslandCampina, a global dairy and nutrition business with sales in excess of $11 billion. During his tenure, Schumacher delivered significant portfolio and organization change as part of transforming it into a more focused, growth-driven and sustainable business, according to Unilever.

Prior to joining Royal FrieslandCampina as CFO in 2014, Schumacher worked for H.J. Heinz for more than a decade—during a time of significant change at the company—across the US, Europe and Asia. In his last four years at Heinz, Schumacher was based in China, where he led a turnaround of the Asia Pacific zone. Schumacher began his career in finance at Unilever, before joining Royal Ahold NV.

For the year, Unilever said it expects underlying sales growth of 3-5%.

Bright Lights, Big City. Dove Men+Care lights up Times Square in New York City.

Seventh Generation recognized the power of plant-based ingredients decades ago.

Sales: $38.4 billion for household and personal products

Corporate sales rose 4.5% last year to $62.1 billion. All three businesses—food, beauty and home care—posted gains. Like many other multinationals, Unilever is focused on winning in the largest markets with its biggest brands. The US, India and China, which accounted for 36% of turnover, all delivered strong and competitive growth in 2021. The US grew nearly 4% on top of a record growth year in 2020, while India and China grew well into double-digits, albeit against weaker comps. But sales declined 7.4% in Indonesia, Unilever’s sixth largest market.

Unilever CEO Alan Jope

eCommerce delivered another strong year, on the back of record growth in 2020. In total, the eCommerce business was up 44% with growth coming from all the main sub-channels—pure-play, omnichannel and business-to-business (eB2B). In just five years, this channel has gone from 2% of turnover to 13% in 2021. Developing Unilever’s portfolio into the higher growth spaces of hygiene, skin care, prestige beauty, functional nutrition and plant-based foods is another strategic choice. It is also one that made a meaningful contribution to performance in 2021. While organic growth is Unilever’s first priority, acquisitions also play an important role. Indeed, since 2017, 93% of M&A capital has gone into either prestige beauty, functional nutrition or skin care and other areas of beauty and personal care. Last year, for example, Unilever acquired Paula’s Choice. When that brand is included in results, prestige beauty sales top €1 billion.

In contrast, 98% of disposals by turnover were in slower growth food segments such as spreads and tea.

For all its focus on prestige beauty, fabric care still accounted for 14% of sales, just ahead of skin cleansing and hair care (11% each). Deodorant and skin care sales each represented 7% of sales, and home and hygiene, 5%.

Unilever stepped up investments in science and technology to strengthen the quality and efficacy of its products. The company insists 95% of the turnover tested was equal or better than the main competitor product, with 71% winning outright.

Category Focus

Unilever is growing, but that’s not stopping the company from restructuring. In January, the company said it would cut about 1,500 management jobs. On July 1, it unveiled a simpler, more category-focused organization that is focused on five business units: Beauty & Wellbeing, Personal Care, Home Care, Nutrition and Ice Cream. In Happi’s areas of interest, Fernando Fernandez leads beauty and wellbeing. He had been EVP-Latin America. Fabian Garcia is president, personal care, responsible for skin cleansing, deodorants, and oral care. He had been president, North America. Finally, Peter ter Kulve will continue in his role as president home care, responsible for fabric care, home and hygiene, and water and air. In other personnel moves, Nitin Paranjpe took on the new role as chief tansformation officer & chief people officer, leading the business transformation, and heading the HR function. She had been chief operating officer.

Unilever’s global headquarters in London.

Reginaldo Ecclissato leads the supply chain and Unilever business operations as chief business operations officer. He had been chief supply chain officer.

For Q1 2022, sales rose 11.8%, aided by a 3.5% boost from currency. Underlying sales growth was 7.3%, boosted by an 8.3% price increase, offset by a 1% decline in volume.

According to Jope, the delivery of another solid quarter of sales growth builds on the improved growth momentum that Unilever achieved in 2021 and is underpinned by its increased focus on operational excellence as well as disciplined adherence to its chosen strategic priorities.

“We are maintaining strong investment in our top brands, growing our thirteen billion+ euro brands by 8.8% in the quarter,” he noted. “eCommerce sales now represent 14% of turnover following another quarter of strong double-digit growth. Our priority markets of the US, India and China all grew competitively. We continue to reshape our portfolio into high growth spaces, with prestige beauty and functional nutrition again growing strongly.”

New Ideas

Dove recently added a new vegan Care by Plants deodorant collection.

To keep growing, Unilever is investing in new ideas. The Uncovery is Unilever’s beauty incubator platform that has rolled out an array of indie beauty brands in just the past year. These brands include Duck Lip Vibes, Ferver Skincare, For Every Type, Mojo Wellbeing, Natur-Alternatives, Skinsei and The Good Stuff. Nearly all of them are digital-first and focused on niche markets. For example, the Ferver Skincare lineup is built on fermented actives.

New research ideas include finding ways to trigger the skin’s natural ceramide-producing processes.

“Our products contain skin-identical lipid precursors which act as the building blocks to allow the natural process of ceramide production to occur,” said Dr Andrew Mayes, senior skin research manager, Unilever R&D. “They provide the raw materials and then the skin can do the rest.”

New ideas aren’t limited to new product launches. Unilever is one of the world’s biggest consumers of palm oil. But palm oil, even responsibly sourced palm oil, can have devastating effects on the environment. To help remedy the situation, last month Unilever and Genomatica launched a  venture to scale and commercialize alternative to palm oil and fossil fuel-derived cleansing ingredients. With growing demand for sustainably-sourced palm oil, this venture aims to deliver additional responsibly sourced palm oil alternatives to the market.

With $120 million jointly invested in the newly-formed initiative, and with other strategic investors expected to join, the venture will develop an alternative, plant-based ingredient using biotechnology. According to Unilever, the venture has huge potential to help power its growth and strengthen its supply chains by creating cost-competitive alternatives and reducing its dependence on a small number of feedstocks that can have high levels of volatility. It marks Unilever’s largest investment in biotechnology alternatives to palm oil to date.

“Unilever and Geno began collaborating in 2005 to accelerate the development of novel ingredients to improve the effectiveness of Unilever products,” said Richard Slater, chief R&D officer at Unilever. “Our two businesses share a mission to harness science and nature to accelerate the commercialization of sustainable materials that will drive real impact and change. With this new venture, we will be reinventing the chemistry of home and personal care products for the 21st Century.”

Sales: $36.0 billion
Corporate sales: $57.9 billion

Beauty and personal care represented 42% of turnover. Home care accounted for 21% of sales (food and refreshment, 37%). Unilever’s top 5 markets are: US, India, Brazil, China and Indonesia, with 60% of turnover in emerging markets. Unilever proudly notes it owns 14 of the top 50 global consumer brands. In our space, those brands include Lifebuoy, Lux, Closeup, Sunsilk, Vim, Comfort, Dove, Sunlight, Pond’s, Rexona and Pepsodent.

In a recent Deutsche Bank presentation, CEO Alan Jope and Sanjiv Mehta, president, Unilever, South Asia and chair and managing director, Hindustan Unilever, told analysts that Unilever has five strategic choices:

• Develop its portfolio into high growth spaces;
• Win with brands as a force for good, powered by purpose and innovation;
• Accelerate in the US, India, China and leverage strength in emerging markets;
• Lead in the channels of the future; and
• Build a purpose-led, future-fit organization and growth culture.

One way to develop high growth spaces is through M&A. From 2015 to 2020, Unilever spent $16 billion in areas such as home and hygiene, skin cleansing and care, prestige beauty, functional nutrition and plant-based food.

