Unilever plans more cuts as sales rise

[tomturbomatic]

From an article in Friday's (8/3/07) Wall Street Journal:

In a two year restructuring effort by CEO Patrick Cescau, Unilever plans to sell its struggling U.S. laundry detergent operations. Detergent brands which include Wisk and ALL and fabric softener Snuggle are part of a business that generates about E800 million in annual sales. Unilever executives have long resisted selling the U.S. laundry brands, even as they have lost significant market share to Procter & Gamble over the past decade.

German consumer-goods group Henkel KGaA could be interested in bidding, some analysts said. A Henkel spokesman declined to comment. Mr. Cescau declined to say what else Unilever might sell.

 

[peterh770]

Now is the time for Jetcone to perfect his Dash formula so that he can buy the ailing ALL brand and go into business...

Struggling with an income of E800 million? I wish I was struggling that badly...

 

[tomturbomatic]

It would be neat if Henkel could be talked into taking over the factories here and making Persil in the U.S. The same chemicals are available here and they would not have the expense of shipping Persil over the bounding main. They could sell it for a little less, make about the same money and introduce Persil to a huge U.S. market.

 

[joeekaitis]

Or change Spee to Spree and Americanize the fox mascot.

<center>

"Are you ready for
Megaperls, America?"</center>

 

[oxydolfan1]

This bums me out in a way, because I frequently use the Wisk HE liquid and All powder, and I like them and believe they represent good value for the dollar, although I don't have much use for Snuggle.

I also like the fact that there aren't seventy-five useless varieties for each brand, like the P&G products.

But, the Wisk, All, and Surf brands haven't seemed to be promoted sufficiently by Unilever in order to compete and win against P&G, and their intention to sell might very well explain why.

 

[MrX]

This article is a little more revealing

Seems Unilever's US laundry product operations have been slow-growth and relatively troublesome and they want to jettison them or at the very least bring in a joint venture partner / licence them out.

i.e. they're not sure if they want to exit the market completely yet.

http://adage.com/article.php?article_id=119661

 

[toggleswitch]

We all saw this coming, didn't' we?

Methinks the demand for laundry detergent has gone down overall as front-loaders here in the US necessitate the use of smaller quantities of detergent.

 

[oxydolfan1]

Well, the profit margin goes up, as the bottles get smaller too!

Where my house is, the front-loaders have not caught on yet (in fact, I'd say they are wildly unpopular)...I guess detergent will still be a profitable market, for at least some time.

It would be nice to whine about Tide's almost total brand saturation in the detergent aisle, but in fairness, Unilever does it too, in the personal care section.

(DOVE, DOVE, DOVE...everywhere!)

Anyone else notice this?

Drives me crazy...IMHO, unique products should have their own unique names and identities!

 

[supersuds]

I wonder if Kao of Japan might be interested in the Lever brands. They're no. 1 in Japan and have been expanding their US presence by buying the Andrew Jergens Company and, more recently, Ban deodorant from Bristol-Myers.

We do need a heavy hitter to be competitive with P&G in North America. Though most people do seem to believe that all they need is Tide.

 

[tomturbomatic]

Lack of attention to Unilever brands

I still have some of the Surf HE tablets that were discontinued and of course the Wisk HE tablets that were also dropped because the new HE washers use too little water to dependably dissolve the tablets. It's a shame that they just did not come out with a plain HE powder. Maybe they are convinced that liquids are taking over the market and don't want to be bothered with powder products any more.

 

[jetcone]

Peter point well taken

setting up my cement mixer this month!

 

[angus]

Tom- I too still have a stash of Surf, Wisk and Purex tablets. Unfortunately most of our shelves here in supermarkets, Wal Mart, KMart and Target are now devoted almost exclusively to liquids. Over the years, people have attached themselves to liquids because of the "convenience". OF course the manufacturers have once again convinced the public that liquids are the way to go just as they convinced them that they need 5 feet of suds to clean effectively and that we need 54 versions of Tide. I still find them messy and slightly more difficult to judge usage. But then I am still a dinosaur at heart.

On a similar note, the manufacturers have done a fine job of killing brands. We blame P&G for saturating the market with Tide and killing the competition, but then the competition has done nothing to help themselves. Lever hasn't advertised extensively since the 80's and I couldn't remember the last time I ever saw a Fab, Ajax or Fresh Start commercial or print ad. So with brands like Lifebuoy, Lux, Rinso, Drive, Cold Power, etc... they just faded away. Of course I realize the pressure P&G put on wholesalers and retailers to squeeze out other manufacturers - I bet if an investigation were ever done, we would see a very different side of "pure as the driven snow" P&G. They themselves have killed off many of their own detergent brands as well.

I often wonder as the number of product choices decreases if we aren't moving toward the standardized society that George Orwell wrote about in "1984". Kind of gives new meaning to the term "majority rule"....

I guess I have to give GE some credit. At least they haven't had to merge with another appliance manufacturer, so that does provide another choice. Perhaps not a great one, but....

 

[MrX]

If there's one thing Unilever knows how to do it's make money. It's a huge operation and knows exactly what it's doing. It's quite possible that the margins in the US detergent business are just too low for them to have been all that concerned with it - meanwhile they're concentrating on more profitable ventures in the US, mostly in personal care and food products.

Unilever's operations in Europe are enormous, much like P&Gs are in the US. It's just a case of dumping brands they're not making enough profit on.

In Europe, the margins on detergents are being squeezed very hard too.
The major change over here has been supermarket own-brands suddenly going from being BOL cheap and nasty to being quite high tech, effective and often more innovative than Unilever, Henkel and P&G !
E.g. it was own-brand maker McBride that first marketed Liquid-capsules !

