Increased investment in plant-based technology by Unilever
According to Unilever’s CEO Alan Jope, the market for plant-based foods is expanding and presents a significant competitive advantage for the company. On February 16, Mr. Jope gave a Zoom presentation to the Consumer Analysts Group of New York.
Foods and Refreshment is a smaller category compared to non-food categories, but it makes up 38% of Unilever’s annual sales.
According to Mr. Jope, the business “reaches 2.5 billion consumers every day” overall. According to him, Unilever operates in 107 countries and its products are available in 191 of them. Sixty percent of the company’s revenue comes from emerging markets.
He declared, “We have several distinct leadership positions.”
Six of the company’s 13 brands, which generate sales of at least €1 billion annually, are associated with food and beverages. These brands include Magnum, Sunlight, Knorr, Lipton, Hellmann’s, and the “Heartbrand” that unites several of the ice cream brands. Unilever brands like Knorr have annual global sales of more than €4 billion.
According to Mr. Jope, Unilever is dedicated to enhancing its plant-based product portfolio.
“In order to provide vegetarian and vegan options with superior taste and texture, we use our plant protein structuring capability in foods on our core brands, like Hellman’s,” Mr. Jope stated. “We have been able to increase our competitive wins in product testing thanks to this science-based innovation, and as a result, almost two thirds of the products in our three-year program for product evaluation are now outperforming their head-to-head benchmark. We have decided to invest in a step-by-step increase in R&D spending over the next three years, starting from a strong base.
He gave the company’s recently opened Wageningen, Netherlands, food innovation center as evidence of that dedication.
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According to Chief Financial Officer Graeme Pitkethly, Unilever’s North American market fared the best during the pandemic and was indicative of other regions in which the company operates. Nineteen percent of sales are in North America. With 29% of sales, in-home food was the second most advantageous product category among its categories during the pandemic, only ahead of hygiene products. The company’s greatest disadvantage was its out-of-home food business, which accounted for less than 5% of sales.
“Some markets and categories, like hygiene and North America, have benefited greatly from restricted living and consumers spending more time at home, consuming more food prepared at home, and focusing more on hygiene to stay safe from the pandemic,” Mr. Pitkethly stated. “Although it makes up the majority of our territory, Unilever only accounts for 19% of North America—a lower percentage than many of our competitors.”
Mr. Pitkethly estimated Unilever’s growth at 10%, despite the fact that the North American market grew 15% in the categories in which Unilever operates.
“There is double-digit growth in North America, but it is not as competitive or ahead of the market in other regions,” he stated. “More work to be done.”
In the future, food consumption will progressively return to eating out, according to Mr. Pitkethly, which will help the company’s ice cream and food solutions divisions.