Unilever_in_beauty_and_personal_care_(world)

UNILEVER IN BEAUTY AND PERSONAL CARE (WORLD) October 2020

SCOPE OF THE REPORT

Scope Disclaimer Much of the information in this briefing is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability, Euromonitor International cannot be held responsible for omissions or errors. Figures in tables and analyses are calculated from unrounded data and may not sum. Analyses found in the briefings may not totally reflect the companies’ opinions, reader discretion is advised.

Unilever’s beauty and personal care sales are likely to remain mostly shielded from the impact of COVID19, owing to its strong offering in mass and core products. Expansion of its premium portfolio into China offers opportunities for growth, as does its bath and shower portfolio, which has a strong leaning towards hand hygiene. CSR efforts in light of COVID-19 offer brand equity, although this has been partially dampened by controversy surrounding the company’s Fair & Lovely range.

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INTRODUCTION

Executive summary Mass portfolio to drive growth in light of COVID-19 recession

Unilever’s primarily mass portfolio, which focuses on personal care products and necessities, is set to shield the company from the effects of a recession in light of COVID-19, particularly in hand hygiene. However, the company remains somewhat limited by its e-commerce capabilities, as consumers change how they shop. Growth driven by hair care Unilever struggled to gain market share over the review period, losing share in and market momentum skin care and bath and shower. This is despite acquisitions in the high growth area of premium skin care, with growth remaining driven by market momentum. However, hair care somewhat compensated for this with share growth, adding USD1.4 billion in sales between 2016 and 2019. Emerging markets continue India, Brazil and Argentina were strong growth markets for the company in the to drive growth review period, and are expected to continue to be so. Unilever has a strong mass portfolio in these three markets, with the Dove, Lux and Sunsilk brands having a presence in each of them. Premium expansion in China Planned expansion of Unilever’s premium portfolio into China, amid changes in offers opportunities animal testing regulations, provides opportunities for the company, whilst increasing its competitive overlap between competitors in the premium segment. Brand gains equity through COVID-19 response

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The company’s extensive CSR efforts in light of COVID-19 give it strong brand equity, as consumers increasingly favour brands with purpose. These efforts include monetary and product donations across its brands, public service announcements and community building communications.

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STATE OF PLAY

EXPOSURE TO FUTURE GROWTH COMPETITIVE POSITIONING HAIR CARE BATH AND SHOWER OTHER CATEGORIES KEY FINDINGS APPENDIX

STATE OF PLAY

Top companies at a glance

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STATE OF PLAY

Unilever Group’s global footprint

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STATE OF PLAY

Hair care continues to lead, while deodorants show potential ▪ Unilever Group’s portfolio is largely positioned in the mass segment, with 88% of the company's sales in mass beauty and personal care in 2019. Growth for the company also remained faster in the mass segment in 2019, with 4% year-on-year growth, driven by strong growth in Asia Pacific and Latin America. This growth was in line with that of the mass beauty and care industry overall, while growth in the company’s premium portfolio remained below that of the industry. ▪ Hair care remains the largest category for the company, with the category accounting for 30% of sales globally in 2019, and adding USD1.4 billion in sales between 2016 and 2019. ▪ Unilever Group’s reach spans all regions. The US remains a key market, with company sales in 2019 being twice those in its second largest market, Brazil. In the US, Unilever Group remains focused on hair care and bath and shower, through the brands Dove and Suave, while deodorants is its focus category in Brazil, with the company owning five of the top 10 deodorant brands in the country.

