The FMCG firm said today (25 April) “weakness” in its spreads category held back performance in developed markets in the first three months of 2013.
CEO Paul Polman added a “tough promotional” environment meant volume sales of its spreads brands fell despite product innovations such as Flora Buttery and liquid margarines launching in Europe.
The firm is currently overhauling its marketing strategy for Flora in the UK and recently reappointed adam&eveDDB to handle the account. It’s understood the brand briefed agencies to come up with a radical revamp of the brand’s communications and the first work is expected later this year.
A recent ad campaign to launch Flora Cuisine, a healthy cooking oil, featured TV presenter Vernon Kay and his mum. http://www.marketingweek.co.uk/unilever-turns-to-vernon-kay-to-launch-healthy-cooking-oil/3024558.article
Sales growth across Unilever’s food division, which also includes dressings brands such as Hellmann’s, fell 0.5 per cent during the period while volumes declined 1.4 per cent.
Unilever reported total sales growth of 4.9 per cent in the first quarter of its financial year, missing analysts expectations. Volume sales increased 2.2 per cent and revenue increased 0.2 per cent to €12.2bn (£10.3bn).
Unilever’s focus on rolling out product and packaging innovations and extending its established brands into developing markets helped drive sales growth in emerging markets by 10.4 per cent. In Europe, sales growth fell 3.1 per cent and volumes declined 2.1 per cent.
Unilever’s personal care division, which includes brands such as Dove and Lynx reported sales growth of 8.3 per cent to €4.4bn (£3.7bn) during the quarter. Volume sales increased 5.6 per cent.
Yesterday (24 April), rival P&G also posted lower than expected sales and profit growth but stood by its strategy to invest in brands and innovation to drive long-term growth rather than focusing on short term quarterly gains.
Meanwhile, the latest Nielsen figures show FMCG brands made the second biggest increase in ad spend in 2012, behind only telecoms brands.
Ad spend across the FMCG sector increased 6.8 per cent during the year and accounts for 25.1 per cent of total global ad spend. Telecoms brands spent 7 per cent more on advertising than the previous year and account for 5.7 per cent of total ad spend.