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Unilever sees demand for comforting ice cream push up sales while at-home eating grows during pandem

foodingredientsfirst 2020-10-22
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Unilever has reported an underlying sales growth of 4.4 percent in the third quarter of this year as at-home eating occasions were sustained at elevated levels. The Hellmann’s brand showed growth with its vegan version now available in 30 markets, while in-home sales of ice cream also grew, offsetting loses felt in the out-of-home ice cream market.

While facing COVID-19 headwinds, the company saw double digit growth for its retail foods segment.

“We have delivered a strong performance this quarter. Volume-led growth shows the resilience of our portfolio and our agility in responding to rapidly changing dynamics across consumer segments, geographies and channels,” says Alan Jope, CEO of Unilever.

The food giant highlights that COVID-19 continues to influence consumer behaviors and channel dynamics in its active markets. The company’s e-commerce business saw an uptick of 76 percent.

In North America, market growth continued to be driven by elevated demand for foods consumed at home. 

In Europe, volumes grew despite seeing a negative impact from out of home ice cream and food service, although this was more than offset by increased pressure on price, driven by a step up in promotional intensity.

Emerging markets grew 5.3 percent, a growth in China improved slightly compared to the second quarter. 

After strict lockdown measures earlier in the year, India saw a pick-up in economic activity, even though cases of COVID-19 continued to increase. Meanwhile, Indonesia and Latin American markets contracted in the third quarter.

Turnover decreased 2.4 percent, with Unilever noting a positive impact of 1.3 percent from acquisitions net of disposals and a negative impact of 7.7 percent from currency.

Category performance
Unilever’s Foods & Refreshment segment underlying sales grew 3.7 percent, with 1.8 percent from volume and 1.8 percent from price.

The company’s retail foods business grew double digit and tea saw mid-single digit growth as at-home consumption spiked during global lockdown measures. The Hellmann’s brand of mayonnaise, dressings and spreads saw mid-teens growth.

Sales of ice cream grew, driven by both volume and price. Mid-teens growth of in-home ice cream, led by brands including Ben & Jerry’s and Magnum, reportedly “more than offset” the decline in out-of-home ice cream sales reported earlier this year.

Unilever’s food service channel remained fully or partially closed in many markets and food service sales saw a decline of more than 20 percent. However, the company notes that these trends continue to improve with China now returning to growth.

The company further highlights good progress in integrating the Horlicks business. It continues to implement the separation of its tea businesses, which was announced in January.

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