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STATE OF PLAY

Growth led by market momentum as market share struggles ▪ Growth in the review period was largely driven by market momentum, with Unilever Group’s broad portfolio benefiting from growth in a number of key categories. The company did, however, lose share or remain static in the high growth skin care category in all regions, as well as losing share in other key categories, such as bath and shower. ▪ Acquisitions for Unilever have been focused on key areas of growth, including the natural brand Equilibra, the direct-to-consumer (D2C) subscription brand Dollar Shave Club, and Shea Moisture, which focuses on the needs of naturally curly hair. ▪ Historically, Unilever Group has also focused on the premium segment, acquiring Murad, Ren and Dermalogica in 2015, with Living Proof acquired in 2016 and Hourglass in 2017. Further inroads were made in premium skin care in 2019, with the company acquiring Tatcha and Garancia. The company has, however, reported mixed performances across these premium brands, and, as consumers have begun to trade down in light of COVID-19, the outlook for these brands is less strong.

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STATE OF PLAY

Consumer perceptions of top Unilever brands Showing the Percent of Brand Users Who Associate Brand With Listed Trait Hair care brands

Skin care brands

Colour cosmetics brands

Suited to hair/skin type and concerns Effective High quality Clear benefits Natural/organic ingredients

Professional image Scientific formulation Luxury image Trendy 0%

35% Dove (N=3,809) TRESemmé (N=1,993) Clear (N=1,666)

70% 0%

35%

70% 0%

Dove (N=2,605) Vaseline (N=2,425) Pond's (N=1,734)

35%

70%

Lakmé (N=486) Elle 18 (N=242) Pond's (N=177)

Source: Euromonitor International’s 2018 Beauty survey Question: What are some of the main reasons why you buy each of the following hair care/skin care/colour cosmetic brands?

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STATE OF PLAY

EXPOSURE TO FUTURE GROWTH COMPETITIVE POSITIONING HAIR CARE BATH AND SHOWER OTHER CATEGORIES KEY FINDINGS APPENDIX

EXPOSURE TO FUTURE GROWTH

Impact of COVID-19 on Unilever Group (1)

From Sustainability to Purpose •Unilever has longstanding sustainability pledges and undertook strong CSR efforts during the pandemic, including cash flow relief to its supply chain. This places it in a good position going forward, with consumers increasingly caring about social sustainability.

Hometainment and the New Experiential Consumer •Unilever has been driving digital engagement with consumers during the lockdown with its Clear brand, as well as through its oral health care brands. Other forms of digital engagement have come through its premium portfolio, with Ren launching a zero waste challenge on TikTok during the lockdown period.

Where and How Consumers Shop •Unilever’s channel distribution is primarily in mass retailers, including supermarkets and drugstores, with limited expansion into e-commerce. This is likely to put the company at a disadvantage going forward, with COVID-19 seeing the acceleration of e-commerce. In Spain, Unilever signed up with Deliveroo for the delivery of its beauty products on demand, offering potential if rolled out to other markets.

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EXPOSURE TO FUTURE GROWTH

Impact of COVID-19 on Unilever Group (2)

Wellness Redefined •Unilever plays into wellness through its portfolio of hygiene products and the expansion of its Vaseline range to include an Anti-Bac range, which it has been quick to produce. It further benefits from its recent Dove Microbiome launch, which solidifies the brand as a player in skin health.

Innovation and the New “Core” •Unilever benefits from simple value-driven brands, such as Suave and Lifebuoy, offering cost-effective solutions to consumers; however, innovation remains weak for the company in terms of immersive technologies, with home consultations limited to premium brands such as Tatcha.

The “New Normal”: What is Here to Stay? •Unilever’s portfolio is largely based in essentials and hygiene products, including those from Dove and Lifebuoy. This should help insulate the company from changes in consumer attitudes and consumption habits.

