In the first quarter of 2020, Unilever, one of the world’s largest consumer goods companies, managed to maintain steady business performance despite the challenging circumstances caused by the COVID-19 pandemic. The company reported flat underlying sales, indicating that there was no significant decrease in consumer demand for its essential products. Additionally, Unilever saw a slight increase in volume growth of 0.2%, demonstrating that consumers were still purchasing its products from open stores.
Although the company experienced favorable sales figures, there was a slight decline in prices, with a decrease of 0.2%. This indicates that Unilever may have had to make adjustments to its pricing strategy to remain competitive in the face of the pandemic.
Unilever’s performance varied across different markets. Developed markets, such as Europe and North America, saw a commendable growth of 2.8% in underlying sales. In contrast, emerging markets, including countries in Asia and Africa, experienced a decline of 1.8%. This discrepancy could be attributed to the varying levels of lockdown measures and economic disruptions faced by these regions.
Unilever also highlighted the role of acquisitions in contributing to its overall turnover of €12.4 billion. Specifically, acquisitions accounted for 0.6% of the company’s turnover. This demonstrates Unilever’s strategic approach to expanding its business and diversifying its product portfolio.
The CEO of Unilever, Alan Jope, acknowledged the unpredictable nature of the operating environment caused by the pandemic. He emphasized how the company was able to respond effectively by increasing production capacity in essential categories such as hand hygiene and food. This proactive approach allowed Unilever to meet the increased demand for these vital products.
Within the Beauty & Personal Care division, Unilever experienced a modest increase in turnover, reaching €5.3 billion. This growth was mainly driven by a rise in volume, which saw a 0.7% increase. However, this growth was partially offset by a 0.5% decline in prices.
Consumer demand and household stocking were the primary factors driving growth in key categories within the Beauty & Personal Care division. As people became more conscious of hygiene practices, products related to skin cleansing, such as soaps and sanitizers, experienced significant growth. Unilever responded to this increased need by expanding its range of personal cleaning products, including its popular Lifebuoy soap brand. The company also took the opportunity to introduce Lifebuoy products in 43 new markets.
However, the skincare category faced challenges due to various factors. Travel restrictions impacted the Carver portfolio, which includes popular skincare brands, while lockdown conditions in India affected overall sales. Despite these obstacles, Unilever’s Vaseline brand performed well with mid-single-digit growth.
Unilever’s Prestige portfolio, which includes high-end beauty and personal care products, was negatively affected by the closure of health and beauty channels in many markets. Additionally, the lockdown measures in China and India had a significant impact on Unilever’s haircare portfolio.
On a positive note, Unilever saw mid-single-digit growth in the deodorants category. Strong performances from the Rexona Clinical range and Dove deodorants in particular contributed to this growth.
In conclusion, Unilever continues to adapt and respond to the challenges brought about by the COVID-19 pandemic. By focusing on essential products and increasing production in key categories, the company aims to maintain its business resilience during these uncertain times. Further adjustments to pricing strategies and expansion into new markets will likely be vital to Unilever’s continued success.