Going forward, Unilever is focused on prestige beauty, a $156 billion market that’s growing about 7% a year, according to company estimates. Company brands that fill the prestige space include Dermalogica, Kate Somerville, Murad, Ren, Living Proof, Hourglass, Garancia and Tatcha. In fiscal 2020, Unilever’s prestige beauty sales totaled €700 million. Skin care accounts for 80% of prestige beauty sales at Unilever, followed by hair care (12%) and other (8%). At the same time, North America represents 63% of sales, followed by Europe (22%), Asia (14%) and other (1%). Unilever said it intends to win in the space with purpose-led, impactful innovations via a digital-first strategy.

Another area of focus is functional nutrition. According to Unilever, this $140 billion segment is increasing more than 7% annually. Last year, Unilever’s sales totaled €1.1 billion, but the company’s ambition is to reach three billion euros. To get there, Unilever has acquired six functional nutrition brands since 2018: Equilibra, Olly, Horlicks, Liquid I.V., SmartyPants and Onnit. To build the business, Unilever focuses on China, India and the US via digital and direct-to-consumer channels.

Of course, India is much more than nutrition. With sales in excess of $5.7 billion, Hindustan Unilever Limited is the largest FMCG company in the country. Approximately 90% of HUL’s business has category leadership and 9 of 10 household use a HUL brand. Despite those figures, there is still plenty of room to grow. The company notes that household penetration is below 20% for key categories including face wash, body lotion, washing liquids, dishwash liquid, hair conditioner and body wash. Furthermore, India’s FMCCG per capita consumption lags Indonesia (2X) and China (3X). But HUL is making gains. Its hair care market share has tripled in the past 10 years, thanks to offering a range of options from high end naturals (Indulekha) to family brands (Clinic Plus+). Home care, too, has room to grow in India where fabric wash sales have posted a 11% CAGR during the past decade. As household income rises, HUL is rolling out innovative cleaning solutions like Surf Excel and Nature Protect.

Jope told DB attendees that Unilever’s vision “is to be the global leader in sustainable business. We will demonstrate how our purpose-led, future-fit business model drive superior performance, consistently delivering financial results in the top third of our industry.”

By the Numbers
With its portfolio of consumer staples, Unilever weathered the pandemic better than most. Corporate sales fell 2.4%, driven primarily by negative forex. Growth was driven, in part, by hand and home hygiene products, and laundry care. But as people stayed at home and had fewer opportunities to socialze, they spent less time on personal grooming which hurt beauty and personal care sales. E-commerce sales surged 61 and accounted for 9% of Unilever turnover. By region, emerging markets grew 1.2% as China and India returned to growth, after strict lock-downs in the first half of the year. China returned to growth in the second quarter as restrictions were eased, delivering high single digit growth in the second half. Latin America grew mid-single digit and Indonesia grew slightly, though declined in the final quarter. Developed markets grew 2.9%, led by strength in North American in-home foods. Europe declined for the full year, but grew in the final quarter.

Things turned around in 2021. Prestige beauty sales rose sharply and functional nutrition sales are on track for 50% gains. The company said underlying sales rose 5.7%. Still, sales declined less than 1%. As reported in Happi, Unilever is separating is smaller beauty and personal care brands via an Elida Beauty spinoff. The brands, including Q-Tips, Caress, Tigi, Timotei, Impulse and Monsavon, had sales of about $700 million last year.

By segment, beauty & personal care underlying sales grew 2.3%, with 1.5% from volume and 0.8% from pricing. Skin cleansing grew mid-single digit, with growth in the first two months followed by a decline in March as the company started lapping a sharp increase in demand for hygiene products. Dove Care & Protect debuted in the Americas, Europe and India. Skin care and hair care both grew mid-single digit. In hair, wash and care growth was driven by strong performance in China and India, which was partly offset by a decline in styling, as restricted living continued to weigh on usage occasions. Deodorants declined high-single digit as the deodorants market was also impacted by lower consumer usage. Unilever’s prestige business grew strong double digit, helped by the gradual restocking and reopening of brick and mortar stores in the US. Hourglass launched a 100% vegan red lipstick formulated with a patent- pending pigment replacing the industry standard, which is produced from crushed beetles.

Home care underlying sales grew 5.9%, with 6.5% from volume and negative price of 0.6%. Fabric cleaning and fabric enhancing grew mid-single digit, led by recovery in India as consumers returned to offices and schools. Unilever continued rolling out the Omo “tougher on stains, kinder to the planet” plant-based innovation. Home and hygiene grew by mid-single digit as demand for surface cleaners remained elevated, albeit declining in March as Unilever started lapping high growth at the start of the pandemic in 2020. The rollout of Domestos multi-surface germ kill formula expanded in India, Turkey and the UK.

Sales: $36.6 billion
Note: $36.6 billion for home care and personal care products.
Corporate sales: $58.2 billion

Corporate sales rose just 2% last year, below 3-5% targets. Unilever blamed the 0.5% decline in developed markets primarily on European deflation. In contrast, underlying sales in emerging markets rose 5.3%. Beauty and personal care sales increased 6% last year to $24.5 billion. Underlying sales growth added 2.6%, favorable forex results added 2.4% and a favorable contribution of 0.9% came from acquisitions. Specifically, hair care accounted for 12% of sales, skin cleansing 10%, deodorants 8% and skin care 8%. Unilever said deodorants delivered strong, broad-based growth, supported by double-digit growth from Dove. The Rexona Clinical range, with patented antiperspirant technology to better serve consumer needs, and Dove’s zero aluminum range performed well. Growth in skin cleansing was muted by price reductions as a result of lower commodity prices. Dove’s growth in skin cleansing was supported by microbiome-friendly innovations. Growth was weak in hair care due, in part, to competitive pressure in the US and continued pressure from local players in China. Japan and Europe also underperformed. In skin care, Pond’s and Vaseline performed well, with on-trend innovations such as Pond’s Glow Up cream. Unilever expanded into white space markets with its Simple brand, which is now in 30 markets, including Turkey and the Gulf region. Oral care grew slightly and natural variants such as charcoal, aloe and clove gave a lift to sales of Smile.

Prestige brands delivered double-digit growth, with strong performances from Dermalogica, Hourglass and Living Proof. Carver Korea and Sundial had a more challenging year. Last year, Unilever expanded its prestige portfolio by acquiring Garancia, a French derma-cosmetic brand, and Tatcha, which it describes as “a modern skin care brand rooted in classical Kyoto rituals.”

Home care sales rose 6.9% to $12.0 billion on the strength of green cleaning initiatives. Fabric solutions, home and hygiene accounted for 21% of turnover. Unilever said the gains were due, in part, to the success of Cif surface sprays with natural cleaning ingredients. Hand dishwash sales rose, with good performance from Sunlight with recycled packaging, as well as white space launches in Brazil with Brilhante and in China with Omo. Unilever said that format premiumization continued to be a growth driver in fabric, with good growth in liquids and capsules. Seventh Generation’s sales rose sharply. Fabric performance was supported by ongoing market development driven growth in India, where Unilever launched premium detergent brand Love & Care. In China, the company successfully launched Love Home & Planet. However, home care turnover in Africa was lower than expected.

For Q1 2020, as the pandemic raged, Unilever’s sales rose just 0.2% as underlying sales were flat and volume growth of 0.2% was offset by a 0.2% decline in pricing. Developed markets underlying sales growth was 2.8% and emerging markets declined 1.8%.

“Covid-19 is having an unprecedented impact on people and economies worldwide. Unilever has moved at speed to support our multiple stakeholders and maintain our operations through the crisis, and prepare for growth in a new normal,” explained CEO Alan Jope. “We have structured our immediate response into five areas: supporting our people; protecting supply; serving demand; contributing to society; and maintaining our financial strength.”

Like other household and personal products companies, Unilever reported a surge in demand for personal cleansers, laundry and home cleaning products, offset by declines in prestige cosmetics.
No discussion of Unilever is complete without mentioning its environmental efforts. Unilever was one of the first FMCG companies to recognize the devastating impact unbridled consumption has on the planet. Earlier this year, Unilever retained its spot in the Masters category within the Gartner Supply Chain Top 25. The Masters category recognizes companies that have attained top-five composite scores for at least seven out of the past 10 years.