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EXPOSURE TO FUTURE GROWTH

Unilever Group shows multifaceted COVID-19 response ▪ Unilever Group has responded to COVID-19 in a multitude of ways, firstly by financially safeguarding its workforce, as well as providing financial support to its extended value chain. Cashflow relief of EUR500 million along the value chain mitigates risk to supply by providing stability to its small and medium sized suppliers. ▪ The company also shifted quickly to meet the challenges presented by the pandemic by redeploying 8,300 employees to high demand areas and launching its personal hygiene brand Lifebuoy across 50 markets in 100 days. This included a relaunch in the UK, with a GBP12 million marketing campaign and a partnership with Uber. Defining Lifebuoy as a key hand hygiene brand in 2020 is key to growth in the future, with health remaining a priority for consumers. ▪ Whilst the company has shown the ability to adapt quickly during the crisis, further work is being done to legally simplify the business. Its double headed structure, split between the UK and the Netherlands, is being unified into a single parent company based in the UK. This is set to give the company further flexibility in dealing with the COVID-19 pandemic, as well as when dealing with a potential second wave and economic downturn. ▪ Unilever Group brands have donated funds, products and PPE to frontline workers, with these CSR efforts increasing brand equity as consumers increasingly favour brands with purpose. Meanwhile, brands have been engaging with consumers online to help to form a connection and build brand loyalty, which is likely to remain post-pandemic. © Euromonitor International

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Lifebuoy UK Campaign – Bish Bash Bosh Source: Thedrum.com

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EXPOSURE TO FUTURE GROWTH

Lifebuoy and Vaseline focus on hygiene…

Lifebuoy • Public service announcements in key regions highlighting the importance of hand hygiene. • TikTok challenge #DoTheLifebuoy to encourage thorough handwashing. • Donating over 20 million products to frontline workers.

Vaseline • Over EUR5 million donated in funds, products and PPE. • New portfolio of products launched with germ-killing properties including Hand Cream + Anti-Bac.

Dove • Took on the “Courage is Beautiful” slogan in campaigns in the US and Canada to recognise the work of front line workers. • Launched Self-Esteem Project, supporting the mental health of young people during lockdown.

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EXPOSURE TO FUTURE GROWTH

…Whilst Rexona and Clear focus on at-home wellness

Rexona • Supporting fitness experts with over EUR1 million donated. • Launched #MoveMoreAtHome and #KeepMovingMore campaigns to support physical and mental health among consumers.

Clear • Launched an online platform for its 14-day Resilience Challenge, comprising an exercise and short film daily aiming to boost users physically, creatively and mentally.

Signal • Offered online tools to help children maintain their oral health routine during lockdown, including through calendars, games and e-books. • Launched virtual dental clinics in Indonesia and Bangladesh.

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EXPOSURE TO FUTURE GROWTH

Prioritisation of hygiene gives strong bath and shower growth ▪ Bath and shower in the US offers the greatest growth opportunities for Unilever, with USD273 million predicted to be added to the company's sales between 2019 and 2022. The category has benefited from the stockpiling seen in 2020, as well as the renewed importance of hygiene. Unilever is poised to perform well in this space, with a 23% share of the category. The company is highlighting the importance of handwashing through TV advertisements for the Dove brand. ▪ India is expected to be one of the top growth markets in the forecast period, with strong growth expected in bath and shower and facial care. Whilst Unilever benefits from key trends, such as natural ingredients in facial care, growth could be limited by an increasing number of new players entering the market.

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EXPOSURE TO FUTURE GROWTH

Top players expected to maintain their rankings ▪ The top seven ranking players in beauty and personal care are expected to maintain their rankings in the market through to 2022, with Unilever Group remaining the third largest player. ▪ Shiseido Co Ltd is set to drop in the ranking in 2020, due to its portfolio focusing on the premium segment, which will suffer from economic uncertainty in light of COVID-19. The company will be especially impacted by weakness in premium colour cosmetics and fragrances, areas Unilever Group is largely shielded from. Unilever’s recently acquired Hourglass brand is, however, present in premium colour cosmetics, and saw sales decline in the first half of 2020.

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STATE OF PLAY

EXPOSURE TO FUTURE GROWTH COMPETITIVE POSITIONING HAIR CARE BATH AND SHOWER OTHER CATEGORIES KEY FINDINGS APPENDIX

COMPETITIVE POSITIONING

While Unilever’s sales grow, its market share remains flat ▪ Unilever Group held a 7% value share in beauty and personal care in 2019, with this having changed little over 2016-2019.

