As the Competition and Market Authority (CMA) closes its investigation into Unilever’s environmental claims, the first Consumer Packaged Goods report looks at Unilever’s focus on sustainability and social impact.
Unilever boasts a vast and diverse product portfolio encompassing a wide range of food, home care, beauty and personal care, as well as personal hygiene categories. A glimpse at its core offerings shows just how diverse its portfolio is and just how expansive CPG can be.
It owns – to name just a few of the 400 brands in its stable – Hellmann’s mayonnaise, Knorr stock cubes, Horlicks, Ben & Jerrys, Magnum, Carte D’Or, Lipton tea bags and Pukka Herbs.
On the home cleaning front, it numbers Persil, Omo, Cif, Domestos, Radiant and Comfort fabric softener among its roster, while also cornering the market in hair and skin care with Dove shampoo and conditioner, TRESemmé, Lynx, Impulse, Sunsilk, Vaseline, Simple skincare products, Dove deodorants, Lux, Lifebuoy and Dove soaps. Quite a list.
Unilever operates in virtually every European country, boasting a near-ubiquitous market presence. France, Germany, the UK, Italy and Spain are the most established markets and account for a significant portion of Unilever’s European revenue. Poland, Hungary and the Czech Republic represent significant growth opportunities with growing consumer spending power, while India and China are markets that are looking potentially huge for the group.
Unilever naturally has strong partnerships with major supermarkets, hypermarkets, convenience stores and independent retailers across Europe, as well as working with large distributors to get its products to restaurants, cafes, vending machines and cleaning companies, extending reach beyond traditional retail spaces.
While not as prevalent as traditional channels, Unilever is increasingly exploring online sales platforms and subscription models for specific product lines like premium beauty products and personalised hygiene kits.
Unilever boasts impressive financial performance. In 2023, its global revenue exceeded €60bn, with Europe being a crucial contributor. It has also consistently demonstrated strong year-on-year revenue growth and profitability.
Unilever’s position in the European CPG market is cemented by its brand power and global recognition. It possesses some of the most recognisable and trusted brands globally. However, with such established brands, it faces a dilemma over how and where to innovate. The need to create new products to cater to changing consumer habits has to be balanced against not creating products that compete with or cannibalise its existing brands.
Some examples of the strategy it has adopted to maintain this balance include the premiumisation of Magnum ice creams, along with the creation of new flavours and additions. It has also applied nanotechnology to Dove soap, although details of how are scant. It has also introduced plastic-free packaging for Persil washing detergent.
This latter move plays to Unilever’s focus on sustainability and social impact, which has seen the company instigate initiatives such as promoting gender equality, empowering smallholder farmers and addressing hygiene issues in developing countries. It is also prioritising diversity and inclusion within its own workforce and marketing campaigns, reflecting the changing demographics of the European market.
While Unilever enjoys a dominant position in Europe, it faces challenges. Competition from established competitors like Nestlé and P&G, as well as emerging challenger brands offering niche or specialised products, will require continued innovation and differentiation.
Economic uncertainties and fluctuating consumer spending power across Europe could impact sales figures, while staying ahead of rapidly evolving consumer preferences for healthy options, sustainability and personalised experiences could be demanding.
Unilever’s future strategy in Europe will likely focus on adapting to consumer trends in areas such as plant-based alternatives, healthy snacking options, personalised beauty solutions and environmentally-friendly packaging. It could, for example, invest in plant-based protein alternatives for existing meat snack brands, or develop new product lines catering to specific dietary needs.
Around this the company is also set to focus on leveraging customer data to personalise marketing campaigns, and potentially exploring offering customised product bundles within specific categories like laundry detergents or skincare products could be a future move. It is also likely to up investment in ecommerce platforms, potentially offering subscriptions and targeted online marketing campaigns, as D2C selling becomes part of its distribution strategy driven by consumer desire for convenience. Building a strong online presence that complements their established bricks-and-mortar distribution network is critical.
The European Consumer Packaged Goods (CPG) market – that collection of ambient products and simple SKUs that make up a vast swathe of what Europe’s consumers regularly buy – is shifting as the macroeconomic landscape around it changes. Consumer shopping habits and financial pressures have seen many CPG brands and manufacturers move to embrace D2C ecommerce to move more product and to compete with new players in mass retail. But this has come with its challenges, not least reinventing its supply chains, pricing and distribution models.
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