Top Companies Report

1. Unilever

August 11, 2011


Noxema is making a comeback this year with new products.

United Kingdom

www.unilever.com


Sales:$28.5 billion


Key Personnel:

Paul Polman, chief executive officer; Jean-Marc Huët, chief financial officer; Doug Baillie, chief human resources officer; Geneviéve Berger, chief research and development officer; Dave Lewis, president, Americas; Harish Manwani, president, Asia, Africa, Central & Eastern Europe; Pier Luigi Sigismondi, chief supply chain officer; Keith Weed, chief marketing and communication officer; Jan Zijderveld, president, Western Europe.


Major Products:

Personal Care—Axe/Lynx, Dove, Lifebuoy, Pond’s, Rexona, Signal, Close-Up, Sunsilk, Lux, Vaseline, Tigi. Household Care—Persil/Omo, Cif, Comfort, Domestos, Sunlight, Omo, Radiant, Surf, Snuggle.

 


Unilever’s sales for the first quarter of 2011 were helped along by gains in the personal care category, which includes AP/deos.


New Products:
Axe Rise and Excite variants, Dove Damage Therapy. Acquisitions—Sara Lee personal care (Radox, Duschdas and Neutral), Alberto-Culver (Nexxus, TreSemme, Alberto VO5 outside the US).


Comments:
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.

  • Fit for Fitness

    Fit for Fitness

    Christine Esposito, Associate Editor||February 21, 2017
    Kinx Active is a new brand targeting women who want beauty products that can stand up to their fitness routines.

  • Cargo Says Aloha To Spring/Summer

    Cargo Says Aloha To Spring/Summer

    Christine Esposito, Associate Editor||February 13, 2017
    Cargo Cosmetics has rolled out its new Spring/Summer collection with Hawiianan singer Anuhea.

  • Monday Morning Quarterback

    Monday Morning Quarterback

    Christine Esposito, Associate Editor||February 6, 2017
    Super Bowl commercials are big business. Let’s look at some of personal and household care brands that bought spots this year

  • What the Halal  Is Going On?

    What the Halal Is Going On?

    Imogen Matthews , In-Cosmetics||February 2, 2017
    Demand for these beauty products is surging thanks to a fastgrowing Muslim population.

  • Relief for Sensitive Scalps

    Relief for Sensitive Scalps

    Guadalupe Pellon and Annette Mehling , BASF||February 2, 2017
    BASF researchers detail the attributes of the company’s highly effective hair care system focusing on scalp sensitivity.

  • Defining Clean Skin

    Defining Clean Skin

    Nava Dayan PhD, Dr. Nava Dayan LLC||February 1, 2017
    A look at the issues, research and history surrounding this controversial topic.

  • Linked In

    Linked In

    Christine Esposito , Associate Editor||February 1, 2017
    Through virtual reality, apps and connected devices, beauty and personal care brands can strengthen their customer relations

  • Hitting the Right Notes

    Hitting the Right Notes

    January 6, 2017
    Agilex Fragrances is the leader in the middle market fragrance category.

  • The Smell of Clean in 2017

    The Smell of Clean in 2017

    January 6, 2017
    Changing consumer lifestyles and demographics are impacting the scents found in the household cleaning category.

  • On the Edge

    On the Edge

    January 6, 2017
    Expanding beauty brands to watch in 2017

  • A New Contender?

    A New Contender?

    January 6, 2017
    Detergent sales are up, innovation continues and Henkel is determined to make it a dogfight in the segment.

  • Engagement 2016

    Engagement 2016

    January 6, 2017
    CSPA convenes in Fort Lauderdale for annual meeting.

  • The World Comes to Orlando

    The World Comes to Orlando

    Tom Branna, Editorial Director||December 1, 2016
    More than 1,600 chemists traveled to Florida for the IFSCC Congress

  • The Plex Phenomenon

    The Plex Phenomenon

    Denise Costrini, Croda North America||December 1, 2016
    Croda details the hair-protecting qualities of bond multipliers and the company’s new bond-building formulation system.

  • New Hair Care Ingredients

    December 1, 2016
    Check out the latest releases from suppliers.

  • Hair & Now

    Hair & Now

    Melissa Meisel, Associate Editor ||December 1, 2016
    The shampoo and conditioner category is expanding with modern takes on these classic formulations.

  • Perform or Perish

    Perform or Perish

    Christine Esposito, Associate Editor||December 1, 2016
    Success in today’s skin care sector begins with active ingredients, formulated in products that address modern-day issues.

  • Soap Opera

    Soap Opera

    Christine Esposito, Associate Editor||November 2, 2016
    FDA’s recent antibacterial ruling has soap sector stakeholders scrambling to keep some ingredients in their formulation kit.

  • New Ingredients for  Household Cleaners

    New Ingredients for Household Cleaners

    Tom Branna, Editorial Director||November 2, 2016
    Here are ingredients introduced by suppliers during the past 12 months.

  • A-Okay!

    A-Okay!

    Imogen Matthews, For In-Cosmetics||November 2, 2016
    K-Beauty influences cosmetic development around the world.

  • Next Gen  Antiseptics

    Next Gen Antiseptics

    Emily Kalal and Katherine S. Maka, RITA Corporation||November 2, 2016
    RITA researchers detail the benefits of 0.75% chlorhexidine gluconate (CHG) antiseptic handwash

  • Proof Positive

    Proof Positive

    Christine Esposito, Associate Editor||October 3, 2016
    Testing service providers enable companies to back up their claims and stay in compliance with regulations.

  • Change Is in the Air

    Change Is in the Air

    Doreen Wang, BrandZ ||October 3, 2016
    Technology is changing the personal care market

  • Skin Care of One’s Own

    Skin Care of One’s Own

    Christine Esposito, Associate Editor||October 3, 2016
    Nu Skin’s ageLOC Me—which melds the worlds of smart-phone technology, efficacious ingredients and personalization

  • Back to School

    Back to School

    Tom Branna, Editorial Director||September 1, 2016
    It may be September, but class was in session this summer during the Private Label Manufacturers Association’s Executive Educ

  • What

    What's In Your Formula?

    Christine Esposito, Associate Editor||September 1, 2016
    A look at the ingredients beauty brands are using to fuel their formulations and capture consumers’ attention.

  • How Green Is Your Surfactant?

    How Green Is Your Surfactant?

    Tom Branna, Editorial Director ||September 1, 2016
    Suppliers offer a range of solutions to help household and personal care product formulators develop formulas

  • Special Effects

    Special Effects

    Melissa Meisel, Associate Editor||August 1, 2016
    Fall 2016 color cosmetics reflect light and offer a focus on elements like pigment, slip and wear.