▪ In general, the leading companies have withstood the pressures of an increasingly challenging market place caused by an influx of niche and “indie” brands, often through acquiring indie players themselves. ▪ Procter and Gamble’s market share dropped by a half a percentage point over 2016-2019, while Estée Lauder Cos Inc’s share rose by a percentage point. With predominantly mass and premium portfolios, respectively, this reflects the stronger growth exhibited in premium beauty and personal care over the period. Moving forward, companies with predominantly mass portfolios are expected to perform better, as economic uncertainty leads to trading down. © Euromonitor International

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COMPETITIVE POSITIONING

Market expansion in premium to drive competitive overlap ▪ Procter & Gamble Co has the greatest overlap with Unilever, Group at USD14.6 billion in 2019, with both companies having strong US portfolios in hair care and deodorants. ▪ L’Oréal Groupe is increasing its overlap with Unilever Group, owing primarily to the wide geographic reach of both companies, which have 99 researched markets in common. After close to 10 years of Unilever Group working with the Chinese regulatory authorities, changes to animal testing regulations are being made. It is expected that there will be a greater market overlap with key companies operating in China, such as L’Oréal Groupe, Estée Lauder Cos and LVMH Moët Hennessey Louis Vuitton SA, as Unilever Group plans to bring its premium brands into the country.

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COMPETITIVE POSITIONING

Strong category and market penetration for Unilever

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COMPETITIVE POSITIONING

Germany remains hair care’s weak spot ▪ Unilever group has developed a strong positioning across categories in most of its core markets, with very few white space areas across its top 10 markets. ▪ Germany is the eighth largest market for the company, but it ranks poorly in its largest category, hair care, as well as in facial care. In 2019, the company had a market share of 14% in hair care globally, but only 3% in Germany, led by its Dove brand. According to Euromonitor International’s Beauty Survey, German consumers consider Dove’s hair care products to be suitable for their hair type, of average quality and easily accessible in their area. However, in order to gain share in the market, Dove must tap into key trends, such as natural ingredients and cruelty-free, whilst purveying a sense of good quality to consumers. ▪ In Japan, Unilever lacks a presence in some of its top 10 categories, including toothpaste and body care. The company also has some weakness in facial care, where its largely mass offering struggles to compete with local players such as DHC and Fancl. Whilst Unilever recently acquired Japanese-inspired US brand Tatcha, lack of presence of the brand in Japan suggests future growth in facial care will remain limited. © Euromonitor International

Dove: Associated Traits in Hair Care Germany 2019 Basic product Natural ingredients As effective as other brands Cheap Many different product lines Suited to my hair concerns High quality Easily available in my area Average quality Suitable for my hair type

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0%

20%

40%

60%

Share of Respondents

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COMPETITIVE POSITIONING

Dove maintains strong competitive position

*

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COMPETITIVE POSITIONING

Unilever’s portfolio remains stronger in emerging markets ▪ Dove remains the top brand for Unilever, despite a below market average performance in the company’s largest region, Asia Pacific. The brand benefits from a wide reaching presence in 98 researched markets, with this including a presence in all of Unilever’s top 10 markets. Dove has managed to maintain share globally, despite an increasingly challenging competitive environment globally, with the brand’s focus on care, health and body positivity aligning closely with consumer demand. ▪ The Suave brand contributes a significant proportion of Unilever’s revenue, despite a presence in only 10 markets, including only three of the company's top 10. The brand is supported by its top market, the US, where it had sales of USD952 million in 2019, across categories including hair care, bath and shower, and deodorants. ▪ All Unilever’s top 10 brands are mass positioned, with all but one of these showing a decline or flattening of share growth between 2015 and 2019. This is indicative of sluggish growth in mass beauty and personal care, which has been reflected in the company's strategic shift towards acquisitions in the premium segment, including those of Murad, Tatcha and Garancia. However, in light of COVID-19, the company’s mass portfolio will remain vital to maintaining volume sales, as its key markets, such as the US, see the economic effects of the pandemic. ▪ The company's mass portfolio contributes to its strong presence in emerging markets, where Brazil, India, Indonesia and the Philippines have a presence for almost all of its top 10 brands, whereas markets like the US, China, Japan and the UK have smaller portfolios of Unilever’s top brands. ▪ In Indonesia, Unilever Group holds a market share of 22%, with three of the top five brands in the market belonging to the company. This is indicative of the mass positioning of the market, with the company holding a strong share in the essential categories of oral care, through Signal, and bath and shower, through Lifebuoy and Lux. However, with its share being eroded in both categories, Unilever must compete more strongly with local players and adopt a more competitive price promotion strategy to suit the value-driven market.

