Ida Axling
Jul 28, 2022

Unilever highlights Hellmann's purpose campaign as brand reports growth

Unilever was accused of having 'lost the plot' by a major shareholder in January for its campaign defining the purpose of Hellmann’s mayonnaise.

Unilever highlights Hellmann's purpose campaign as brand reports growth

Unilever has reported that its Hellmann’s mayonnaise brand achieved double-digit growth in the first half of 2022, supported by its global purpose-driven campaign “Turn nothing into something”.

The news follows criticism from one of Unilever’s major shareholders, who in early January said the company had “lost the plot” after it performed badly for his fund.

Terry Smith, founder of fund manager Fundsmith, took particular issue with the Hellmann’s messaging. In the UK, the brand has run the “Cook clever, waste less” campaign, aimed at tackling food waste.

In a letter to investors at the time, Smith wrote: “A company which feels it has to define the purpose of Hellmann’s mayonnaise has, in our view, clearly lost the plot. The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert – salads and sandwiches).”

He also pointed to examples including Unilever's refusal to supply Ben & Jerry’s ice cream in the West Bank – an Israeli-occupied Palestinian territory.

Smith’s comments do not seem to have resulted in a strategy change at Unilever. In May, speaking at Campaign’s Media360 event, Aline Santos, Unilever's chief brand officer and chief equity, diversity and inclusion officer, highlighted the importance for brands to take a stand on social issues

“Consumers expect brands to stand for social issues; it’s becoming more and more important,” she said.

Increase in adspend

Overall, Unilever reported a turnover of €29.6bn (£24.9bn) for the first half of 2022 – a 14.9% increase on the first six months of 2021 – as well as underlying sales growth of 8.1%. 

Operating profit grew by 1.7% to €4.5bn. However, sales volumes were down, which Unilever said was due to price increases driven by the cost-of-living crisis.

In a results call with analysts on 26 July, Graeme Pitkethly, Unilever’s chief financial officer, said its brand and marketing spend was up by €200m on last year in efforts to stop consumers from switching to supermarket own-brand products.

Pitkethly added that the company will continue its investment in advertising in the second half of the year as he expects inflation will continue. 

Commenting on the results, Unilever's chief executive, Alan Jope, said: “Unilever has delivered a first-half performance which builds on our momentum of 2021, despite the challenges of high inflation and slower global growth.

“Underlying sales growth of 8.1% was driven by strong pricing to mitigate input cost inflation, which, as expected, had some impact on volume. We are now raising our sales guidance for the year.”

Source:
Campaign UK
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