Unilever profits from big boost to adspend as it battles global price increases

Unilever says it’s going to spend hundreds of millions more on advertising and marketing as it battles to pass on price increases to hard-pressed consumers and fend off the depredations of own label.

Announcing the consumer goods giant’s half-year results, CFO Graeme Pitkethly said: “We’ve stepped up the investment in our brands. We’re definitely advertising more: we stepped up brand marketing investment by €200mn in the first half.” Pitkethly (below) says Unilever is currently operating in a “truly unprecedented cost landscape” as global inflation hits double figures.

Unilever increased prices for its products 11% in the second quarter of 2022 from a year earlier and, so far at least, this seems to be paying off with quarterly sales up 11.2% in the three months to the end of June at the cost of a 2.1% drop in volume – underlying sales growth of 8.8%. Turnover was up 8.1% in the first half year on year to €29.6bn.

In some ways Unilever is following in the footsteps on historic rifval Procter & Gamble which has kept spending on marketing through thick and thin. Pitkethly’s words will be be manna from heaven for the likes of the IPA’s Paul Bainsfair who regularly reminds advertisers that if they keep spending in hard times then they will accrue benefits later. Unilever, if it continues on its current path, is accruing them now.

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