Unilever has confirmed its brand and marketing investment will grow again in 2023 after the FMCG giant ramped up spending by €500m (£442m) last year. More than 80% of Unilever’s 2022 marketing spend went directly into media. Media investment as a percentage of turnover increased in the beauty and well-being, personal care, and home care categories, despite high turnovers driven by price.
Another major area of investment was in digital. The business has invested in 29 digital marketing, media, and e-commerce hubs, known as DMCs. These hubs are aligned with Unilever’s five business units, established last year. The DMCs comprise experts in media, data-driven marketing, and sales, and are designed to deliver “seamless consumer experiences” and optimize investment.
These DMCs represent a key investment to ensure that Unilever continues to win in this important channel of the future,” outgoing CEO Alan Jope told investors today (9 February). The FMCG giant’s “first priority is to invest in the business”, added chief financial officer Graeme Pitkethly. Despite inflationary pressures, he explained the company made a “very substantial investment” in
in marketing this year to ensure the strength of its brands in a challenging environment. In 2021, Unilever’s brand and marketing investment were around €6.9bn (£6.12bn). The brand investment did fall by 10 basis points last year as a percentage of turnover. However, Pitkethly claimed this was “less useful” as a measure given turnover was driven significantly by pricing in 2022. Last year, Unilever’s sales grew 9%, driven by a price growth of 11.3%. Turnover rose by 14.5% to €60.1bn (£53bn) in 2022, while profit increased marginally by 0.5% to €9.7bn (£8.6bn).
“Our growth has been underpinned by bigger, better innovation and a relentless focus on functional product superiority, Across the business, volumes declined 2.1% in 2022, as inflation constrained consumer spending. In the last three months of the year, volumes in Europe declined by 6.8% across all of Unilever’s business groups, while prices increased by 13.2%. Pitkethly did note the business had seen share gains by the private labels in Europe “in most categories.”
Despite upping prices significantly in the fourth quarter across Europe, Unilever maintains it is taking the right approach to price. We are taking price increases responsibly…thereby allowing us to increase investment behind our brands,” Jope added As consumers have returned to in-person shopping, Unilever has seen “more modest growth” in B2C e-commerce, compared to its B2B channels. Despite this softening of demand, Jope reported the business remains committed to digital and e-commerce as a “key source” of future growth. Unilever’s priority digital commerce channels grew by 23% in 2022 and now makeup 15% of turnover. The company’s “billion+ Euro” brands, which account for 53% of group turnover, delivered underlying sales growth of 10.9%. This growth was led by strong performances from OMO, Hellmann’s, Rexona, Sunsilk, and Magnum.
