кейси для індивідуальної роботи 2014 н.р. / UNILEVER GROUP IN HOT DRINKS

SCOPE OF THE REPORT

Scope

This global profile focuses on the industry trends in coffee and tea.

All values expressed in this report are retail/off-trade in US dollar terms using a fixed exchange rate (2011).

2011 figures are based on part-year estimates.

All forecast data are expressed in constant terms; inflationary effects are discounted. Conversely, all historical data are expressed in current terms; inflationary effects are taken into account.

Hot Drinks

US$125.9 billion

Disclaimer

Much of the information in this briefing is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability, Euromonitor International cannot be held responsible for omissions or errors.

Figures in tables and analyses are calculated from unrounded data and may not sum. Analyses found in the briefings may not totally reflect the companies' opinions, reader discretion is advised.

Unilever continues to rely on an organic growth strategy to grow its hot drinks business with no major acquisitions made for tea for many years. The company is confident that it can grow its revenue by developing its core Lipton brand globally and exploring its white spaces. However, it could be a challenge to improve its position in the overall hot drinks market without a major acquisition, as Nestlé has strong leadership in coffee, which is Unilever's weak spot.

STRATEGIC EVALUATION

Key company facts

Unilever Group

Headquarters: UK

Western Europe, North

America, Latin America, Regional involvement: Asia Pacific, Eastern

Europe, Middle East and Africa, Australasia

Unilever's total turnover was fuelled by its outstanding performance in emerging markets, such as India, China, Turkey and South Africa, in which the company registered double-digit growth. Emerging markets now account for 54% of Unilever's turnover. Unilever's developed markets total saw subdued growth at 0.8% in 2010-2011.

Unilever has four main divisions: Personal Care; Home Care; Foods; and Refreshment. Refreshment accounts for 19% of the Group's turnover and hot drinks is included in this division. Its biggest fmcg developed markets - the US, Germany, the UK and France - which represent 61% of its developed world business, grew between 1% and 4% in 2011.

Unilever has global coverage for its tea business and maintained strong leadership in tea in 2011.

In 2010-2011, Unilever was busy acquiring and integrating Sara Lee's Personal Care and European Laundry business and disposing of Sanex. The company appears to be relying on organic growth for its tea business and made no major acquisitions.

STRATEGIC EVALUATION

Financial assessment

Like all other fmcg companies, Unilever faced tough economic conditions in 2011. Against this background, Unilever saw its underlying sales grow by 6.5%, driven by outstanding performance in emerging markets and in the Home Care and Personal Care divisions. Unilever appears to be moving towards development of Personal Care, which contributes the most revenue and generates a much higher operating margin (18%) than Refreshment (10%).

In Foods and Refreshment, while price increases impacted volumes in 2011, growth was in line with their relevant markets. Volume growth overall was 1.6%, a step down from 2010 but broadly in line with the relevant markets. Unilever's ability to increase prices during a weak economic climate was partly due to its strong brand building and consumer loyalty. It was able to increase prices more than its rivals in a number of categories.

Refreshment include sales of ice cream, tea-based beverages, weight management products, and nutritionallyenhanced staples sold in developing markets. This division was previously called Ice Cream and Beverages. Hot drinks does not appear a core category within Refreshment and there are typically few references to it within the annual report.

Unilever: Turnover Breakdown by Division 2011

Personal Care

Home Care

Foods

Refreshment

Source: Unilever annual report 2011

 Refreshment saw mixed performance in 2011, resulting in underlying sales growth of 4.9%. Ice cream progressed well driven by innovation and new market launches. Ice cream saw strong gains, especially in Latin America and Southeast Asia, but tea shares were down overall, particularly in the US.

Restructuring

 One of the main reasons behind Unilever's major overhaul in recent years, which has included a string of high-profile divestments, has been a desire to focus its efforts on its core brands and categories. The company is also restructuring its supply chain and executing its One Unilever plan, with the aim of improving productivity and efficiency. The corporate objective is to double its revenue by 2020 and growth will come primarily from its own brands rather than acquisitions.

Emerging markets

 The mature market of Western Europe continues to pose challenges for Unilever, while it is making a second attempt to enter Germany's tea market. Meanwhile, however, sales continue to show good growth in emerging markets, notably Asia Pacific. Unilever will likely continue to see the geographic spread of its sales shift to emerging markets and needs to be prepared for the logistical and marketing challenges this is likely to present.

Lipton-only focus for Unilever

 Unilever's recent acquisitions in personal care and professional hair care show that hot drinks is not a key focus for M&A. Its acquisition activity is clearly driven by its portfolio strategy with a clear and defined evaluation process. With the exception of the Lipton brand, which it has identified as one of only 11 company brands that achieved sales of €1 billion in 2010, Unilever has not invested heavily in its other hot drinks brands.

Sustainability in tea

 As in coffee, sustainability and ethical sourcing have grown in profile in tea. Unilever has made a commitment that by 2015 all of its tea and palm oil will be sourced from certified sustainable sources. The company has two sustainability leadership groups: Unilever Sustainable Development Group (USDG) and the Unilever Sustainable Living Plan (USLP) Steering Team. Insights from these groups help keep the Board informed of current and emerging trends and any potential risks arising from sustainability issues.

% y-o-y growth

Hot Drinks: World Top Four Companies vs Global Market Growth (US$ mn RSP) 2006-2011

12

10

8

6

4

2

0