Unilever promises marketing blitz

11 May 2009

LONDON: New Unilever chief executive Paul Polman is promising a second quarter marketing blitz to "re-ignite volume growth" after the company reported mixed results in the first quarter of this year.

Polman, who controversially scrapped a number of financial targets on taking over at the Anglo-Dutch consumer goods giant, says he will "step up innovation and brand support from the second quarter and expect this to drive improved volume performance."

Unilever's profits fell 43% to €803m ($899m, £716m) in the first quarter of 2009 as sales volumes in Western Europe, which accounts for about a third of its total, fell by 2.8% and prices by 1%. But sales and prices in developing markets and the Americas rose strongly, allowing the company to report overall underlying sales growth of 4.9%.

Polman said the company would seek to plug competitive gaps and lay greater emphasis on speed to market as it competes with rivals Procter & Gamble and, in the household sector, Reckitt-Benckiser.

He announced a licensing deal with Starbucks to make and market Starbucks-branded ice cream and also said the company planned to introduce a women's deodorant that would cause unwelcome underarm hair to drop out.

The company, whose brands include Ben & Jerry's, Hellman's, PG Tips, Axe/Lynx and Sunsilk, is putting more emphasis on its value products as consumers remain careful about expenditure. Its lower-priced Surf washing powder was one of its stronger performers in Western Europe over the period.

More evidence of the pressure on premium products emerged as drinks giant Diageo reported its first quarter sales had dropped by 7% which it blamed on distributors de-stocking. Vodka sales in Russia were particularly hard hit by cheaper local brands.

Data sourced from Financial Times; additional content by WARC staff