Unilever To Cut Brand Portfolio
ROTTERDAM, Netherlands (AP) _ Anglo-Dutch consumer products conglomerate Unilever NV plans to cut its brand portfolio to a core of 400 products from its current lineup of 1,600 brands.
Unilever, the world’s largest maker of household goods, said today the move will simplify its supply chain and help it cut costs by $1.4 billion within three years.
It did not elaborate on which brands would be eliminated, but said the new lineup would include brands which are No. 1 or 2 in their respective markets.
Unilever’s brands include Lipton tea, Breyer’s ice cream, Flora margarine, Wisk washing detergents, Calvin Klein perfumes and the Bird’s Eye and Gorton’s frozen foods lines.
Within the new portfolio, there will be several ``power brands″ which will have worldwide reach, the company said.
``Over the next three to five years, we will redirect resources in the areas of marketing, innovation and personnel behind this focused portfolio, which will lead to increased rates of growth,″ Unilever said in a statement. ``Within that time frame, the aim will be to grow the power brands at between 6 percent and 8 percent per year _ in some cases even faster.″
Darrell Duthrie, an analyst at MeesPierson in Amsterdam said Unilever almost certainly would discontinue the brands outside its new core group of 400 rather than sell them off ``and give their competitors a step up.″
``They probably don’t know completely yet″ which brands will be retained and which will be dumped, Duthrie added. He said labels to be discontinued most likely would be national or regional brands, and that the selection process likely would take several years.
``It’s difficult to maintain focus when you have so many brands,″ he said.
Unilever said it expects to improve operating margins by 0.5 percent a year over the next 5 years in a push to become what co-chairmen Niall FitzGerald and Antony Burgmans called ``leaner, fitter and faster.″
Last month, the company posted an 11 percent jump in net profit for the second quarter to $727 million, citing strong sales in Asia, North America, Africa and the Middle East.