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STATE OF PLAY

EXPOSURE TO FUTURE GROWTH COMPETITIVE POSITIONING HAIR CARE BATH AND SHOWER OTHER CATEGORIES KEY FINDINGS APPENDIX

HAIR CARE

Asia Pacific and Latin America lead Unilever’s hair care sales ▪ Asia Pacific is the largest region for Unilever Group in hair care, with a market size of USD4.1 billion in 2019. Hair care in the region saw strong growth over 2014-2019, with a CAGR of 4%, highlighting the region’s potential. The company holds second ranking regionally, with strong positions in Indonesia, Thailand and the Philippines. In the Philippines, the company held a share of 42% in 2019, due to its strong mass portfolio. ▪ Latin America is Unilever Group’s second largest region in hair care, where it holds a market share of 21%, and is the top player. In the region’s largest market, Brazil, Unilever continued to see further growth in 2019, launching larger pack sizes for a value-driven market for TRESemmé and by launching its Dove Care on Day 2 line.

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HAIR CARE

SheaMoisture stands out in social sustainability ▪ Unilever Group has been undertaking community initiatives in hair care. Its platform All Things Hair produces content aimed at offering advice to consumers, whilst gaining insights into consumer behaviour which can then be shared with its brands. In 2019, Unilever partnered with HelloAva to deliver AI-driven product advice personalised to the user, to drive sales through the platform. ▪ Since the COVID-19 pandemic, SheaMoisture has stood out as the leading community-driven brand in the Unilever Group portfolio. It has used its social platform to offer hair care advice through its #AtHomeWithShea campaign, as well as launching a virtual pop-up with yoga sessions, cooking lessons, styling tips and a “happy hour”. The brand has also supported its customers during the 2020 Black Lives Matter protests, hosting virtual events focused on the emotional impact on black people, as well as events to celebrate activism. The company launched a USD100,000 investment fund in June 2020 to support black women-led activism and social entrepreneurship.

▪ The brand’s efforts in community building are likely to stand it in good stead post-COVID-19, as consumers look to brands with strong equity and social sustainability in the long term. © Euromonitor International

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SheaMoisture runs Let’s Talk virtual event Source: Instagram.com

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HAIR CARE

Core portfolio to drive future growth ▪ In 2019, 82% of Unilever Group’s global hair care sales were in shampoos, and conditioners and treatments, reflecting its large portfolio of core products. This is set to help the company withstand the difficulties of an economic turndown in light of COVID-19, as consumers begin to slim down their routines and adopt a “less is more” mentality. ▪ The company saw a negative impact on its US hair care portfolio in the first half of 2020. This was mainly due to styling agents, which represented 25% of company sales in the country in 2019 and have suffered due to home seclusion and the reduction in social events. ▪ Markets where shampoo and conditioners and treatments hold a relatively small share of sales, such as the US and the UK, present the greatest risk to continued growth. © Euromonitor International

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HAIR CARE

US, Brazil and Argentina to drive hair care growth ▪ Despite hair care in the US performing poorly in the first half of 2020, the country offers the greatest growth, with Unilever Group holding a 17% share in the market in 2019. However, with styling agents set to decline by an annual average of 3% at constant 2019 prices over 2019-2024, a reprioritising of its portfolio is needed to achieve growth. ▪ Latin America offers strong growth opportunities, with Brazil, Argentina and Mexico combined expected to add USD395 million over 2019-2022. Argentina will remain a key market for Unilever Group, but with its competitive position against Procter & Gamble is tightening, and a tougher economic environment expected in the forecast period, the company must adopt aggressive strategies to provide value, and invest in promotion.