Sales: $36.3 billion for personal and home care.
Corporate sales: $70.1 billion.

Corporate sales declined 5% last year, but the company notes that underlying sales increased 2.9%.

By segment, beauty and personal care (BPC) sales declined 0.3% to about $23.4 billion. Underlying sales rose 3.1%, driven by gains in skin care and skin cleansing, partly offset by slower growth in deodorants and oral care products. The drop in sales hasn’t deterred Unilever from pursuing its purpose of “Beauty that cares for people, society and our planet;” nor from making acquisitions. In the past four years, Unilver’s BPC unit has acquired 12 companies, including Equilibra, an Italian maker of natural personal care products, last year. Top-performing countries included the US, Canada, Pakistan and Bangladesh, which were offset by Brazil, Japan and parts of Western Europe.

Home care sales fell 4.2% to $11.9 billion. The company notes that nearly 80% of turnover is in developing and emerging countries. To keep pace with the rapid changes taking place in emerging economies, the division created four consumer-centric categories:

• Fabric solutions focuses on ready-to-wear clothing;
• Fabric sensations focuses fabrics, fashion and lifestyle;
• Home and hygiene, which focuses on delivering care for a cleaner world; and
• Life essentials, which unites Unilever’s air and water purification brands.

No matter what categories they compete in, the divisions follow the Unilever Sustainable Living Plan (USLP), which is built on the idea that business growth and sustainability are not mutually exclusive.
The USLP has three major objectives:

• Improve the health and well-being of more than one billion people by 2020;
• Halve Unilever’s environmental footprint by 2030; and
• Enhance livelihoods for millions by 2020.

Noble goals all, but to reach them, the company will have to do it without a key contributor to its social and environmental platform. After more than a decade at the helm of Unilever, Paul Polman retired as president and chief executive officer (see box below). He was succeeded by Alan Jope, a long-time Unilever executive who most recently led the beauty and personal care business, Unilever’s largest division. Jope has been a member of the company’s leadership team since 2001 and his previous roles include running Unilever’s business in North Africa.

For the first quarter, corporate sales fell 1.6%, due to the sale of the spreads business. For the full year, Jope said he expects underlying sales growth to be in the lower half of its multi-year 3-5% range.
“Accelerating growth is our number one priority. It requires both great execution and a continued strategic shift into faster growth segments and channels,” he explained. “We saw good performance in key growth channels including out-of-home and e-commerce and benefited from stronger global innovations and faster and more relevant local innovation.”

Underlying sales in BPC rose 3.1%, driven by gains in skin care and deodorants, which were partly offset by oral care declines.

Underlying home care sales rose 6%, thanks to a strong start by fabric solutions and home and hygiene. Life essentials was flat. The Love, Home & Planet home care range debuted in Q1 (for more on Love, Home & Planet, read Happi’s coverage of the recent Sustainability Summits, which starts on p. 36).

In April, Unilever signed an agreement to acquire Olly Nutrition. Terms of the deal were not disclosed. Based in San Francisco, Olly was founded in 2014 by Eric Ryan, who also co-founded Method, the home care company acquired by SC Johnson in 2018. Olly’s mission is to make nutrition “delightfully easy” as the company insists good health is the foundation of happiness. The company is best known for its gummy vitamins and supplements and also sells protein powders and snack bars.

Under terms of the agreement, Olly will continue to be based in San Francisco and will be managed by Eric Ryan, who will assume the role of chief growth officer, and Gerry Chesser, who becomes Olly chief executive officer after serving as chief operating officer.

Just last month, Unilever rolled out Cif Ecorefill, a 10x concentrated refill that enables shoppers to buy one spray bottle that they can use for life. Made with 75% less plastic, Ecorefill attaches to current Cif Power & Shine bottles. The design means 97% less water being transported, 87% fewer trucks on the road and less greenhouse gas emissions. Ecorefill is 100% recyclable once the plastic sleeves are removed. By the end of next year, Unilever expects all Ecorefill and spray bottles to be made from 100% recycled plastic.

Sales: $35.3 bilion for personal and home care.
Corporate sales: $60.6 billion.

Corporate sales rose nearly 2% last year, but personal care and home care businesses did even better, rising 2.6% and 5.6%, respectively. Operating margin rose 110 basis points, driven by savings from Unilever’s Connected for Growth (C4G) program, which was started in 2016. The company says that over 66% of the more than $2.2 billion in savings generated last year were plowed back into brands. And that, according to Unilever, is exactly the point. A key measure of longer term success will be the company’s ability to roll-out bigger and more impactful innovations even quicker, both globally and locally, it said. Last year, the number of local launches rose substantially. Globally, Baby Dove rolled out to 19 more countries and Domestos toilet blocks expanded into 33 countries, which helped drive double-digit growth for the brand.

Personal care sales reached $22.4 billion, helped along by brands with turnover of €1 billion or above, Axe, Dove, Lux, Rexona and Sunsilk. Four markets generated turnover of more than €1 billion: US, India, Brazil and Indonesia, highlighting its emerging market strengths which generated $13.5 billion of turnover. Last year, the Simple sensitive skin care range was rolled out to new markets, while several brands such as Dove and Sunsilk launched natural extensions. In India, Lever Ayush, a brand using ayurvedic ingredients for skin, hair and oral care products, was launched. Hijab Fresh, a hand and body lotion specifically developed for Muslim consumers, was launched in Indonesia. Other launches included KJU Perfumed by Lux in China, capitalizing on the appeal of Korean beauty, and Signal’s White Now Correction range in Europe. North America saw the launch Love Beauty & Planet, a millennial-focused hair care and skin cleansing brand, and ApotheCare Essentials, a range of apothecary-inspired hair care products. Several acquisitions were completed in line with the category’s strategy.
Carver Korea was bought to strengthen skin care sales in China, Japan and South Korea. Hourglass, a luxury color cosmetics brand, Schmidt’s Naturals deodorant brand and Sundial Brands, a US hair care and skin care company serving multicultural and millennial consumers, were acquired in 2017. An agreement was also announced in 2017 to acquire the home care and personal care business of Quala S.A., adding hair and male grooming brands in north Latin America.

The home care division has two brands, Omo (Persil) and Surf, with of €1 billion or more. As with all Unilever businesses, emerging markets are a core strength, accounting for 80% of sales. The company said that premiumization, portfolio evolution and expansion in new geographies all contributed to strong growth in South Asia, Africa, North Africa and the Middle East; as well as Turkey, Russia, Ukraine and Belarus. In more challenging European, South East Asian and some Latin American markets, investment in core brands resulted in growth for Radiant in Brazil, Comfort in China and Sunlight in Indonesia. This was complemented by successful launches of Surf laundry detergents and Sunlight Dishwashing tablets in Central and Eastern Europe, combined with the continued success of Domestos toilet blocks in Europe and liquid laundry detergents in South East Asia.

The 2017 acquisition of Quala SA, a home care and personal care company, will add brands in north Latin America. Consistent with Unilever’s Connected 4 Growth program, home care met changing consumer trends with with speedy local launches. For example, the Italian Cif team identified the potential for nozzles to deliver either a spray or a foam and launched within seven months. Comfort Sakura, a Millennial-inspired cherry blossom fragrance in Japan and China, was launched in five months. Global innovations also accelerated. Capitalizing on the increased penetration of dishwash machines, Sun dishwasher tablets with improved performance, were launched within 12 months. The category continued its innovation in laundry by launching Persil Powergems, a revolutionary format with a new concentrated formula which both lowers Unilever’s  greenhouse gas footprint and delivers high performance. Home care’s innovations responded quickly to consumers’ desires for hygiene, natural ingredients and products that care for sensitive skin. Sales of Seventh Generation, a 2016 acquisition, grew by double digits. Sensitive, a growing segment addressing skin sensitivity, expanded in 24 countries while Neutral, another 2016 acquisition, is now in 11 countries.

