Dove owner Unilever hikes prices as energy costs surge

Unilever, the owner of Dove, increased its prices this summer in an effort to counteract the impact of surging energy costs resulting from the Iran war. The FTSE 100 consumer goods business disclosed on Wednesday that its prices had risen by 2.3% during the third quarter, as its volume growth slowed from 5.5% to 2.9%. The Anglo-Dutch firm has been dealing with higher expenses since oil prices jumped following the onset of the Iran war, leading to increased ingredient and shipping costs.

Chief executive Fernando Fernandez stated, "We have delivered another quarter of competitive growth, led by continued strong volume delivery and a step up in price to offset the impact of higher commodity costs." Unilever, which recently agreed to sell its food division to US company McCormick for $45 billion in March, is aiming to concentrate on its health and beauty products, including Dove, Tresemmé, and Vaseline.

Sales in the home care segment surged by 9%, while growth was recorded at 5.7% and 6.3% in beauty and wellbeing, and personal care. However, Unilever's growth was restrained by its food arm, which saw sales increase by only 0.1% in the quarter, down from 1.2% in the first half of the year, when food was already the company's weakest performer.

The firm also highlighted challenges in the US food market, where it is facing fiercer competition in the condiments sector and has decided to implement strategic price reductions to stimulate sales of these products. Additionally, Unilever experienced a 0.9% decline in sales in its developed markets, including a 1.7% drop in Europe, due to a "soft market environment."

Despite these setbacks, Unilever recorded a 9.5% increase in underlying sales in its emerging markets, with double-digit growth in India, Turkey, Vietnam, and Pakistan. Volumes rose by 6% while prices climbed by 3.3% in these markets. The company mentioned that the sale of its food arm, encompassing Marmite, Hellmann’s, and Bovril, is advancing well and is expected to conclude in the middle of next year.

Analysts at RBC Capital Markets commended Unilever for delivering a "decent" third-quarter performance, stating that sales growth in emerging markets and home care "outpaced" the slowdown in developed markets and the food division.