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STATE OF PLAY

EXPOSURE TO FUTURE GROWTH COMPETITIVE POSITIONING HAIR CARE BATH AND SHOWER OTHER CATEGORIES KEY FINDINGS APPENDIX

BATH AND SHOWER

Asia Pacific and North America key regions in bath and shower ▪ Asia Pacific and North America represented 57% of Unilever Group’s global sales in bath and shower in 2019, with the company ranking number one in both regions. Dove competes strongly in both regions, and Lux and Lifebuoy are also top players in Asia Pacific. ▪ The Middle East and Africa saw a CAGR of 9% in bath and shower between 2014 and 2019, with company sales being USD946 million in 2019. The region shows great potential for the company, with Nigeria, Egypt and South Africa adding the greatest value between 2014 and 2019. Rising urban populations in markets such as Nigeria are expected to increase demand for branded bath and shower products in the forecast period, offering further opportunities to Unilever.

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BATH AND SHOWER

Emerging markets key to future growth ▪ Unilever Group’s portfolio in bath and shower is heavily weighted towards bar soap and body wash/shower gel, with these holding 53% and 34%, respectively, of its global sales in 2019. ▪ The company's portfolio in emerging markets has a stronger weighting towards bar soap. ▪ In light of COVID-19, hygiene – specifically hand hygiene – has become a priority for consumers, and this is expected to persist in the forecast period. Markets with a strong weighting towards bar or liquid soap, such as India, Brazil and Mexico, are likely to have a much stronger outlook going forward than markets with a weighting towards body wash/shower gel, such as Germany, China and Japan. © Euromonitor International

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BATH AND SHOWER

Unilever optimising hygiene sales through market expansion ▪ India has the second greatest growth opportunities for Unilever in bath and shower, with USD223 million expected to be added to company sales over 2019-2022. The company expanded its portfolio with multiple bath and shower launches in 2019, with a focus on natural ingredients, which are popular within the market. These included Liril body wash and bar soap, Lux Botanicals, Pears Naturale and Fair & Lovely soap. ▪ In Brazil, Unilever Group has gained share in bath and shower through Dove and Lux, with Dove providing a budget offering through multipacks, while Lux has a natural positioning. ▪ Further growth is likely to be seen in other markets, with Unilever Group rolling out Lifebuoy bar and liquid soaps in 50 new markets in 2020. © Euromonitor International

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STATE OF PLAY

EXPOSURE TO FUTURE GROWTH COMPETITIVE POSITIONING HAIR CARE BATH AND SHOWER OTHER CATEGORIES KEY FINDINGS APPENDIX

OTHER CATEGORIES

Skin care remains strong for Unilever in Asia Pacific ▪ Asia Pacific is Unilever’s top market for skin care, representing close to half of the company's sales in 2019. India and Indonesia are the biggest markets for the company, with 48% of its regional sales in 2019. ▪ In terms of brands, Asia Pacific is mainly led by Pond’s and Fair & Lovely. In the company’s second largest region, North America, its skin care sales are led by premium brand Murad, and Vaseline. This reflects demand for skin lightening creams in Asia Pacific, whilst the North American portfolio highlights the importance of premium skin care in the market. In North America premium skin care grew at a 7% real terms CAGR over 2014-2019; however, this leaves Unilever at risk in the market in the forecast period, as this is expected to slow to a 1% CAGR between 2019 and 2024.

