Hellmann’s, Horlicks, Knorr and Magnum contribute to Unilever’s food sales growth

26 Apr 2024 --- Unilever reveals its results for the first quarter of 2023, noting a sales growth of 4.4% and volume growth increasing to 2.2%. All five of its five Business Groups (Beauty & Wellbeing, Personal Care, Nutrition, Home Care, Ice Cream) recorded a growth.

Overall, the company’s turnover increased to €15 billion (US$16.1 billion), indicating a 1.4% growth in comparison with the previous year. This figure takes into consideration a 2% decline from currency and a 0.9% decline from disposals net of acquisitions.

“Unilever delivered improved volume growth in the first quarter. This was driven by our power brands, which saw underlying sales growth of more than 6%, with strong performances from Dove, Knorr, Rexona and Sunsilk,” comments Hein Schumacher, CEO.

Power brands represent 75% of the company’s turnover, leading to growth driven by a 3.8% increase in volume. These 30 brands include Ben & Jerry’s, Cornetto, Hellmann’s, Horlicks, Knorr, Liquid IV and Magnum. 

“We are implementing the Growth Action Plan at speed, focused on three clear priorities: delivering higher-quality growth, creating a simpler and more productive business, and embedding a strong performance focus. This is underpinned by our commitment to do fewer things, better and with greater impact.”

Unchanged 2024 outlook
Taking into consideration the underlying sales growth of 3% to 5% and the modest improvement in underlying operating margin, Unilever’s 2024 guidance remains the same as before. The company predicts a modest improvement in its underlying operating margin for the full year, resulting from a higher gross margin and increased investment in its brands.

“In March, we announced the separation of Ice Cream and the launch of a comprehensive productivity program. These actions will drive focus, faster growth and reduce costs. Dedicated project teams are progressing the work at pace,” Schumacher explains.

 Hein Schumacher, CEO of Unilever.The Ice Cream category grew by more than 2% as a result of price changes, while volumes declined by close to 1%. It is expected that as “the main ice cream season” approaches, Ice Cream’s performance will grow, supported by the operational changes made with the aim to drive improved productivity, as well as product rationalization and investments in innovations.

The Ice Cream brand Wall’s grew with positive price and volume, while sales of Magnum declined and price growth was offset by the volume decline. Ben & Jerry’s and Cornetto grew with positive volumes.

The Nutrition category grew underlying sales by almost 4%, with volumes sequentially improving from declining by 0.4% to a 1.1% decline in Q4. In this category, Hellmann’s recorded the most impressive growth with the launch of its Plant Based Mayo and four new variants of Flavoured Mayo — Chipotle, Italian Herbs, Tajin and Truffle.

The company’s Scratch Cooking Aids also grew, and the brand Knorr led growth owing to its ‘Eat for Good’ campaign, including Bouillon & Seasonings variants for both retail and foodservice.

“Unilever’s transformation is at an early stage, but we have increasing confidence in our ability to deliver sustained volume growth and positive mix as we accelerate gross margin expansion,”asserts Schumacher.

Emerging markets led sales
According to the newly released data, Latin America, Turkey and Africa once again delivered strong sales volume, continuing the momentum from 2023. In China, sales also grew mid-single digits with good volumes, with Unilever Food Solutions standing out as the most successful in the East Asian nation.

The growth recorded in the region of South Asia was driven by volume. In India, input cost deflation resulted in negative price growth. 

The performance of the South East Asia region was impacted by a sales decline in Indonesia, owing to Indonesian consumers’ boycott of certain international brands in response to the geopolitical situation in the Middle East, which the company described as “continued, but less material.”

Emerging markets as a whole grew underlying sales by 5.4% and 3.9% from volume. Meanwhile, underlying sales in developed markets grew by 3%, with volumes almost flat at a decline of 0.3%. 

In North America, sales grew 3.6%, with positive volume growth at 1.4%. The region is characterized by continued strong performances, in particular of Health & Wellbeing and Prestige Beauty.

In Europe, the 4% underlying sales growth was driven by price, while volume declined by 1.5%. It did sequentially improve with a return to volume growth in the UK, France and Eastern Europe. Price growth has continued to moderate from its peak reached in Q2 2023.

By Milana Nikolova