The core European Unilever detergent brands i.e. Omo (and re-badged Omo - Persil (UK/IRL), Skip (France)) and Surf are continuing to hold their own.
The Omo (Premium brand) in particular is one of the international 'billion dollar' detergents (Along with Tide, Persil and Ariel)

The US detergent market is possibly even tighter margin squeezing. It's clear from what P&G are up to recently, i.e. launching 'naturals' that they're trying to get more value added into the generic Tide brand by selling premium versions of it.

I generally don't think US detergents, from what I have read/seen first hand, have been particularly 'technology-driven' or 'innovation-driven' compared to Europe. Which has resulted in a situation where the company that can churn out most detergent and get maximum economies of scale i.e. P&G in this case, will squeeze out all competition.

I mean, if you look at US detergents compared to European equivilents. They're all stuck in one bulky liquid format and seem to mostly just be "with bleach" "with bleach alternative" or "bleach free"

This compares to a European market where you've:
Powder, Liquid, Tablets (either to put in drawer/drum), Liqui-Tabs, Disolvable liquid capsules etc.

Then:
Universal
Colour
Darks
Wools & Silks

Then:
Umpteen fragrances
and with : fabric softener or additives like Aloe Vera

Then:
Bio (Enzymes)
Non-Bio (no Enzymes)
Sensitive
etc

And, then you've got constant advertising based on technology innovations and reformatting.

I just found the US detergent market was a lot more stale. Even though there were umpteen versions of Tide, they were all very 'samey' and the other producers were not doing much i.e. Unilever, Purex (Henkel) and Arm and Hammer.

The only interesting products I found were in the naturals type range e.g. Seventh Generation..

I'd say you're heading towards a very boring detergent market unless something changes.

Perhaps if Henkel picks up the Unilever brands you might get them re-invigorated although, I'd say it's a tough market. Doesn't seem henkel's even too keen on doing much with Purex.

 

[MrX]

Unilever canada products

I see the Canadian Unilever Products Sunlight seem to somewhat resemble a cross between European and US products.

Quite a decent range

http://www.sunlightlaundry.ca/en/products.aspx

 

[MrX]

Also, am i mistaken

Is that lady sitting on a Hoover Vision washing machine?
Didn't think they sold them in Canada

http://www.sunlightlaundry.ca/en/hehq.aspx

 

[tomturbomatic]

I used some Cheer HE over the weekend and it seemed to clean well. A little suds in the rinse, but my skin has not fallen off after sleeping on the sheets washed in it. Unlike Tide HE, the fragrance is pleasant, but hardly noticeable after drying. I used MegaPerls for colors on my shirts. Again pleasant fragrance and good cleaning. I added some STPP and Borax (which is a necessity in summer shirts).

I need to try some of that box of OMO-MATIC that John brought back for me from his trip to Australia.

 

[peterh770]

If Unilever can be number 1 in UK with Persil in the Euro frontloaders, there is no reason that they can't be number 2 with Wisk/ALL/Surf. They aren't trying. It is a huge jump to go from P&G products down to now Dial/Henkel or Arm & Hammer or Huish products.

If they were serious, we'd have some decent detergents and softeners, and probably one with the "Dove" name on it!

Henkel aquiring these brands would be best. Then they could have a upper shelf brand(s) and leave Purex in the budget category. The one thing Henkel doesn't have is a good softener, and Snuggle would fit that niche (purple Snuggle Expressions! HEAVENLY!!!).

 

[oxydolfan1]

"It is a huge jump to go from P&G products down to now Dial/Henkel or Arm & Hammer or Huish products."

This is true. One notable innovation that seems to be popular are the 3X bottles, which seem much easier to lug with your stuff to the laundromat. To use these bottles would standardize things from a production standpoint.

One wise move on P&G's part is the way they position Tide, Gain, Cheer, etc., to appeal to different market segments. Unilever does this in other countries, but here their brands all seem to be targeting the same customers.

Wisk could go after Tide's market by emphasizing excellent performance (and it IS an effective product) at a more affordable price point (sometimes Wisk runs $2-$3 less than a comparable amount of Tide liquid in the New York area.)

Surf liquid in a 3X formulation could target Gain liquids by offering vibrant, yet unique or even vintage fragrances like a plain lemon scent, similar to Canada's Sunlight liquid.

All already has a very successful and well-regarded "Free and Clear" liquid, like Cheer does. I think that if Unilever would have been smart, they would have built on All's "cold water" legacy, and targeted the launderer who is interested in color protection and washing darks without optical brighteners. All could be a more affordable "safe" detergent, as opposed to Wisk being the aggressive stain fighter for families.

"...and probably one with the "Dove" name on it!"

It is to a point where I would not be shocked to see Dove toothpaste.

 

[tomturbomatic]

Cold Water All

This product was listed in the Kenmore Combination Washer-Dryer owner's manual as low-sudsing liquid and safe to use in the combo, but I think that was only in cold water because it got foamy in warm water.

Do those of you who use liquid HE detergents feel that Wisk is as good as Tide or Cheer? Didn't someone say that the liquid ALL was best for lightly soiled loads?

Somewhere, I recently read that Fresh Start was again a Colgate-Palmolive product. Does anyone know if that is true?
Thanks, Tom

 

[peterh770]

The Wisk HE has enzymes listed on the label; ALL does not. I use ALL and like ALL, but I also boost it with OxyClean in my whites and light colors loads.

I think the Wisk is as good as Tide, even less foamy.

With the C-P products, you have to read carefully. Fab says something like "manufactured for and under licence from Colgate-Palmolive", while Suavitel says "made by Colgate-Palmolive". Seems to me that Huish is making their detergents for C-P.