Time to milk-shake things up at Unilever

• Low-carb fad slims Unilever figures

Edited by Kate Rankine (Filed: 03/05/2003)


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It's been three years now since Unilever chairman Niall Fitzgerald toddled off along the Path to Growth, and like Dorothy on the Yellow Brick Road, he's made some good friends along the way.

Thanks to his strategy of focusing on key brands and the purchase of American rival Bestfoods, growth has increased and the company has ended up looking slimmer and trimmer.

With the Path plan running out next year, the Emerald City is now in sight. Mr Fitzgerald is no farm-girl from Kansas, though, and he can't just click his ruby slippers together and go home. The shareholders are waiting for the sequel, and there's a danger that it might look less like Path to Growth II and more like the Road to Nowhere.

First-quarter figures from the appetisers-to-anti-perspirants group yesterday were harder to swallow than a pack of Unilever's Slimfast pasta. Even the leading brands, which are the backbone of the Path strategy, grew just 3pc, while overall sales were down 4pc.

It would take a veritable Wizard to present that in a good light, and the company didn't produce one. Indeed, Mr Fitzgerald wasn't talking yesterday - apparently he never does for first-quarter figures - leaving his spinmeisters to come up with a cornucopia of excuses, bewildering everyone about what exactly caused the "slower-than-expected sales".

First up was Iraq and then secondly Sars, this year's top two excuses. Both of these stop us going out and eating ice-cream, presumably because it's difficult to lick a Magnum when you're wearing a mask. Then there is retailer destocking, a process that has been going on for years as companies seek to decrease the amount of inventory they hold at any one time. The company says it has been worse than expected this year, but given that this is a continual issue for Unilever, it might have been better anticipated.

Oh yes, and there's the late Easter and the fact that there is one fewer day's trading this quarter than the same period last year. The latter point is reasonable, but are we really to believe that customers consume markedly more olive oil and Flora at Easter than over any other weekend? It isn't as if the company makes chocolate eggs.

Finally, and perhaps most bizarrely, there's the Atkins Diet, which has stopped us all stocking up on Slimfast shakes. The company doesn't have any low-carbohydrate products in its range, and the current fad appears to have caught it unawares. Perhaps Mr Fitzgerald's innovation team had better get cracking on those bacon milkshakes for Dorothy and her friends.