The news
Unilever raised prices 2.3% in the third quarter as it passed higher commodity and operating costs on to customers. Prices had remained roughly flat in the first half of the year. Underlying sales grew 5.2% in the quarter, with volumes up 2.9%.
Vegetable and palm oils, kerosene, logistics and foreign exchange movements contributed to higher costs, executives said.
“Now that we have more clarity about it, we are accelerating pricing,” CEO Fernando Fernandez said.
The details
Home care accounted for half of Unilever’s cost inflation and had the biggest price increase, at 3.6%. The company expects home care pricing to accelerate further through the rest of the year.
Prices rose 2.4% in personal care, 2.1% in beauty and wellbeing, and 1.3% in foods.
Home care sales grew 9.1%, with volumes up 5.4%.
The increases were much smaller in developed markets, where prices rose 0.7%, than in emerging markets, where they rose 3.3%. North American sales fell 0.7%, though Unilever said it gained volume share.
Developed-market volume fell 1.7%.
Emerging-market sales grew 9.5%, with volume up 6.0%.
Palm oil, one of the commodities driving higher costs, is up 9% from a year ago but remains well below its 2022 peak. The global price averaged $1,133 a metric ton in September, compared with a record $1,653 in March 2022, according to International Monetary Fund data.
Palm oil prices have risen 13% since January.
Malaysian palm oil inventories reached a record in September.
Malaysian palm oil futures fell last week to their lowest level since March.
Unilever expects cost inflation to continue into 2027, although it should ease as the year progresses. Fernandez said the company expects “some bit of stability coming through” in the second half of 2027.
Unilever raised its full-year underlying volume growth outlook to at least 3%.
It expects underlying sales growth of about 5% in the second half.
What peers are doing
Other consumer goods companies are also responding to higher costs. Reckitt raised prices 4% across Europe in the third quarter, citing inflation linked to the Middle East conflict. Colgate-Palmolive is using a combination of pricing increases and productivity gains to offset higher costs.
(Photo: Jack Lee / Unsplash)
