Innovation boosts Unilever in third quarter

by Monica Watrous
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Hellman's squeezable mayonnaise and Ben & Jerry's cookie core Spectacular Speculoos ice cream, Unilever
Unilever recently introduced squeezable Hellman’s mayonnaise and Ben & Jerry’s Cookie Core ice cream.

LONDON — Recent product launches, including squeezable Hellman’s mayonnaise and Ben & Jerry’s Cookie Core ice cream, helped Unilever P.L.C. drive growth despite market challenges in the recent quarter.

The company reported underlying sales growth of 5.7% for the third quarter, taking year-to-date growth to 3.8%. The quarterly performance was driven by strong ice cream sales, advanced sales in Latin America and a soft comparator from trade destocking in China in the year-ago quarter. These factors contributed to Unilever’s personal care, home care and refreshment brands but bore no impact on foods, said Graeme Pitkethly, chief financial officer, during an Oct. 15 earnings call with financial analysts.

“Importantly, our competitiveness has improved, and after three quarters in which our growth was no more than in line with our markets, we are now gaining share once again,” Mr. Pitkethly said. “All four categories are growing, and the portfolio as a whole is demonstrating its resilience with the overall delivery becoming increasingly robust. Our innovation is getting stronger, incorporates more differentiated technologies and is more and more aligned behind the category strategies.”

Graeme Pitkethly, Unilver
Graeme Pitkethly, chief financial officer of Unilever

New premium ice cream products from Magnum, Ben & Jerry’s and Breyers Gelato brands led to underlying sales growth of 3% in North America during the quarter.

“We continue to add to the portfolio at the super-premium end with the acquisition of Grom, just announced, and through Talenti, acquired at the end of last year, so not yet in our underlying sales growth but up by more than 40% as we expand its distribution,” Mr. Pitkethly said. “The new Ben & Jerry’s Cores range, with a central cookie core, has helped sustain the double-digit growth rates that this premium brand has consistently been achieving.”

Unilever also plans to add more premium products to its tea portfolio, including the introduction of new Lipton specialty teas in various markets.

Lipton Specialty teas
Unilever plans to add more premium products to its tea portfolio, including the introduction of new Lipton specialty teas in various markets.

“Tea continues to grow solidly but not yet to the potential of this attractive category,” Mr. Pitkethly said. “Our portfolio remains heavily weighted to traditional, mainstream black tea, while the growth lies elsewhere in the tea category. We are focused on addressing this and now have a much stronger innovation program as we build our presence in the more on-trend segments.”

For the full year, company executives expect to deliver underlying sales growth of 2% to 4%.

“Strong innovations, our approach of sustaining investment to drive consistent top- and bottom-line growth, a resilient portfolio and sharper category strategies position us well to deliver long-term value creation into the future,” Mr. Pitkethly said.
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