Unilever pushed up its brand and marketing spend by €500m (£443m) in 2022 and has vowed to continue investing in its brands in 2023.
Looking at the year ahead, the Anglo-Dutch FMCG giant said it would continue to drive cost savings on making its products, so it could “invest behind [its] brands and deliver improved margin”.
This promise builds on a similar commitment made in 2022, when the company pledged to increase brand investment in the second half of the year following a surge in brand revenue.
For its full year, Unilever reported a rise in net profit of 24.9% in 2022 to €8.3bn, a performance it said was bolstered by strong sales from Omo, Hellmann's, Rexona, Sunsilk and Magnum. The full year’s turnover clocked in at €60.1bn (unaudited).
It also warned that prices for goods would continiue to rise in 2023 in spite of easing inflation and price increases in 2022. Prices were up 13.3% in the third quarter and 11.3% over the year – to the detriment of consumer demand, which saw volumes fall 2.1%.
Unilever’s chief executive Alan Jope said: “Despite sharp rises in material costs, we have prioritised stepping up our brand and marketing investment.”
Jope added that he expected to see more growth in 2023: “We continue to improve our growth profile, with the sale of the global tea business and the acquisition of Nutrafol. We are increasingly realising the benefits from the reshaped portfolio, accelerated savings delivery and improved execution.
“There is more to do, but the changes we have made mean that we start 2023 with momentum, setting us up well for delivering another year of higher growth, which remains our first priority."
Jope will step down this year, and will be replaced by Hein Schumacher in July.
Chris Daly, CEO of the Chartered Institute of Marketing, noted that "despite some criticism from investors over its ‘purpose-driven’ approach, Unilever has continued to prioritise social responsibility through sustainable products and value-led messaging".
This was a reference to Unilever’s focus on purpose and sustainable living for some of its brands, a strategy that sparked the indignation of at least one shareholder, Terry Smith, who last year said the company had “lost the plot” over its sustainability messaging.
Daly continued: “Unilever’s success shows that there is still consumer demand for businesses to be more sustainable, despite increased costs - something other organisations should be aware of.”
Daly did highlight upcoming challenges and changes for Unilever though, including continuing shortages, the cost of living crisis and new chief executive, Hein Schumacher, taking over in July this year.