For the first quarter of 2018, sales fell 5.2% due to a 9.8% Forex drag, but the company noted that underlying sales growth was 3.4%. Results improved in India and China, but weakened in South Africa and Indonesia. Unilever maintains that C4G is starting to deliver in home care and the portfolio is evolving with businesses such as Seventh Generation and Blue Air.

Sales: $33.2 billion

Hey big spender! Unilever may not be breaking the bank, but for the past 18 months or so, the company has been breaking out the checkbook, snapping up a range of companies like Dollar Shave Club, Blue Air, Seventh Generation, Living Proof, Murad, Dermalogica and, most recently, Hourglass. Founded in 2004 by Carisa Janes, Hourglass is known for its high-performance beauty products.

“We are delighted to be adding Hourglass to our portfolio of Prestige brands,” said Alan Jope, president personal care, Unilever. “The color cosmetics category has been showing high growth-rates, driven by social media content, channel diversity and democratization of professional makeup techniques, and it therefore presents a significant opportunity. Hourglass is already a successful brand in this space, offering fantastic makeup products that also deliver skin care benefits, and we look forward to continuing to grow this wonderful brand.”

CEO Janes added, “As the first color brand in Unilever’s Prestige portfolio, we are excited about this partnership as Hourglass continues to challenge the status quo with high performance luxury cosmetics. Unilever’s commitment to innovation and social responsibility is aspirational, and perfectly aligned with our vision for the future of Hourglass.”
Terms of the deal were not disclosed. The acquisition is expected to close sometime this quarter, subject to customary regulatory approvals.

It may be snapping up companies at a rapid pace, but apparently, Unilever knows how to position its lineup. In Kantar Worldpanel’s fifth annual study of the world’s most chosen FMCG brands, Unilever had the most brands. The analysis of FMCG brands measures which brands are being bought by the most consumers, most often, around the world. It examines around one billion households and 300 billion shopper decisions across 39 countries.

The 13 Unilever brands in the top 50 are Lifebuoy (3rd), Sunsilk (10th), Knorr (11th), Dove (12th), Lux (13th), Sunlight (14th), Pepsodent (18th), Surf (27th), Rexona (28th), Vim (29th), Brooke Bond (34th), Close Up (42nd) and Lipton (48th).

“Increasingly we see that people want to buy from companies and brands that not only have great products at the right price, but also fit with their values,” said Keith Weed, chief marketing and communications officer. “Our experience is that brands whose purpose and products respond to that demand are delivering stronger and faster growth. Our business is investment-led, innovation-led and sustainability-led. We will continue to invest in our brands to drive their growth, popularity and consumer benefits whilst ensuring they are contributing positively to society and the environment.”

Unilever’s doing well by doing good strategy is paying dividends. Its most sustainable brands are growing more than 50% faster than the rest of the business and delivered more than 60% of the company’s growth in 2016. In addition, in this Kantar study, more than two-thirds of the brands included in the top 50 were the Unilever Sustainable Living brands.

Kantar had more good news regarding Unilever’s 10 billion euro home care business, noting that the company’s 5% increase in sales outpaced the industry average and that 80% of sales are in emerging markets. The home care business benefitted from the launch of Surf Sensations, a fabric softener with perfume-like fragrances, and Comfort Intense fabric softeners.

In 2016, corporate sales fell 1%, but increased 4.3% at constant exchange rates. Personal care sales were €20.2 billion, helped along by a Sunsilk relaunch and Tresemmé Beauty-Full Volume range. Lifebuoy’s handwashing campaign provided a lift to soap sales as the message rolled out in Kenya and Ethopia. Finally, sales of Dove took off, helped along by the Men+Care launch.

For the first quarter of 2017, sales rose 6% to €13.3 billion, driven by a 3% price gain (primarily from Asia). In fact, emerging market underlying sales growth was 6.1%, with price up 5.3% and volume up 0.8%.

“The change program, ‘Connected for Growth,’ which we started to implement in the autumn last year is starting to bear fruit and is making Unilever more agile and closer to the local markets, unlocking both further growth and margin,” said CEO Paul Polman.

For the year, Polman expects underlying sales growth of 3-5%, an improvement to underlying operating margin of at least 80 basis points and strong cash flow.

Sales: $33.5 billion

When it comes to the consumer products industry, nobody wants to be stuck in the middle. More often these days, successful companies play in the prestige or value sectors or sometimes both, but under no circumstances does an executive want to find herself caught between a rock and a hard place.

During the past year, Unilever was clearly focused on the top shelf, purchasing four premium skin businesses with annual sales of more than $400 million. These brands include Ren, Kate Somerville, Dermalogica and Murad. The acquisitions didn’t do much to move the sales needle in 2015, but Unilever expects all of them to be a contributor going forward as more consumers seek affordable luxuries.

Corporate sales rose 4.1% (up 10% when currency impact is factored into the mix). Personal care sales increased 13.2%, of which 7.6% was currency impact. Operating margin rose from 18.7 to 18.9%. The company credited improvement to the launch of dry spray deodorants in North America, the launch of Lux Luminique in Japan and the rollout of Dove Advanced Hair Series.

Home care sales rose nearly 11%, including a 4.5% favorable currency impact, with more than 80% of sales derived from emerging markets. Operating margin improved from 6.3 to 7.6%. During the year, Unilever relaunched Sunlight with better stain removal and improved Omo, too. Also providing a lift was the launch of Comfort Intense fabric softener and the introduction of Cif to new markets.

Good stuff, but that doesn’t mean Unilever isn’t watching costs. In January, the company unveiled a zero-based budgeting program to squeeze more efficiency out of marketing.
The concept requires managers to start from scratch to justify marketing and other outlays. Unilever piloted zero-based budgeting in Thailand last year and reduced overall spending across all areas by 2 percentage points as a share of sales. In another cost-cutting move, Unilever will use new “functional models” to reduce costs for internal marketing and other staffing, better aligning headcount costs with where the company generates revenue.

As part of the Unilever Sustainable Living Plan, the company became the first to publish a detailed, stand-alone Human Rights report under the framework set down by the UN Guiding Principles on Business and Human Rights.

For the first quarter of 2016, sales fell 2% to €12.5 billion, but Unilever was quick to point out that underlying sales growth was 4.7%, driven by an 8.3% gain in emerging markets. Volume improved 2.6%.

In a note to investors, chairman Paul Polman said Unilever will continue to focus on driving agility and resilience in its business through the key programs which were established in 2015; i.e., net revenue management, zero-based budgeting and the next stage in its continued organizational transformation.

As this issue went to press, Unilever announced its intent to acquire Dollar Shave Club, an online purveyor of razors and men’s grooming items that shook up the razor category and even caused Unilever’s biggest competitor, P&G, to roll out its direct-to-consumer sales model for Gillette.

Sales: $32.8 billion

While others are selling, Unilever’s buying. In recent months, the company acquired Murad, Dermalogica, Kate Somerville and Ren, all in an effort to expand its prestige skin care business. Terms were not disclosed in any of the deals.
Personal care is Unilever’s largest category and includes Dove, Rexona, Axe, Lux and Sunsilk. Last year, personal care sales fell 2.2% to $21.6 billion, but operating margin improved to 18.7%, up from 17.8% in 2013. Leading the way was Lifebuoy, which reported a 15% increase in sales due, in part, to a relaunch in South Asia of the core range with Activ Naturol Shield (ANS), a patented combination of natural ingredients that is said to protect against 10 infection-causing germs. Sales of Lifebuoy also benefitted from a rollout in China. Within oral care, Regenerate dental care system debuted in the UK. The product, nine years in the making, is said to regenerate tooth enamel mineral thanks to a patented ingredient called NR-5.

