Unilever reported a 1.4% drop in its food sales volumes in the third quarter, as its spreads business suffered from high pricing relative to competitors – but overall revenue at the company was up 10.3%.
Food is the company’s second largest segment after personal care, but Unilever's overall sales increased in the quarter compared to the prior year period, to €13.4bn, driven by a 3.4% increase in volumes and a 2.4% increase in pricing.
Emerging markets, which account for 55% of the company’s business, also boosted Q3 results, with sales up 12.1%.
In food, overall sales shrunk 0.4% in the quarter, to €3.56bn. The company said that beverages growth improved in the quarter “but still lags market growth”, while ice cream saw positive volume and price, with underlying sales growth of 8%.
CEO Paul Polman said in a statement: “I am pleased that we have again reported good quality growth, with volumes ahead of our markets. This consistent performance, despite continued high levels of competitive intensity, depressed economies and increasing global imbalances and uncertainty, shows that the Unilever transformation is well on track and is being embedded deeply in the business.”
He warned that commodity cost pressures are likely to remain, and “there is no sign that the level of competition will ease.”
“In this challenging environment there is no change to our objectives, which remain: profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow. For 2012 we remain on track to deliver a modest improvement in core operating margin.”