Unilever aims to enter $2 billion wellness group, driven by beauty and wellbeing sales

Unilever, the $64 billion global consumer packaged goods (CPG) giant, posted underlying sales of 4.4% in the first quarter, led by 7.4% growth in its Beauty & Wellbeing division, one of its five reporting groups. We have just reported strong growth.

In the results announcement, CEO Hein Schumacher highlighted the strong performance of the company’s “power brands,” which accounted for 75% of sales and led to growth of 6.1%. Power brands include Dove and Rexona, which are part of the Personal Care Group. His nutrition brand is Knorr and his beauty portfolio brand Sunsilk alongside TRESemmé.

He also praised the double-digit growth of the Health & Wellbeing division, which is part of the Beauty & Wellbeing division. The company is a cluster of his seven wellness-forward brands that complement its prestige and core beauty products, as well as performance-based personal care deodorant, skin cleansing and oral care brands.

Through its health and wellness initiatives, the company is tapping into a huge $5.6 trillion market, which is expected to reach $8.5 trillion by 2027, with a compound annual growth rate ( CAGR) will be 8.6%.

The approximately $200 billion nutraceutical sector of the wellness market is growing even faster at a CAGR of 9.1% through 2030.

opportunity call

Unilever is focusing on what it describes as a “holistic approach to health and well-being” as the definition of health changes from the absence of disease to people taking a preventative approach to health. We believe there are ripe opportunities for this. The company has appointed Jostein Solhiem as CEO of Health and Wellbeing, tasked with expanding its prospects in the sector.

“My group is probably the most unique within Unilever in that we capitalize on consumer trends that overlap across all three of the major industries we operate in: beauty, personal care and nutrition,” he explained. “We overlap in supporting customers who want to feel well from the inside out. We offer active solutions for immunity and mental, physical and emotional health.”

Through our Health and Wellbeing group, Unilever leans into broader cultural trends towards a healthy lifestyle, living on a healthy planet. This trend is challenging other consumer goods companies that have historically had no ties to either. Unilever stands out as a leader in its mission to protect the health of people and the health of the planet.

Notable in the company’s strategic shift toward health is its plan to spin off its ice cream division into a separate company by the end of 2025.

“Ice cream brings a lot of joy and happiness to people, but it’s not necessarily the best thing for your physical health,” quipped Solheim, who was CEO of Ben & Jerry’s for eight years.

Unilever Wellness Journey

Unilever began its wellness journey in 2019 with the acquisition of Olly, a disruptor in the vitamins, minerals and supplements (VMS) space. The brand was co-founded in 2014 by serial entrepreneur Eric Ryan, who also launched the Method cleaning product line.

Olly took a non-traditional profit approach in positioning the product with bright and exciting packaging, perfect for retail shelves. More than just a list of ingredients, product names describe the health and wellness needs consumers are trying to address.

Olly was originally launched at Target
the goal
– Ryan’s co-founding partner, Duke Stukenborg, was a vice president and merchandise manager at Target, but has since been hired by a wide range of retailers including CVS, Walgreens, and Safeway.
safe way
Wegmans, Whole Foods, Albertsons
albertsons
Amazon etc.

“This was part of our more aggressive portfolio shift, called the Growth Acceleration Plan (GAP), to enter new and attractive categories such as health and wellbeing,” Solheim explained. did. The goal is to make Unilever a “simpler, better and more impactful organization”.

Olly’s success led Unilever to acquire another of Ryan’s brands, Welly. Welly is a disruptor in the first aid bandage category that also debuted at Target. We offer colorful, kid-friendly bandages that are designed to stand out rather than blend into your skin like other bandage brands. There are also bandages that glow in the dark. The packaging is also eye-catching, rather than bland and clinical.

Other key products from the Health and Wellbeing group include Nutrafol, a nutritional supplement that supports hair growth, and Nutrafol, which is added to water to provide faster hydration than plain water or major sports drinks. There is Liquid IV, a VMS powder supplement that boosts electrolytes.

Both products have what Solheim describes as “synergistic effects” that, like Nutrafol, provide consumers with additional health and wellness benefits. Nutrafol helps grow stronger nails and provides an essential multivitamin for men and women at various life stages.

In addition to the health synergies for consumers, Unilever also has synergies in its health and wellbeing business. Nutrafol is the dermatologist’s most recommended hair growth supplement, and he has an 80% repeat purchase rate with a premium subscription price of $80 per month. The success of Nutrafol has also led to the creation of a variety of hair health boosters, including scalp serums, shampoos, conditioners, and other nutritional supplements for stress, hormonal support, and toxin cleansing.

Liquid IV is suitable for many types of retail environments. You can place digestive health products next to the sporting goods aisle or his VMS area, the over-the-counter medicine aisle or the drinking water display corner. It is also popular in the travel retail industry where dehydration is common.

The Health and Wellbeing group also includes:

• SmartyPants Vitamins is a line of gummy multivitamins for kids and adults that the company claims is the #1 multivitamin brand on Amazon.
  Amazon
  
• Onnit, Best Known for Alpha Brain Nootropics/Brain Supplements
• Equilibra is a natural nutrition, health and beauty brand from Italy.

With approximately 60% of health and wellness sales occurring through brick-and-mortar retail and 40% through direct-to-consumer sales, Solheim believes the future holds great promise.

Additionally, the range of retailers is broad and includes mass merchandisers, pharmaceuticals, grocery stores, VMS specialty retailers, as well as beauty products (Sephora and Ulta) and sporting goods (Dick’s). Amazon is also a trusted partner for brands.

It will continue in the future

Driven by the cultural shift toward maintaining health and wellness from a young age and throughout life, Solheim continues his quest to add other benefit-focused wellness brands to his portfolio.

“Millennials are the first disruptive generation in health and wellness, and Gen Z is discussing solutions that work for them, whether physically or mentally, with a whole new level of seriousness and openness. ,” Solheim said.

“We are always looking for disruptive brands focused on the health and wellbeing benefit sector, backed by strong, differentiated science with unique business models,” he continued. .

“We keep the company focused and dedicated to its mission.Given our size and reach, we are committed to maximizing economies of scale to support the acquisition of the company. We have been very successful in accelerating growth, which is very unusual,” he concluded.