Unilever personal care, the Anglo-Dutch company’s largest business unit, reported underlying sales growth of 7.7 percent in the second quarter driven greatly by its innovation in hair care.
The recently unveiled Dove Intense Repair range, along with Men+Care hair care, TRESemmé Keratin Smooth and continuing expansion of the Clear Scalp & Hair Beauty Therapy brand all contributed to the segment’s positive performance. Personal care volume in the period rose 6 percent with price increases of 1.6 percent, delivering revenues of 4.6 billion euro, or $6.09 billion at current exchange.
With double-digit increases, emerging markets delivered the bulk of the expansion, and Unilever CEO Paul Polman expects softness in the U.S. and Europe to continue in the foreseeable future. “North America is basically flat,” he said on a conference call. Unilever’s U.S. hair care sales declined 2 percent in the quarter primarily due to retailer destocking following last year’s launches. However, its hair brands continue to build share and the company is now the market leader in the segment. “We are number one in hair care [up] from number three,” he declared.
For the first half, personal care had sales of $12.05 billion with underlying sales up 8 percent and a volume increase of 5.8 percent. Unilever’s “Maxing the Mix” program, which focuses on value-added, higher priced and more profitable products has benefited personal care with a 40 basis point operating margin improvement.
Paul said Unilever has also been hastening its rollout rate pointing to the new Dove range that has hit 12 countries in just two months. It has also has been increasing its advertising and promotional programs, including more heft behind digital, and winning industry accolades. Polman noted that the Dove Real Beauty Sketches spot, which explores how women see their own beauty, became the number-one viewed online video ad of all time.
Overall in the quarter, Unilever’s underlying sales grew 5 percent, falling just shy of analyst estimates of 5.3 percent. Company-wide revenues rose 0.6 percent to $17.6 billion.