Unilever banks on innovation to boost future sales
Unilever is banking on its “robust” innovation pipeline to help it weather the tough economic climate and “reinvigorated competition”, as it missed market expectations for its second quarter sales.
The maker of Wall’s ice cream and Lynx reported a 5 per cent increase in sales in the three months to 30 June, while analysts had expected underlying sales growth of 5.5 per cent. Unilever said growth was slowing in emerging markets, as macro-economic “headwinds” influence consumer behaviour and developed markets remain “sluggish” with little sign of any recovery in North America or Europe.
Paul Polman, Unilever chief executive says innovations such as the launch of its compressed deodorants range, Vaseline Spray & Go and Magnum 5 Kisses remain the “key driver of growth”. Unilever’s strongest growth came from its personal care and home care divisions, while food sales were hit by “adverse weather”.
Polman adds: “There is no room for complacency: we are well aware that past success is no guarantee of future success. The toucher economic environment and reinvigorated competition require us to set the bar higher on innovation and increase investment behind our brands. at the same time we need to continue to take costs out of the system to help finance this investment.”
In Europe, underlying sales growth fell 0.8 per cent year on year. Unilever says it continues to see highly price-conscious consumers are reluctant to spend unless products offer good value for money.
Last month rival P&G launched its largest a global corporate brand campaign to highlight how its product innovations have a “meaningful impact” on consumers’ lives. P&G’s new CEO AG Lafley has identified product innovation as a key focus for P&G in order to grow sales.
