LONDON- The world’s biggest consumer goods companies largely weathered the first-quarter inflation storm. In general, $392 billion Procter & Gamble, $366 billion Nestlé, $56 billion Reckitt and $41 billion Danone raised prices without customers buying less of their wares. The struggles of $118 billion peer Unilever, however, suggest some product lines may prove better bets than others.
A few groups looked good because of a temporary post-pandemic surge in their business lines. The end of lockdown spurred sales of bottled water: Danone’s water volumes rose 11 percent even as prices increased 5 percent. Healthcare at P&G and Reckitt also enjoyed higher volumes and prices because looser Covid-19 restrictions meant more people getting colds and buying medicine. That carries a particular sting for Unilever boss Alan Jope, who in January was ready to swap his slower-growing food lines for GlaxoSmithKline’s consumer health business, only to be rebuffed.
Other businesses suffered by relying on commodities whose prices have grown faster, pushing marketers to increase prices more to dampen the margin hit. Crude palm grew 32 percent from January to March — bad news for Unilever, which buys a tenth of the global palm oil supply for products like Knorr stock cubes. Unilever also saw lower volumes than P&G in homecare, partly because its input costs are dearer, so it had to hike prices more. – Reuters
