Unilever is spending over €150 million to revamp its European homecare business’s supply chain, a senior executive told Reuters yesterday.
The move intends to make up for years of underperformance and tap into young, post-pandemic shoppers.
Unilever’s European homecare business – whose brands include Persil and Omo detergent – plans to make improvements, including building factories and adding warehouses and new production lines to existing facilities.
The push began in early 2023 and will continue into 2026.
The news comes just months after reports that the consumer goods company would be cutting a third of all office roles in Europe by the end of 2025.
'Rewire'
A top company executive also told Reuters that the European homecare business is increasing its promotion, research and development spending by 40%.
Unilever did not disclose this amount in euros.
Eduardo Campanella, the head of Unilever’s global homecare business, told Reuters, that Unilever was “completely redesigning” its European supply chain, adding that the changes are helping the company invest in better products, marketing and store promotions.
The company is also deprioritising some brands and upgrades to existing products.
Campanella said, “We have not invested properly in Europe because we were not growing. So it’s a chicken and egg problem.
“Europe was quite stagnant and then the (company-wide turnaround) came as a shock of culture into the organisation.”
He added that the new strategy helped his business “rewire a little bit.”
Unilever’s global homecare business reported 3.3% underlying sales growth in the first half of this year.
Campanella said Unilever’s Europe homecare business meanwhile saw nearly 13% growth in that period.
Sales volume growth made up about two-thirds of that increase.
The company is growing ahead of the wider market, with Euromonitor International estimating that the western European homecare market will grow 3.7% to $36.6 billion this year.
Wonderwash
Campanella said demand for some products has grown so unexpectedly that the company had to delay some innovations next year as it couldn’t keep up.
He attributed the growth to investments in new products reflecting changing consumer habits, such as a laundry detergent aimed at shorter washing times.
“More than half of the total loads in Europe are short-cycle load, but not a single product was designed to address short cycle,” Campanella said.
He added that Unilever pitched the product to European retailers about two years in advance, hoping to woo them in the middle of a cost-of-living crisis.
Campanella said Carrefour asked to launch Unilever’s Wonderwash short-cycle product earlier than other French retailers, and the consumer goods company gained eight points in its liquid detergent segment at the retailer after the launch of its product.
He also added to about 800 Tesco Express stores as the retailer sought to attract younger shoppers from smaller, urban households.
Carrefour and Tesco did not immediately respond to requests for comment.
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