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2023 Top 100: Unilever Sharpens Beauty Focus at Every Price Point

Amidst leadership changes and a host of divestments, Unilever bolstered growth with an edited stable of brands.

2023 Top 100: Unilever Sharpens Beauty Focus at Every Price Point

Dove was one of Unilever’s areas of strategic focus in 2023.

It was another year of upheaval for Unilever.

New chief executive officer Hein Schumacher took the reins in July, revealing a major overhaul to operations in October. After assessing the consumer-goods heavyweight’s operations, Schumacher concluded it had been spreading its resources too thinly, with too many smaller brands and projects competing for attention. He plans to streamline strategy, supply chain and the company’s approach to sustainability.

Unilever is looking to improve execution and become more competitive, increasing investment behind power brands including Dove, Vaseline and Pond’s and transforming its portfolio to become more focused. In its yearend analysts call, new CFO Fernando Fernandez said the firm had been “too slow to respond” to consumers’ shift to higher-end segments in the U.S. and had lost ground to cheaper, private label products in Europe, where consumers have been hit by the cost-of-living crisis.

It is understood brand disposals could be in the works as Unilever seeks to focus on the 30 high-growth brands in its portfolio, which generate more than 70% of its turnover. In beauty, those include Dove, Dermalogica, Paula’s Choice and Pond’s.

The divestments already began last year. Dollar Shave Club was sold to Nexus Capital Management, although Unilever retains a 35% minority stake in the firm, growth for which had fallen short of expectations since Unilever’s acquisition in 2016. In December, a deal was struck to sell the Elida Beauty division, which includes more than 20 beauty and personal care brands including Caress, Timotei and Tigi and represented 2022 sales of around €0.8 billion, to Yellow Wood Partners, with completion expected by mid-2024.

Elsewhere in the portfolio, skin care brands Murad, Carver Korea and Quala are reportedly among underperformers.

At the other end of the scale, Dermalogica, Tatcha, Paula’s Choice and Sundial Brands have been outstripping expectations.

Despite the streamlining, Unilever continued to be active on the acquisition front. In December, it inked a deal to acquire buzzy hair care brand K18 for an undisclosed sum, with the deal expected to close in the first quarter of 2024. The brand is intended to supercharge growth in the Prestige division and leverage K18’s innovation capabilities, which include the global exclusive license for the keratin genome.

Schumacher’s arrival also heralded a wave of management changes, with Fernandez, former head of Beauty & Wellbeing, taking the role of CFO and Priya Nair assuming oversight of the division. Esi Eggleston Bracey, previously general manager of Unilever Personal Care in North America and overall head of U.S. business, was named to the new role of chief growth and marketing officer company-wide.

Last year, for the Beauty & Wellbeing division, underlying sales growth of 8.3% was driven by both volume and price. Hair care saw strong volume sales, and prestige beauty did well. Relaunches in hair and skin care were supported by innovation and increased investment in elevation in key markets. Acquisitions accounted for 1.9% growth.

Hair care grew in the mid-single digits, and performed particularly well in Latin America and Turkey. Sunsilk delivered double-digit growth thanks to its relaunch, and Clear was driven by the launch of a niacinamide-based anti-dandruff formula.

Gains in core skin care were driven by price. Vaseline saw double-digit growth, and broke the €1 billion sales barrier, driven in part by the expansion of its Gluta-Hya range and by the “slugging” trend. In North Asia, AHC declined double digits as the company worked to overhaul its cross-border business.

In prestige beauty, Hourglass, Dermalogica and Paula’s Choice drove gains, and the activity delivered double-digit growth.

Personal Care was led by core brands and innovation, with deodorants seeing the strongest gains, especially in Europe and Latin America, and for the Rexona, Dove and Axe brands. Lux and Dove drove skin cleansing. Overall, the Dove masterbrand generated double-digit sales increases for the Personal Care division.

In December, the U.K. Competition and Markets Authority began a formal investigation into Unilever over alleged greenwashing, part of a broader look into the environmental claims of consumer-goods companies in the U.K. and how they might be misleading to consumers.

Tags

  • Dove
  • makeup
  • skincare
  • Unilever

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