PARIS — Emerging markets and productivity were key topics covered Wednesday during Deutsche Bank’s 11th annual Global Consumer Conference here.
Unilever chief financial officer Jean-Marc Huet addressed investors’ concerns about the ongoing potential of such markets.
“Emerging markets’ income levels are only going to improve,” he said during a presentation, which was Webcast live. “By 2020, 1.3 billion more consumers will be active in our categories…. It’s a fundamental driver to our business.”
Different levels of per capita consumption in various categories give wide potential for growth, he added. “Turkey would be 11-times bigger if [consumers] used as many deodorants as in Brazil,” he said by way of example, also citing the potential of countries such as Ethiopia, and continuing opportunities for distribution expansion in others, including India, Indonesia and China.
“These markets are very far from maturity,” said Huet. “With the present portfolio, there is so much more to be done.”
Unilever generated 57 percent of its total business across all categories in emerging markets in 2013. The company is planning to double the size of its business over the next few years, and emerging markets are a key part of that strategy.
In developed markets, meanwhile, Huet said Unilever is concerned with maintaining consistent growth in the low-single digits, rather than aiming for higher numbers.
“The cost and investment to grow in developed markets today, especially Europe, is high,” he said. “If we can grow in developed markets 1 to 2 percentage points consistently … I’m happy.” Huet also addressed questions on future acquisition opportunities.
“Bolt-on acquisitions remain absolutely our focus,” he said. “At this point in time, we are very focused on complementary acquisitions to our current portfolio.”
Buys in personal care, such as Alberto-Culver and Tigi, have been important in helping Unilever reduce its dependence on the food category in recent years.
In developed markets, personal care now makes 33 percent of Unilever’s sales, compared with only 24 percent in 2009. Unilever reported 2013 personal care sales down 0.2 percent to 18.06 billion euros, or $23.98 billion at average exchange, although on a like-for-like basis they grew 7.3 percent. Total company revenues fell 2.9 percent to 49.8 billion euros, or $66.23 billion, as reported.
In his presentation, Procter & Gamble chief financial officer Jon Moeller focused on the company’s ongoing work on productivity gains, confirming that it will realize $1.6 billion in productivity savings this fiscal year, which ends June 30, up from previous estimates of $1.4 billion.
P&G is in the process of consolidating its manufacturing operations in the U.S. to multicategory sites to be nearer to consumers and retailers.
“We’re considering a similar strategy in Europe,” said Moeller. “It will leverage the scope of our productivity and distribution structure in a way we never have before.”
He explained that over the decades, P&G has integrated factories in various locations through multiple acquisitions, but that those factories are not necessarily close to population centers.
As for emerging markets, the firm is working “aggressively” to localize production in key growth areas, Moeller said, adding that will help it notably to counter the inflation and currency effects that have hampered business in certain markets in recent years.
“We are building 20 factories in emerging markets,” he said.
The company is entering new businesses while continuing to divest non-core activities. P&G has exited the pet nutrition and bleach categories in recent months, for example.
“[We will announce] a new category entrance in the next four months,” Moeller revealed, without going into more detail.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion