Oligopoly Watch (original) (raw)

Oligopoly profile: Unilever

Anglo-Durtch Unilever, one of most international of consumer product companies, announced in 2001 a five-year plan to reduce the staggering variety of brands it was selling to concentrate on developing a smaller set of worldwide brands. This plan named the "Path to Growth" is now in the middle. To this point, however, the growth in the core products has been slower than predicted.

The company had, through scores of acquisitions over the years, amassed a number of national brands (around 4,000). But the company's overhead in managing all those small brands slowed down its growth, while rivals like Procter & Gamble and Kraft concentrated on economies of scale through bigger international brands. Unilever plans to end up with 600 brands and fewer manufacturing plants.

Unilever is a two-pronged company. On the one hand it owns a number of grocery brands in such areas as margarine, ice cream, mayonnaise, and tea. On the other it sells products to the personal and household care market, including soap, cleanser, and laundry detergent. In the food area it competes against Kraft (Altria) and Nestle, and is the world #3 food company; in the care products its main rivals are Procter & Gamble and Colgate-Palmolive. Domination varies market by market, but all three companies have global scope.

It ha a number of world-leading brands. Axe is the major men's toiletries line internationally. Rexona is the #1 deodorant in the world. Unilever's ice cream and margarine brands are the most popular. But rivals Procter & Gamble, Colgate-Palmolive, Kraft, and Nestle all have more billion-dollar brands.

Bestfoods was the last major acquisition, for $24 billion in 2000. Through it, Unilever acquired a large number of new brands including Hellmann's mayonnaise and Skippy peanut butter. Other smaller acquisitions, such as Ben

& Jerry's ice cream, have taken place as well. But the major emphasis lately has been on deacquistions, over a hundred in the last few years

Here are a few of the most recent discards:

• 2000 Sold Elizabeth Arden beauty products line including fragrances, skin care, and White Shoulders brand to US company FFI Fragrances
• 2001 Announced it would sell North American rights to Mazola cooking oil, Argo and Kingsford's corn starches, Karo and Golden Griddle syrups and Henri's salad dressing; no buyer yet announced
• 2002 Sold Canadian brands Benson's and Canada corn starches, St. Lawrence/ St. Laurent corn oil, Crown and Bee Hive corn syrups, Old Colony maple syrup and Old Tyme pancake syrup, to Associated British Foods
• 2003 Sold off North American rights to Pepsodent, Mentadent, Aim, Close-Up to Church & Dwight (Arm & Hammer), 2003
• 2003 sold Brut fragrances and deodorant to Helen of Troy (US company)
• 2003 sold to an investment group Sunlight dish detergent, Niagara ironing aids, Final Touch fabric softener and Rit dye.
• 2003 sold John West canned food operation in Australia to Simplot Australia (US and European operations sold in 1997 to Heinz)

Principal Unilever brands

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