Perhaps no other multinational on earth is as embedded in emerging markets as Unilever, and there’s a lot to look forward to when you’re No. 1 in many of these countries. Unilever notes that the global population is expected to reach 8 billion by 2025, with half part of the “consuming class.” Farther afield, the global population will increase 30% by 2050 and there will be three billion middle class consumers in the world by that time.

That kind of growth is great news for Unilever in general and its home care business in particular, as nearly 80% of 2014 home care sales came from emerging markets. Home care sales rose 3%, helped along, in part by the success of billion euro brands such as Omo and Surf laundry detergent, Comfort fabric softener and the Domestos home care line. After a limited introduction in 2014, Unilever is rolling out its concentrated liquid brands in eco-packs, which use 70% less plastic than traditional packaging, across Europe this year.

With so much of its success linked to emerging markets, it should come as no surprise that Unilever runs or takes part in several programs that are designed to improve the health of consumers in developing countries—programs such as the United Nations’ Global Handwashing Day and Lifebuoy’s Help a Child Reach 5 handwashing program. It’s these types of programs that made Unilever the No. 1 most sought-after FMCG employer and a Top 3 most sought-after global employer, according to LinkedIn’s Most In-Demand Employers Index 2014.

“We can lay the foundation for ending poverty and build a sustainable future for generations,” Unilever’s CEO Paul Polman told business leaders, government representatives and others at the UN Global Compact Summit’s 15th anniversary event in New York City in June. However, he warned that time is running out to address climate change and its attendant miseries such as pollution, hunger and disease.

Polman called for a change in the system, noting:

• “We must be disruptive—taking risks and challenging the status quo;”
• “We must be bold—looking at new technologies and creative means of financing;” and
• “We must be inclusive—building new multi-sector coalitions that aggregate efforts and harness the energy of the young to the cause.”

For the first quarter of 2015, coporate sales increased 12.3% to approximately $14 billion, helped significantly by a 10.6% positive currency impact. The company noted that personal care sales improved, but still remain below historic levels. Gains in home care were broad-based.

In personnel matters, the company announced that chief financial officer Jean-Marc Huët will retire on Oct. 1. His successor is Graeme Pitkethly, who joined Unilever in 2002 and is currently executive vice president of the Unilever UK and Ireland business. Prior to this, he has held a number of senior financial roles within Unilever, including head of M&A, head of treasury, pensions and tax, and chief financial officer of Unilever Indonesia.

Sales: $36.8 billion

Sales fell 3% last year, primarily due to unfavorable currency exchange rates, as underlying sales growth increased 4.3%. While some multinationals have been running away from emerging markets, Unilever remains committed to these countries and these consumers, which accounted for 57% of sales last year.  Company executives say emerging markets will continue to play a key role in Unilever’s strategy of doubling its business while reducing its environmental footprint.

By segment, personal care accounted for 36% of group sales, with home care representing 18% of turnover.

Personal care sales were essentially flat, due to exchange rates, although underlying sales growth of 7.3% was broad-based across hair care, skin care, deodorants and oral care.

Home care sales fell 1.2%, even as volume improved 5.7% and underlying sales growth was up 8%. Growth in laundry was attributed to the introduction of products such as Omo with wash boosters and the launch of Comfort fabric conditioners’ Aromatherapy range in Southeast Asia. Also providing a lift was the rollout of Cif and Domestos in Brazil.

By region, Asia, AMET (Africa, Middle East and Turkey) and RUB (Russia, Ukraine and Belarus) accounted for 40% of sales, which declined 1.3% despite the fact that Unilever posted another year of double-digit growth in its three biggest markets in the region: India, Indonesia and China. There was strong growth in Vietnam, but growth slowed in Thailand and sales declined in Japan.
The Americas accounted for 33% of sales last year, but sales fell 5.2% despite gains in North American personal care sales and strong overall performances in Brazil and Argentina.

Sales in Europe fell 2.7%, as southern European markets like Greece, Italy and Spain continued to be a drag on results. Unilever said sales were up in the UK for the sixth year in a row and were stable in France.

Exchange rates took a toll on results in the first quarter of 2014 too, as corporate sales fell 6.3% to $15.6 billion. Personal care sales fell 5.9% to $5.7 billion, despite the expansion of a compressed aerosol deodorant formula in Europe and the launch of a Dove premium range in the US. Also providing a lift were sales of Lux, which rose on the strength of a relaunch in China and Southeast Asia.

Home care sales fell 4.9% to $3.0 billion, despite new product launches such as Small & Mighty concentrated detergents in new markets and the rollout of Cif direct application floor cleaner in Europe and Sun Ultimate dish tablets in France.

Sales: $35.9 billion

The world’s second-largest consumer products company continues on pace to double in size while reducing its environmental footprint. In fact, one of its newest products, Timotei Organic Delight, is billed as the world’s first certified organic hair care range from a prominent mass-market brand.

Unilever’s corporate sales rose nearly 7% last year to $67.3 billion, driven by a 10% increase in personal care and household product sales. Net income increased 7%. Personal care volume increased 6.5% to nearly $24 billion, as market share rose across geographies with strong gains in Latin America; North Africa, Middle East and Turkey (NAMET); Africa, Middle East and Turkey (AMET) and Russia, Ukraine and Belarus (RUB).

Home care volume increased 6.2% to $12 billion, as nearly all markets posted gains. Sales of laundry products were particularly strong in Europe, China and South Africa, according to Unilever.

By region, sales in Asia/AMET/RUB rose more than 10%, driven by double-digit gains in Indonesia, China, Thailand and India. Home care and personal care sales were up, in part, due to improved sales of hair care and deodorant.

Sales in the Americas rose 7.9% on volume growth of 3.1% and price increases of 4.8%. Unilever credited double-digit gains in Brazil and Argentina as well as improved personal care sales in North America.

European sales rose less than 1%, due to continued weakness in southern Europe, particularly Greece and Spain. Those declines were offset by strong performances in France and the UK.

Emerging markets accounted for 55% of sales last year, compared to 52% in 2011. At the same time, emerging market profitability is closing in on the company’s average. In 2012, Unilever’s core operating margin was 13.8%. Margin in developed markets was 14.3% v. 13.3% in emerging markets.

For the first quarter of 2013, sales rose less than 1% to $15.6 billion, but sales in emerging markets accounted for more than 57% of sales. Just last month, Unilever increased its stake in Hindustan Lever from 52% to 67%.

In a Deutsche Bank Conference presentation in June, CFO Jean-Marc Huët noted that thanks to changes in senior management (66% are in new roles), innovative product launches (Dove Men+Care is already a €300 million business) improved underlying sales growth and cash generation, and low cost business models, Unilever is ready for the next stage of its journey, moving from “fit to compete” to “fit to win.”

Many of these “wins” are expected to take place in emerging markets, as 1.8 billion consumers, primarily in emerging markets, will improve their economic situation by 2020. Huët segmented the global population into three basic groups and predicted that the “Have Lots” will grow from 1.9 billion to three billion; the “Haves” will grow from 2.0 billion to 2.7 billion and the “Have Nots” will fall from 2.9 billion to 1.9 billion.

That’s good news for Unilever, since the company has an “unparalleled footprint” in key emerging markets. For example, it is the No. 1 fabric care marketer in Brazil, India, Thailand, Vietnam, Bangladesh and Argentina and the No. 1 hair care marketer in Brazil, India, Indonesia, Thailand, Philippines, Vietnam, Bangladesh, Argentina and Pakistan.

Sales: $32.9 billion

Corporate sales rose 5% to $61.9 billion and net income was up 1% to $6.4 billion last year. During 2011, Unilever completed the acquisition of Alberto-Culver and benefitted from the full year results of Sara Lee’s personal care business, which was purchased in December 2010.

Last year, sales in emerging markets rose 11.5%, led by double-digit gains in India, China, Turkey and South Africa. In fact, emerging markets now account for 54% of Unilever’s sales. In the developed world, sales rose just 0.8%. The US, Germany, UK and France accounted for 61% of Unilever’s developed world business. Sales growth in these countries ranged from 1-4%.

