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Unilever says its current brand and marketing investments are at the “right level”, although it admits it must raise product prices due to rising raw material costs.

Speaking to an investor call this morning (October 21) to announce third quarter results, CFO Graeme Pitkethly said Unilever will continue to invest in its brands and support “long-term health,” claiming the company is experiencing product testing “wins “. “Against competitors and” healthy brand power measures “.

“Over 80% of our sales have been stable or growing brand power, and our percentage of advertising spend relative to our market share is well above the 100 index,” said Pitkethly.

“Although there were significant differences between H1 and H2 in the BMI spending phase split in 2020, we believe that the investment amount for the full year was about the right level and we are trying to keep it at a broadly similar level this year to keep.”

Earlier this week, rival Proctor & Gamble pledged to increase digital marketing spending and maintain marketing levels despite rising commodity prices.

It is a myth that ecommerce’s infinite shelf favors medium and small brands.

Alan Jope, Unilever

Third quarter sales were € 13.5 billion (£ 11.3 billion), up 4% over the same period in 2020. Sales for the last nine months rose 1.7% to 39, € 3 billion (£ 33.1 billion).

Alan Jope, CEO of Unilever, said e-commerce is “strengthening” the larger brands of the FMCG giant.

“It’s a myth that the infinite shelf of e-commerce favors medium and small brands. E-commerce is very cheap for relevant big brands – they are the first to find them [engines] and shopping lists, ”said Jope.

Unilever’s overall e-commerce business grew 38% in the third quarter, which Jope said was “way ahead of the market”. E-commerce now accounts for 12% of total sales, up from 11% in the previous quarter.

Digital skills were highlighted as a key skill that will be expanded this year. In April, Unilever accelerated its employee e-commerce learning program, resulting in more than 15,000 certifications to date. In addition, 80% of employees now feel “strongly connected to the business”.

“This [staff engagement] is well in the top quartile of benchmark companies. And it’s worth noting that engagement has increased significantly with Covid and the challenges of remote working, ”added Jope.

Chris Daly, CEO of the Chartered Institute of Marketing, said, “Unilever has identified e-commerce as an important channel for the future – not just for sales, but also for advertising. His strategy is evolving and moving away from traditional platforms like TV and towards gaming and streaming platforms. “

He also pointed to working with the video games Fortnite and Animal Crossing as future marketing strategies that will “pay off in the future” by attracting younger consumers.

Focused innovation

Pitkethly also noted the “tremendous activity and change” in Unilever’s research and development department. He stated that innovation in science and technology has been “fully screened” to make work “more focused and strategic”.

“The overall shape of R&D spending looks very different today compared to three or four years ago,” said Pitkethly.

He pointed out that the brand is adopting new technology to conduct 12,000 digital experiments on products rather than physically doing them. The benefit is that this approach reduces costs, test times, and the time it takes to land on the shelves.

P&G promises to increase its digital marketing spend in the face of growing cost pressures

“We are also building automated technology into our innovation centers, such as our materials innovation factory in the UK. There are a large number of robots doing the materials chemistry work for us and they generate lots and lots of data much faster than traditional methods, ”explained Pitkethly.

The company has also worked with outside partners to develop “great science” in products and packaging for brands like Dove and Persil, with 70% of innovations coming from outside collaborations.

“What we see is great science infiltrating our innovations. Examples of major focus areas are next generation biology, such as the microbiome, biotechnology and surfactants, ”added Pitkethly.

“Almost everything we do has sustainable packaging and a sustainable format angle. We think this is very important for consumer preference in the long run. “