Unilever’s food and beverage growth driven by price, not volume sales

Unilever’s results from Q12024 have been released, showing a mixed picture for food and beverage. Despite significant growth, the impact of factors such as rising commodity prices has led to a fall in volume sales for food and beverage.

Growth driven by price, a decline in volume

While there are clear signs of growth in Unilever’s food and beverage categories, especially nutrition, this growth is driven by price, rather than volume.

Unilever’s food and beverage categories, nutrition and ice cream, have both seen growth this first quarter of 2024, at 3.7% and 2.3% respectively. Overall, both categories grew within Europe.

However, it is clear that this growth is being driven by price. In volume terms, both these categories have declined. Ice cream has seen a negative volume growth of 0.9% and nutrition by 0.4% (but in an improving trend). This suggests that sales of products, in terms of volume,  are not increasing, but in fact only growing because of increased prices. This is specific to food and beverage, and is not seen within Unilever’s other three categories (beauty and wellbeing, personal care, home care). 

“The sequential improvement in volume is important, remembering that nutrition is later in the commodity inflation cycle,” suggested Fernando Fernandez, Unilever’s CFO. The reduction in volume sales for nutrition, according to Unilever, is mainly due to SKU reductions. However, Unilever hopes that the volume of sales for nutrition will improve in quarter two within Europe.

Unilever’s results in numbers

–        Turnover for the first quarter was €15bn, up 1.4% from previous year.

–        Average sales growth 4.4%.

–        Power brands drove 75% of turnover.

–        Underlying sales in Europe grew by 4%, with 5.5% by price and negative growth of 1.5% from volume.

–        Nutrition grew by 3.7%, with 4.1% by price and negative 0.4% by volume. Turnover was €3.4bn.

–        Ice cream grew by 2.3% with 3.2% from price and negative 0.9% by volume. Turnover was €1.8bn.