More specifically, sales in Asia, Africa and Central & Eastern Europe (41% of sales), rose 10.5% to $26.3 billion and volume increased 4.5%. Sales in the Americas (33% of sales) rose 6.3% to $21.3 billion on a volume gain of 0.4%. Sales in Western Europe (26% of sales) rose less than 1% to $17.1 billion, but volume declined 1.2%.

Last year, personal care (33% of corporate sales) overtook food (30%) as the biggest category within Unilever. Refreshment accounted for 19% of sales and home care, 18%.

Sales of personal care products rose 8.2% to $21.5 billion. Volume increased 4.2%. Dove became Unilever’s first €3 billion brand. The company credited strong gains in North America, where hair care and deodorants performed well, and in China, where skin cleansing and hair care posted strong gains.
Household product sales increased 8.1% to $11.4 billion. Volume increased 2.2%. Sales of laundry products were strong in China, India, South Africa and Western Europe.

AN EMERGING LEADER
Unilever’s been a dominant force in emerging markets for decades, proudly noting that it has more than 50 years of experience in China, India and Indonesia. Now, with P&G brass insisting that their emphasis is on building share in established countries, Unilever may seize the chance to solidify its position in India and elsewhere. Last month, the company said it plans to diversify its personal care product portfolio in India across categories and price points through brand extensions of its popular Lux and Axe brands. Unilever will build a plant to produce deodorants in India, which will also cater to export demand. Unilever currently imports a large portion of deodorants as aerosols. The new manufacturing plant will thus provide Unilever a huge cost advantage, according to observers.

Dove is a megabrand, but Unilever acquired US rights to Simple (left).

For the first quarter of 2012, sales rose 8.4% to $15.8 billion. Personal care sales rose 10.4% to nearly $5.6 billion driven by the success of Dove Nutrium Moisture shower gels and the rollout of Dove Men+Care. Sales of Lifebuoy rose, helped by the “10 seconds germ-kill” campaign and the introduction of Lifebuoy Clini-Care10 in India. Radox performed well in the UK, helped by the success of the men’s range. The launch of Simple in the US and a strong performance from Fair & Lovely helped drive growth in face care, although Pond’s had a slow start to the year as Unilever transitioned to the new Age Miracle and Flawless White ranges. Vaseline sales were up, helped by the continued rollout of Essential Moisture hand and body range which is now in 14 markets.

Hair care benefited from the rollout of Unilever brands into new markets and strong innovation performance. Tresemmé growth is being driven by the success of the launch in Brazil and the new split ends range. Dove Damage Therapy continues to perform well and the premium Style and Care styling range has just been introduced in the US. Clear is growing rapidly across Asia and Latin America, driven by the success of the 2011 relaunch. Axe hair is now being rolled out across Europe with good initial acceptance.

Double-digit gains for Dove helped propel deodorant sales. The category should get another boost from the rollout of Rexona Maximum Protection to new markets. Oral growth was driven by market development activities and trading up through premium innovations, such as the recent introduction of Signal Sensitive Expert in France. The recent oral launches into new markets including Pakistan, Sri Lanka and Thailand, are progressing well.

Home care sales rose 10% to nearly $2.9 billion. Robust laundry growth reflects Unilever’s ongoing focus on improving the quality of its products, impactful advertising and sustained delivery from key innovations, such as Omo with built-in pre-treaters, according to the company. White space launches also contributed with successful launches of Comfort fabric conditioners in Australia, New Zealand, South Africa and the Philippines.

Household cleaners benefited from the rapid growth of Sunlight hand dishwash products in South Asia and South East Asia, the success of the Domestos Toilet System range and the introductions of Domestos in Argentina, Pakistan and Sri Lanka and Cif in China.Dove is a megabrand, but Unilever acquired US rights to Simple.

In the US, Unilever acquired the rights to the Simple brand of personal care products.

Sales:$28.5 billion

Noxema is making a comeback this year with new products.

Watch out Procter & Gamble, Unilever’s CEO has you in his sights. After several years of slashing underperforming brands, Unilever went on a buying binge last year, closing its $1.7 billion purchase of Sara Lee’s personal care and laundry business in June. Last year, corporate sales jumped 11.1%, but more than half of the gain was due to currency fluctuations. Volume improved 5.8%.
Just last month, Paul Polman admitted that his company had grown “too little” during the past 10-15 years, but that he expects to catch up with rivals such as P&G within the next five years. Polman and company have a lot of catching up to do: Unilever’s corporate sales were about $58 billion last year, compared to nearly $80 billion for P&G. Analysts reckon that if P&G grows 4% annually during the next several years, Unilever will have to grow 11%, a rate that Unilever managed to achieve in 2010, when net income jumped 26%. But is that 11% sustainable? After all, from 2005 to 2009, Unilever posted only a 4% CAGR.
And even as it adds businesses, Unilever has had to do some subtraction. To gain approval of the Sara Lee acquisition, Unilever sold Sanex deodorant and bodywash brands to Colgate-Palmolive. More recently, in May, US authorities OK’d its $3.7 billion acquisition of Alberto-Culver on the condition that Unilever sell the Alberto VO5 brand in the US and divest its Rave brand.

“Without the divestitures required by the department, consumers would have paid higher prices for value shampoo and conditioner and for hairspray sold in retail stores,” Christine Varney, the assistant US attorney general in charge of the antitrust division, said in a statement.

Analysts said the VO5 divesture will hurt Unilever.

“VO5 was one of the brands that they signaled as being part of the attraction of the deal when they announced it,” observed Andrew Wood, an analyst at Sanford C. Bernstein. “I’m sure they’ll be disappointed to sell it.”

When the Alberto deal was announced, Unilever said the accord would make it the top player in hair conditioning and put it in the top three for shampoo and styling products. It’s all part of a strategy to become less reliant on its food business, where Unilever derives about half of its sales. A decade ago, the personal care business represented 20% of Unilever’s turnover. Last year, it accounted for more than 30% of sales.
As it expands its portfolio, Unilever is expanding its reach too. The company aims to generate 70% of sales from emerging markets like India and China—an aspiration shared by P&G and L’Oréal.
Tougher competition in these markets could push prices lower, costs higher and reduce margins for everybody. Still, with Western Europe and the US reaching the saturation point, multinationals are scouring the globe in search of new consumers.
To help find them, last month Unilever announced a reorganization scheme that will take effect on September 1. The new structure allows for a more efficient rollout of increasingly bigger and more scalable innovations.
“Unilever now has over half its turnover in the emerging markets, where, over the last 10 years, growth has been close to double digits,” said Polman in a statement. “We have an opportunity to better support this footprint of the business, to keep our strong momentum, with a more globally aligned country and category organization.”
As part of these changes, Harish Manwani will be appointed as chief operating officer, with responsibility for all markets, in order to drive speed-to-market behind further simplification and efficiency.
The category organization will be broadened to four categories reporting directly to Polman, with Dave Lewis, currently president, Americas, appointed president, personal care consisting of skin, deodorants, oral and hair, and in home care, Randy Quinn, currently executive VP-laundry, and Sean Gogarty, senior VP-household care, will report directly to Polman.

Additionally, Kevin Havelock, currently executive VP-ice cream, will be appointed president of the newly established refreshment category, which includes ice cream and beverages, and Antoine de Saint Affrique, currently executive VP-skin, will be appointed president, food, which includes savory, spreads and dressings. The new structures will be put in place during the third quarter and will be fully operational before year-end.
Michael B. Polk, currently president, global foods, home and personal care and member of the Unilever executive team left the company last month to become president and CEO of Newell Rubbermaid.

For the first quarter of 2011, sales rose 7% to $14.9 billion. All categories grew, driven by a particularly strong performance in the emerging markets. Commenting on the results, Polman said, “We have delivered a good performance which demonstrates that the transformation of Unilever is progressing well.”