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OTHER CATEGORIES

Fair & Lovely sparks controversy ▪ Unilever faced intense criticism over its Fair & Lovely range in 2020, as issues around racism and colourism gained attention in the wake of global protests in support of Black Lives Matter. The brand, which generated sales of USD766 million globally in 2019, has been deemed as perpetuating colourism by many, with advertisements for the brand having historically shown unhappy dark skinned women turned into successful light skinned women by using the cream. Demand nevertheless remains strong for these products, particularly in India, where 72% of the brand’s revenue was generated in 2019, and where the favouring of fair skin is deep-rooted in the culture. This is particularly true of more rural communities, where the brand generates a significant portion of its sales.

Fair & Lovely is renamed Glow & Lovely Source: Instagram.com

▪ The company was further under fire in ▪ The brand has been renamed to Glow & Lovely in light of the September 2020, regarding the hair care controversy, with this aided by the Indian government’s ban on brand TRESemmé in South Africa, after advertisements for skin lightening creams. Many are calling for retailer Clicks featured advertisements Unilever to follow Johnson & Johnson’s lead in removing these depicting Afro hair as “frizzy and dull” products from the market, with pressure increasingly coming whilst straight hair was described as from young urban populations in India, as well as from “normal”. The company responded by consumers in markets where skin lightening is uncommon. removing the products from the market for Whilst this would significantly impact the company's ranking in 10 days, but damage to its reputation in India, a refusal to do so could damage the company's image globally, which could financially impair it beyond the loss of sales. the country could be more long lasting.

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OTHER CATEGORIES

Deodorants the focus of Unilever Group’s innovation ▪ Latin America is Unilever’s largest region for deodorants, with this largely due to its significant presence in Brazil. 2019 was particularly strong for the company in Brazil, with year-on-year growth of 8% due to consumers who traded down during the financial crises returning to branded products. Despite the challenges presented by COVID-19, Unilever Group’s portfolio is well positioned to thrive in the forecast period through value-driven Suave and efficacy-led Rexona Clinical. ▪ Deodorants have been a focus of the company in terms of innovation, with Rexona’s Dry Serum format for humid countries proving popular in Asia Pacific, whilst Dove’s 0% Aluminium deodorant has proved popular in Western Europe and North America.

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OTHER CATEGORIES

Brand image varies in men’s grooming ▪ Unilever Group held an 11% value share in men’s grooming in 2019, with its share having increased since 2015, despite losses for its top brand Axe/Lynx. ▪ A large focus of the company in men’s grooming has been updating the marketing of these brands away from the idea of stereotypical “toxic” masculinity towards an inclusive and more purpose-driven narrative. Recent marketing from Axe/Lynx has shown this through the social campaign #AlwaysProud to celebrate Pride Month, using images of LGBTQ+ couples, while Dove Men+Care has focused on a care narrative most recently centred on the role of fathers during lockdown. This narrative appears to have been less successful for Axe/Lynx, which has struggled to redefine an image established by its “Lynx Effect” advertisements, which perpetuated these negative male stereotypes, despite it moving away from this branding in 2015. ▪ Unilever Group has modernised its offering in men’s grooming through the acquisition of direct-to-consumer brand Dollar Shave Club in 2016, helping the company to compete with the top players, Procter & Gamble Co and Edgewell Personal Care Brands. In North America, the brand looks likely to overtake the second largest men’s shaving brand, Schick; however, it is less strong in other regions. © Euromonitor International

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Axe/Lynx run #AlwaysProud campaign Source: Instagram.com

