Unilever CEO explains why demand jump due to coronavirus is not good news for global FMCG giant

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April 15, 2020 3:00 PM

While it may seem that fast-moving consumer goods companies such as Unilever itself are having a good run, the British-Dutch company has said that it is not all rosy.

Unilever maintains that it is seeing a spurt in demand for hygiene products especially in the US.

Demand for essential goods such as food items and hygiene products have gone up in the last few weeks as countries across the world remain under a lockdown in the wake of coronavirus. For FMCG companies such as Unilever, that means a sudden spike in demand for a portfolio of products that these companies happen to make. However, while it may seem that fast-moving consumer goods companies such as Unilever are having a good run, the British-Dutch company has said that it is not all rosy. “Coronavirus is not good news for Unilever. We are seeing shift in demand for sure, we are seeing a big reduction in out of home food consumption of ice cream and restaurant products… the net effect is certainly not good news for us on a commercial basis,” Alan Jope, CEO, Unilever, told CNBC in an interview.

The company, however, maintains that it is seeing a spurt in demand for hygiene products especially in the US, and that its portfolio essentially comprises things that are in demand. “Unilever is not a bad place to be right now. Our portfolio is the type of basic products that people need. We have got a conservative financial picture and our balance sheet shows great strength,” Alan Jope added. Since the announcement of lockdown in various countries, many instances have been reported where people stockpiled on essential goods as they feared that they would run out of essential supplies. However, Alan Jope said that it is only in the US that the country saw dramatic pantry holdings by people. “US consumer has bigger house size and more appetite for credit card debt,” he told the news channel.

Meanwhile, Unilever’s India arm Hindustan Unilever (HUL) has committed Rs 100 crore in the fight against the coronavirus as the country battles to contain the spread of the virus. The company has also reduced the prices of its Lifebuoy sanitizer and hand washes to make them more affordable to a larger section of the society.

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