Unilever UK Foods will hike up its marketing spend by at least 15% in a bid to claw back the initiative after a lacklustre year.
Speaking as the parent company posted a 36% drop in full-year pre-tax profit to €2.9bn on sales down 2% to €42bn, Unilever UK Foods managing director Kevin Havelock said new campaigns on Flora and Pot Noodle would be backed by more aggressive marketing and promotional activity in-store, building on gains in the fourth quarter.
Although it had been a tough year, the UK had outperformed Western Europe overall, while the revamp of Birds Eye had boosted sales 3% over the last six months, said Ice Cream and Frozen Foods boss James Hill.
At a global level, however, Unilever had taken its eye off the ball, while its target-setting mentality had reduced its flexibility to adapt quickly to worsening market conditions, admitted co-chairman Patrick Cescau. He said: “We should be able to grow at 3%. We’re at zero. There are lots of reasons for this, but no excuses.”
As widely predicted, the company also announced plans to scrap its dual management structure, making Cescau group chief executive and Antony Burgmans non-executive chairman, ditching two layers of management and creating a new operating board comprising regional presidents for Europe, Americas and Africa/Asia and category presidents for food and home/personal care.
Although having one CEO was sensible, there was still some confusion as to the reporting structure following the decision to scrap regional business groups, said one UK insider.
“I think the idea is that if it’s a branding issue, you report to the category president, and if it’s a business issue, you report to Europe.”