Personal care sales rose 4.3% to $4.8 billion on a 2.5% increase in volume and a 1.8% increase in price. The company credited the first quarter gain in personal care sales to the success of Dove Men+Care, the continued strengthening of the Rexona brand and the addition of Axe Excite. Hair care sales were up in North America, China, Southeast Asia and India as a result of the rollout of Dove Damage Therapy, the continued rollout of Clear in Latin America and the relaunch of Clear in Asia.Tigi’s growth outpaced professional product sales.

Home care sales topped $2.7 billion on an 4.6% increase in volume and a 1.4% increase in price. Unilever credited the increase on strong laundry growth, driven by volume and increased pricing. Liquid detergents performed well in Southeast Asia, particularly in China and Indonesia, and the company continued to extend our presence in fabric conditioner with the recent launch in the Philippines exceeding expectations and Comfort entering Sri Lanka.

Household cleaners continued to grow as Unilever brings itspower brands into new markets. The company launched Cif in the Philippines and Algeria, while Domestos was launched in Indonesia and Unilever’s cleaning and hygiene platform was extended under the Glorix brand in Russia.

Sales: $26.2 billion

Volume rose 2.3% last year, while underlying sales improved 3.5%. More specifically, personal care sales rose 4% to $16.5 billion, while sales of home care and other products fell more than 3% to $9.7 billion.

By region, sales in Asia, Africa and Central and Eastern Europe rose nearly 3% to $20.7 billion. Unilever noted that volume growth accelerated through the year, reaching 9.4% in the fourth quarter, with strong performances in Indonesia, China, Turkey, Vietnam, Arabia and Australia.

Sales in the Americas fell 2.6% to $17.9 billion, while volume increased 2.5%. Unilever noted that

Super Bowl MVP Drew Brees is a Dove pitchman.

consumer confidence was fragile in the region in general and the U.S. in particular. Still, all major units in the region contributed to volume growth, with strong performances in Brazil, Chile and the U.S. Pricing turned negative in the fourth quarter, especially in the U.S. and Brazil, driven, in part, by a more intensive competitive pricing environment, especially in home and personal care.

In Western Europe, sales fell 6% to $16.8 billion due to low consumer confidence and rising unemployment. As one might expect, the situation was most challenging in southern Europe, especially in Spain and Greece.

Unilever leadership takes great pride in its strength in developing and emerging markets, as well as its robust portfolio. Last year, D&E markets (which include all countries in Latin America, Central and Eastern Europe, Africa and Asia, except Japan and Australia) accounted for 49% of sales, up from 47% in 2008. Meanwhile, after a decade of rationalization, Unilever’s top 25 brands represent nearly 75% of sales, and the top 13 brands, including Axe/Lynx, Dove, Lux, Omo, Rexona, Sunsilk and Surf, accounted for sales of $32 billion. Moreover, by the end of 2009, 10 of the top 13 brands were gaining share and the others maintaining share, according to chief executive officer Paul Polman.

Double in Size, While Reducing the Footprint
Earlier this year, Polman said that Unilever has set itself the challenge of doubling the size of its business while reducing its environmental footprint. He said that the key to making this goal happen is by inspiring consumers to switch to a more sustainable way of living through the brands they choose.

Speaking at The Economist’s Sustainability Summit, Polman said, “those companies that wait to be forced into action or who see it solely in terms of reputation management or CSR, will do too little too late and may not even survive.”

In his presentation, Polman cited one estimate that if everyone’s living standards and consumption patterns were similar to those of the average Briton, it would mean that the resources of three planets would be needed.

For the first quarter of 2010, corporate sales rose 6.7% to $14 billion. Sales of personal care products jumped 7.9% to $4.3 billion. Unilever credited the gain to the introduction of Dove Men+Care body wash that was launched in Europe using patented “Nutrium” moisture technology and Dove Hair Damage Repair, which debuted in the U.S. At the same time, Lifebuoy soap was rolled out to new markets including Turkey, Malaysia and Egypt.

Sales of home care products rose 2.5% to $2.5 billion on broad volume growth. Unilever noted that sales of liquid detergent in China are strong and the form is being extended into Turkey. Meanwhile, a reformulated Wheel detergent was relaunched in India and a new and improved Radiant detergent was launched in Thailand and South Africa. Also during the quarter, the household cleaning business launched Cif in India and Domestos in Italy.

In a presentation to analysts, Unilever management noted a continuing effort to drive innovation through the Dove brand. In hair, for example, the Damage Expert range of shampoos and conditioners will build a position based on better hair therapy solutions. It is also a good example of innovative use of new packaging design techniques, according to the company. The range will be introduced into more than 50 markets by the end of the year. Also, Unilever continued to roll out Dove Men+ Care throughout Western Europe and North America, with encouraging early results.

Looking ahead, Polman predicted a long, drawn out recovery and noted that the consumer packaged goods industry can be divided into two camps. In the developed markets, the impact of high fiscal deficits on public spending and taxes, stubbornly high unemployment and low consumer confidence may mean a prolonged period of stagnation in some markets. Yet, in D&E markets, Unilever expects robust growth but at lower levels than in 2007 with a risk of overheating in China and India.

Sales: $27.3 billion

Unilever’s corporate sales neared the $60 billion mark, an increase of 0.8%. In Happi’s markets, sales were $27.3 billion. The company’s personal care division, including bar soap and oral care operations, generated sales of $16.7 billion, a 6.6% like-for-like increase, while its household products sector generated sales of $10.6 billion, a gain of 9.8% on a like-for-like basis.

Paul Polman took over the reigns in January.

Big changes came to Unilever since Happi’s last International Top 30 Report a year ago. Namely, the company sold off its North American laundry business in a $1.45 billion deal with Vestar Capital Partners, which, in turn, merged the operation with Huish to create Sun Products Corp. (For more, see Happi’s Top 50 report, July 2009). In addition, the company has a new leader in Paul Polman, who became chief executive upon Patrick Cescau’s retirement in January 2009.

Having trimmed its laundry business, Unilever has also been tweaking its personal care portfolio. In October 2008, the company’s über brand Dove opened its first North American-based spa in Ontario, Canada. The concept had been introduced in the UK back in 2006. Plans call for 50 more spas in Canada within five years. Unilever also snapped up Ivory Coast-based soap producer Cosmivoire in West Africa and moved into the professional hair care space, acquiring Lewisville, TX-based Tigi, a well-known salon hair products business, for $411.5 million.

The corporate giant continues to roll out new products and expand the reach of its leading personal care brands. The Axe franchise in North America was expanded in late 2008 with new hair care products (shampoo, conditioner, stylers); Pond’s skin care was introduced in Asia; and Rexona deodorants were launched in China.In addition, the Dove range expanded with a new hair minimizing deodorant, Dove Visibly Smooth, which launched in January.

Ridding women of hair is one thing, but Dove also has another issue it wants to fight: poor self-esteem. By the end of 2008, the Dove Self-Esteem Fund campaign had reached more than 3.5 million young women, according to the company.

Axe Dark Temptation

Unilever harnesses the power of other brands too for the greater good, namely through educational outreach (which in turn exposes the company’s products to a very large crop of potential consumers). In 2008, the Lifebuoy brand, together with the United Nations and other partners, launched the first ever Global Handwashing Day. Lifebuoy teams in 23 countries helped raise awareness about how washing with soap can help prevent diseases. In India, a Lifebuoy hygiene education program called Swasthya Chetna has reached nearly 51,000 villages, making a difference in the lives of 120 million people in rural areas since 2002. Similar programs in Bangladesh, Pakistan, Sri Lanka, South Africa, Vietnam and Indonesia reached 13 million. Also recognizing the fact that more than 1 billion people do not brush their teeth with fluoridated toothpaste, while more than 2 billion do not brush twice a day, Unilever used its Signal, Pepsodent and Close Up brands to stress the importance of oral health. In 2008, the company extended its partnership with the FDI World Dental Federation, which now covers 40 countries, reminding children and their families to brush day and night with fluoride toothpaste.