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STATE OF PLAY

EXPOSURE TO FUTURE GROWTH COMPETITIVE POSITIONING HAIR CARE BATH AND SHOWER OTHER CATEGORIES KEY FINDINGS APPENDIX

KEY FINDINGS

Executive summary Mass portfolio to drive growth in light of COVID-19 recession

Unilever’s primarily mass portfolio, which focuses on personal care products and necessities, is set to shield the company from the effects of a recession in light of COVID-19, particularly in hand hygiene. However, the company remains somewhat limited by its e-commerce capabilities, as consumers change how they shop. Growth driven by hair care Unilever struggled to gain market share over the review period, losing share in and market momentum skin care and bath and shower. This is despite acquisitions in the high growth area of premium skin care, with growth remaining driven by market momentum. However, hair care somewhat compensated for this with share growth, adding USD1.4 billion in sales between 2016 and 2019. Emerging markets continue India, Brazil and Argentina were strong growth markets for the company in the to drive growth review period, and are expected to continue to be so. Unilever has a strong mass portfolio in these three markets, with the Dove, Lux and Sunsilk brands having a presence in each of them. Premium expansion in China Planned expansion of Unilever’s premium portfolio into China, amid changes in offers opportunities animal testing regulations, provides opportunities for the company, whilst increasing its competitive overlap between competitors in the premium segment. Brand gains equity through COVID-19 response

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The company’s extensive CSR efforts in light of COVID-19 give it strong brand equity, as consumers increasingly favour brands with purpose. These efforts include monetary and product donations across its brands, public service announcements and community building communications.

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STATE OF PLAY

EXPOSURE TO FUTURE GROWTH COMPETITIVE POSITIONING HAIR CARE BATH AND SHOWER OTHER CATEGORIES KEY FINDINGS APPENDIX

APPENDIX

Projected company sales: FAQs (1) Why project company sales? ▪ Company and brand sales projections are a useful way to compare relative future performance. These are not forecasts in the traditional sense, as it is not realistic to forecast company activity. Instead our projections are a measure of a company's exposure to future growth. How do you project company sales? ▪ Euromonitor International's company and brand sales projections are made with two underlying assumptions. Firstly, that current year brand shares will not change. Secondly, that there will be no mergers, acquisitions or divestments in the future. Forecasting shares is notoriously difficult and therefore we assume that a brand's share of any given category will remain constant in the future. Trying to accurately predict future M&A activity is equally fraught with difficulty. ▪ Every category will, however, grow at a different rate, and the cumulative effect across different brand portfolios (ie every relevant country-category combination) means certain companies will outperform others. ▪ This is “market momentum” and is a measure of a company operating in higher growth countries and categories relative to its rivals.

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APPENDIX

Projected company sales: FAQs (2) What is the basis for this methodology? ▪ Based on Euromonitor International's growth decomposition analysis, it is evident that general market momentum is the single most important contributor to company performance, outperforming the impact of both market share gains and M&A activity. (Clearly this does not apply in any circumstance where a given company has made a major acquisition or divestment.) ▪ This conclusion is based on analysing all brand and company sales data in every category and company in Passport. ▪ For the largest companies, market momentum shows even greater significance, so exposure to growth offers a sound basis for projecting relative future performance. Note: Growth decomposition and projected sales are based on the sum of all activity in researched countries only, and therefore do not take into account the effect of non-researched (modelled) markets. For this reason, there will be slight differences compared with the full global data found elsewhere in this report.

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FOR FURTHER INSIGHT PLEASE CONTACT Amy Rollinson Analyst, Beauty & Fashion [email protected] https://www.linkedin.com/in/amy-rollinson-499154109/

Experience more... This research from Euromonitor International is part of a global strategic intelligence system that offers a complete picture of the commercial environment. Also available from Euromonitor International: Global Briefings Timely, relevant insight published every month on the state of the market, emerging trends and pressing industry issues. Interactive Statistical Database Complete market analysis at a level of detail beyond any other source. Market sizes, market shares, distribution channels and forecasts.

Strategy Briefings Executive debate on the global trends changing the consumer markets of the future. Global Company Profiles The competitive positioning and strategic direction of leading companies including uniquely sector-specific sales and share data. Country Market Insight Reports The key drivers influencing the industry in each country; comprehensive coverage of supply-side and demand trends and how they shape future outlook.

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BEAUTY AND PERSONAL CARE: UNILEVER

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