Unilever United States, Inc. at a Glance

Uppers

  • Responsible for over 400 of the world's leading nutritional and healthcare brands
  • Well-regarded for its efforts in sustainability

Downers

  • Faces stiff competition from Procter & Gamble
  • Many employees feel a sense of job instability due to multiple acquisitions and several corporate restructurings

The Bottom Line

  • An industry leader, Unilever promotes a positive work environment and offers its employees flexible work schedules and great benefits. However, the company expects a high level of performance--not to mention long hours--in return.

About Unilever United States, Inc.

From Dove soap to Ben & Jerry's ice cream, Unilever PLC manufactures more than 400 different food and personal care products that are used by 2.5 billion people worldwide every day. The consumer products giant is one of the top manufacturers of dressings, savory condiments, and spreads with billion-dollar brands Hellmann's and Knorr. Other top products include ice cream (Breyers, Magnum, and Ben & Jerry's), tea (Lipton), razors and blades (Dollar Shave Club), and soaps (Dove, Lux). UK-based Unilever PLC operates jointly with its Netherlands-based counterpart, Unilever N.V., as the Unilever Group, which has a single board of directors and one set of financial statements. In early 2017 Kraft Heinz withdrew a $143 billion takeover offer for Unilever after Unilever management and stockholders protested, claiming the bid underestimated its value.

Operations

Unilever is organized around four main product groups. Roughly 35% of its revenue is generated by the Personal Care segment, which includes skin and hair care products, deodorants, and oral care products. Another third comes from Foods, which consist of snacks, soups, bouillons, sauces, margarines, mayonnaise, salad dressings, and spreads.

The Refreshment segment brings in nearly 20% of sales, and includes ice cream, teas, weight-management products, and nutritionally enhanced staples for sale in emerging markets. The Home Care segment brings in the remainder of revenue, and consists of a variety of cleaning products, washing powders, liquid and capsule detergents, and soap bars.

Geographic Reach

Unilever has operations in more than 100 countries and sells its products in nearly 200. It generates about 45% of revenue from the collective markets of Asia, Africa, the Middle East, Turkey, Russia, Ukraine, and Belarus. Other major markets include the Americas (about 30%) and Europe (about 25%).

The company touts its strength in emerging markets (which accounts for more than 55% of revenue), which represents great opportunity although recent growth has been weaker than expected.

Sales and Marketing

Unilever's products are generally sold through its own sales force as well as through independent brokers, agents and distributors to chain, wholesale, co-operative and independent grocery accounts, food service distributors and institutions. Products are physically distributed through a network of distribution centers, satellite warehouses, company-operated and public storage facilities, depots and other facilities.

E-commerce is an increasingly significant distribution channel. This channel grew 49% in 2016, and the direct-to-consumer channel expanded significantly, mainly through Unilever's acquisition of Dollar Shave Club.

Financial Performance

Note: Growth rates may differ after conversion to US dollars.

Amid a stagnant global economy and changing consumer tastes, Unilever Group has struggled to get on a growth trajectory. Revenues dropped 6% from 2012 through 2014, and although they jumped in 2015, they fell again in 2016, declining a percentage point to €52.7 billion

Three of the company’s four segments – Refreshment, Home Care, and particularly Foods -- experienced sales declines in 2016 mainly due to the effects of unfavorable currency fluctuations. The Personal Care segment was essentially flat (up half a percentage point), bolstered slightly by acquisitions. Underlying sales growth (minus acquisitions, divestitures, and currency fluctuations) was up about 3.5% in 2016, although that was driven primarily by price increases.

Net profit was up about 5% in 2016 to €5.5 billion as a result of cost savings programs and cash from operations was flat at about €9.3 billion.

Strategy

Unilever began 2017 by fighting a $143 billion takeover bid from Kraft Heinz (which would have been the largest takeover in the industry, combining dozens of global household names) and vowing to follow its own path to growth as consumer goods companies, particularly those involved in packaged foods, grapple with competitive and pricing pressures and the movement of consumer tastes toward sustainability and fresh foods. The industry is rife with consolidation, cost-cutting measures, and an intense focus on core brands.

Since rejecting the Kraft Heinz offer, Unilever has stepped up its cost-cutting efforts. With plans to cut €6 billion from operational costs by 2020, the company has slashed its advertising budget and reduced staff, among other savings initiatives. In addition, Unilever is combining its Foods and Refreshment segments and is re-evaluating its dual-listing structure. In mid-2017 it confirmed plans to divest its margarines business, a historical cornerstone for the company that includes the Flora, Country Crock, and I Can’t Believe It’s Not Butter brands.

Facing stiff global competition from giants such as Nestle, Procter & Gamble, Mondelez, and of course Kraft Heinz, Unilever is looking to quickly add big names to its stable of brands, a task that is easier to complete through acquisition than internal development. The company is focused on well-known brands or those that appeal to new customer tastes, particularly those of the Millennial generation, estimated to comprise nearly 2.5 billion people by 2025. To that end, Unilever has been actively pursuing acquisitions across all its segments.

Mergers and Acquisitions

In mid-2017, Unilever made a $2.9 billion bid for Reckitt Benckiser Group's food division, which produces French's mustard. However, McCormick & Company, the world's #1 spice maker, outbid Unilever after agreeing to acquire the division for $4.2 billion.

Also that year, Unilever announced it was acquiring Hourglass, a maker of luxury cosmetic products. Unilever will be adding Hourglass to its portfolio of Prestige brands, specifically its colour cosmetics category. This product line has exhibited high growth-rates that are driven by social media content and channel diversity.

A few months earlier, Unilever agreed to acquire the personal care and home care brands of Quala, a Latin American consumer goods company. Inheriting Quala’s brands will give Unilever an even stronger springboard for growth in Latin America, broadening its offerings in Mexico, Colombia, and Ecuador.

In 2016 Unilever acquired start-up razor manufacturer Dollar Shave Club for $1 billion in cash. Founded in 2011, Dollar Shave Club built its business selling inexpensive men's razors exclusively through digital commerce sites. The acquisition bolstered Unilever's presence in the online sales space; the company traditionally sells its products through brick-and-mortar retailers, where profit margins can be smaller.

Earlier that year the company picked up plant-based household products maker Seventh Generation for $700 million. The acquisition brought to Unilever's Home Care business a well-established line of eco-friendly detergents and household cleaners. The addition also complemented the company's sustainable living public relations initiative, which is rooted in "purpose-driven" products like Ben & Jerry's, Dove, and Seventh Generation.

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Unilever United States, Inc.

700 Sylvan Ave
Englewood Cliffs, NJ 07632-3113
Phone: 1 (201) 894-4000
Fax: 1 (201) 871-8257

Stats

  • Employer Type: Public
  • Senior Vice President Finance: John Bird
  • Director: Eileen Griffin
  • President Americas: Dave Lewis
  • Employees: 13,000

Major Office Locations

  • Englewood Cliffs, NJ
  • Dallas, TX

Other Locations

  • Stockton, CA
  • Hammond, IN
  • New York, NY