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Unilever finds strength in emerging markets and innovation

By staff reporter , 07-May-2009

Unilever’s activities in the developing and emerging markets and the US have proved key to growth in Q1, but private label presents a challenge to brands.

The Anglo-Dutch consumer products group has today reported organic growth on 4.8 per cent, with a total turnover of €9.5bn. Moreover, the developed and emerging markets were said to have seen double-digit growth, while performance in the US was “improved”.

In Western Europe sales dropped some 2.8 per cent on the prior year period, as the region has born the brunt of the downturn. “There has been some down-trading to private label brands,” the firm noted, adding that it is stepping up innovation to counter the trend.

Consumers’ switch to private labels was also a feature in the US, where own-brand ice creams have gained some market share against Unilever’s brands.

Interestingly, though, the trade down to private label seems to be balanced by good sales for premium brands. “We have seen good growth in our indulgence ice cream brands – Magnum, benefiting from the recent ‘temptation’ and ‘minis’ ranges, and Ben & Jerry’s”.

In Asia and Africa, sales were up 9.5 per cent to €3.5bn, despite some price increases and slowing economies. “Consumption of our categories has continued to grow in both volume and value,” said the company.

Unilever has made new investment in the Asia region by setting up a new supply chain centre in Singapore, intended to mimic the model already running in Europe.

In the Americas, sales were up 7.2 per cent on last year’s Q1. The US returned to positive volume growth, and sales there were was up 3.8 per cent. However Latin America looks to be the real star, as growth of 11 per cent was experienced across the region – despite economic troubles there.

CEO Paul Polman said the results were “solid” given the trading environment. Overall operating profit was down 32 to per cent to €1.23bn, but this was largely the result of disposals as the company streamlined its operations.

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