Expanding its reach is critical, but Unilever also recognizes that it needs to tread lightly.For example, Rexona boasts one of the greenest 50ml roll-on deodorants available, which the company attributes to radical rethinking of its design and manufacture. The molding, assembly and packaging processes were streamlined and energy efficiency was improved with the resulting roll-on weighing, on average, 8% less and using 1,000 tons less plastic per year than previous packaging. The time needed to make the cap was cut by 34% and the time to make the bottle was reduced by 8%, leading to significant energy savings. In household products, environmental issues are also taken to heart—Surf Excel Quick Wash laundry detergent saves two buckets of water per wash for consumers in India (where water is scarce and expensive), according to Unilever.

In May, chief executive Paul Polman, speaking at the World Business Summit on Climate Change, called for governments to support a moratorium on deforestation as a crucial measure to tackle climate change.

“The destruction of the world’s tropical rainforests accounts for about 20% of greenhouse gases—more than the entire transport sector. We believe that we are at a point in time where, if government and industry work effectively together to address the problem of deforestation, we can make real progress,” Mr. Polman said.

One of the drivers of deforestation in South East Asia, particularly in Indonesia, is the palm oil industry, of which Unilever is a large customer. Mr. Polman said that the consumer goods industry must exert pressure on the growers, through the Roundtable on Sustainable Palm Oil and through buying decisions and commitments to purchase certified sustainable palm oil made available by suppliers. He also made a commitment to measuring and managing Unilever’s climate change impacts across the whole value chain. This would involve looking beyond the greenhouse gases coming from the factories and lorry fleets and including the impact from both the sourcing of raw materials and from consumer use. The commitment will involve a review of a network of 250 Unilever factories around the world, as well as an evaluation of how agricultural raw materials are sourced and the impact of 2 billion consumers using the products.

“We need to focus on where the impacts are greatest and where we can make a difference,” Mr. Polman concluded. “None of these things are easy, but we must not squander any opportunity to make progress.”

Sales: $25.48 billion for home and personal care products.
Corporate sales: $55.1 billion.

Corporate sales hit $55.1 billion in 2007 and with household and personal product sales topping $25 billion, Unilever tops our Top 30 list once again.

Bolstered by €1 billion brands such as Lux, Dove and Sunsilk, Unilever’s personal care group recorded sales of $15.5 billion, with underlying growth of 6.7%. Home care sales rose 6.1% to $9.99 billion, fueled by its own roster of blockbuster brands that include Omo, Rexona and Surf.

For Unilever’s household cleaning business, 2007 was a particularly successful year with brands such as Cif and Domestos helping grow sales by 9%. In skin care, the Pond’s brand went from strength to strength in southeast Asia, China and India, according to Unilever, powered in part by the launch of a new anti-aging range. Vaseline was Unilever’s fastest-growing global skin brand, with underlying sales growth of more than 8%. In addition, Vaseline’s Cocoa Butter range proved to be the brand’s most successful U.S. launch in a decade. Deodorant brands also made good progress in 2007, with Axe and Rexona both achieving double-digit growth.

Oral care returned to growth in Europe, while continuing its robust performance in Indonesia, China and Africa, aided by innovations such as a combined toothpaste and mouthwash. To grow its oral care operations, Unilever recognizes the value of close relationships with dental professionals. In 2007, the company extended its partnership with the FDI World Dental Federation, which represents more than 1 million dentists.

On a geographic basis, European sales at current rates of exchange rose by 1.4%, after the impact of acquisitions, disposals and exchange rate changes. The region sustained its improving trend in 2007 with underlying sales growth of 2.8% for the year. While Unilever said overall it saw improving trends almost everywhere, Russia was the outstanding performer.

The new Dove pro age range of products is growing in Europe and elsewhere, and Dove Summer Glow self-tanning and body lotions are now available in most countries. Clear anti-dandruff shampoo was launched in Russia, with good consumer response. Small & Mighty concentrated liquid laundry detergents were launched in seven European countries.

In the Americas, sales at current rates of exchange fell by 2.4%, after the impact of acquisitions, disposals and exchange rate change. Underlying sales grew by 4.1% throughout the year, with an increasing contribution from pricing which was up 2.6% for the year.

In the U.S., overall consumer demand held up well in Unilever’s categories. Market growth in home care and personal care slowed somewhat in the second half. Business in Mexico made good progress in the second half of the year and Brazil showed an improved performance in the fourth quarter. Argentina, Andina and Central America performed well throughout, according to the company.

In Asia/Africa, turnover at current rates of exchange rose by 6.2%, after the impact of acquisitions, disposals and exchange rate changes. Underlying growth of 11.1% for the year reflects both the vibrancy of these markets and the high priority we place on building our business in the region. Growth was consistent and broad-based across categories and countries, including established markets such as India, Indonesia, the Philippines, South Africa and Turkey, which all grew in double digits. China remains a key priority and grew strongly for the third consecutive year, the company said.

The company is actively bringing big-name products to this growing region. Clear anti-dandruff shampoo was launched in China, Arabia, Egypt, Pakistan and the Philippines. In Japan, Unilever launched the Axe brand and Dove pro age skin care products. An improved range of Dove shower products was extended to North East Asia, while Lifebuoy soap was launched in South Africa and a new variant added in India. In laundry, the “Dirt is Good” concept was introduced to Thailand.

Unilever is focused on bigger innovations and faster rollouts on a global basis. A prime example is Clear Anti-Dandruff shampoo. Formulated with Vita-ACE, a combination of amino acid and vitamin E to strengthen and nourish the scalp, along with ZPT, Climbazole and scalp care agents, Clear was simultaneously launched in three of the biggest hair care markets in the world—China, Russia and Brazil—as well as the Philippines, Pakistan, Egypt and Arabia.  Unilever also created a Clear range specifically for men, including Clear ActiveSport, HairFall Decrease and Style Express, as well as unisex varieties such as Clear Ice Cool, Itch & Dry Scalp Control and Extra Strength.

In February, Unilever continued to simplify its structure by combining home and personal care and foods into a single category structure.  In addition, to reflect the company’s strategic focus on growth in developing markets, Central and Eastern Europe will be managed within an enlarged region comprising Asia, Africa and Central and Eastern Europe. Western Europe will become a stand-alone region, the company said.

The changes came as Unilever made board and senior executive changes, with two long-time employees retiring in June. Specifically, Kees van der Graaf retired from the boards and from his role as president Europe, as did Ralph Kugler, who was president of  home and personal care.

Harish Manwani, who had been president Asia/Africa, is leading the newly expanded region and Doug Baillie is president of western Europe, having previously been chief executive officer of Hindustan Unilever. The roles of president home and personal care and president, foods were merged under the leadership of Vindi Banga.

Another staff change came in June, when Unilever tapped Geneviève Berger as its new chief research and development officer. Prof. Berger, who had been a non-executive director with the company, had most recently been professor of medicine at Pierre and Marie Curie University and at La Pitié-Salpétrière Teaching Hospital in Paris. In her new role, she will serve as the functional leader for research and development in Unilever and will directly lead all resources and major laboratories dedicated to the company’s focus on scientific discovery. In addition, she will be responsible for Unilever’s Safety and Environmental Assurance Centre (SEAC).

In June, Unilever Cote d’Ivoire disposed of palm-oil interests and acquired the soap business of Cosmivoire, an Ivorian producer with a market presence throughout western Africa. Cosmivoire is a subsidiary of SIFCA, an Ivorian agro-industry company.

Last August, Unilever CEO Patrick Cescau said that the company was interested in ditching its U.S. laundry business. However, as of press time, no further details were announced nor had a buyer reportedly been found.