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Ice cream doing well as Unilever shows Q1 growth

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By Jim Cornall+

20-Apr-2017

The refreshment sector, including ice cream, continues to do well for Unilever, which released its Q1 financial report this week.
The refreshment sector, including ice cream, continues to do well for Unilever, which released its Q1 financial report this week.

Unilever published its first quarter financial results this week, with ice cream doing well as the company reports solid growth.

Turnover increased 6.1% to €13.3bn ($14.3bn), and underlying sales growth was 2.9% with price up 3.0% and volume down 0.1%.

The ’refreshment’ category, which includes ice cream, grew by 5% compared to the previous first quarter.

New ice cream success

Growth in ice cream was helped by strong innovations behind premium brands. These included the new Magnum pints, as well as the coconut and raspberry variants.

Ben & Jerry’s grew at double-digit rates, helped by strong performances of the ‘Wich sandwich and the new pint range ‘Topped’.  

Unilever has also extended its less than 50 calories offering under Solero and launched vegan and gluten-free variants under Cornetto.

On track for growth

CEO Paul Polman said the first quarter shows growth reflecting continued investment in both innovations and brand support, and reconfirms the strength of the company’s long-term sustainable compounding growth model.

“The change programme ‘Connected for Growth’, which we started implementing in the autumn last year, is clearly bearing fruit and is making Unilever more agile and closer to the local markets, unlocking both further growth and margin,” Polman said.

He added Unilever is on track for another year of underlying sales growth, in the 3–5% range.

Challenging markets

Unilever said in the markets in which it operates, growth was around 2% with negative volumes.

Markets in Europe and North America declined in the first quarter, while Brazil continued to be adversely impacted by the economic crisis.

As part of Unilever’s strategic review, it announced April 6, 2017 the decision to either sell or demerge its spreads business.

Health and wellness

Ewa Hudson, head of health and wellness at Euromonitor International said despite economic uncertainty in emerging markets, those markets still offer the largest opportunity for growth for Unilever.

“In these markets, consumers’ nutritional awareness is growing,” Hudson said, adding disposable incomes are also on the rise.

“Ageing populations and rising obesity rates are fuelling this,” she said.

She noted while Latin America has increased its share of company health and wellness sales, there is still more work needed in other emerging markets, particularly Asia Pacific.

“Unilever’s food and beverage operations are relatively reliant on mature markets, in particular Western Europe. The company is investing in diversifying away from these markets, but there are still opportunities to expand its coverage.

“Unilever should look to continue expanding its brand portfolio in emerging markets, particularly Latin America, where it has a growing presence and consumer following, and Asia Pacific.”

Hudson said Latin America has also seen growth in sales of health and wellness food, and with a rising overweight population in the region, the company should build on its success and raise consumer awareness of healthier product options to support its weight management brands. 

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