Prestige Beauty contributes to Unilever's Q2 2021 C&T sales growth

But will rising commodity prices and a deceleration of e-commerce affect full-year figures?

Consumer goods giant Unilever has singled out its Prestige Beauty business, recently bolstered by the acquisition of skin care brand Paula’s Choice, as a driver of sales growth in Q2 2021.

Overall, the company’s underlying sales growth for the quarter was 5.0%, while H1 2021 growth saw a 5.4% uptick on the prior year period.

Stripping back the impact of Unilever’s Home Care and Foods & Refreshment businesses, the Beauty & Personal care category was the company’s under performer with underlying sales growth of just 3.3% in H1.

That said, skin care grew in double digits as did the Prestige Beauty brand category, with recent purchases in this area singled out by Chief Executive Officer Alan Jope as potential future growth drivers.

In his CEO statement, Jope said: “We are making good progress against the strategic choices outlined earlier this year, including the development of our portfolio into high growth spaces.

“Prestige Beauty and Functional Nutrition grew strongly and we recently announced the acquisition of digitally-native skin care brand Paula’s Choice.”

In skin care, Vaseline and Ponds also saw double digit increases, but this was offset by a dip in demand for skin cleansers following a sharp increase in demand during 2020, related to Covid-19.

Carmen Bryan, who is Consumer Analyst at GlobalData, observed that Unilever’s “beauty and personal care and food and refreshment brands are reaping the benefits of its continued investments and brand development, as well as now ingrained consumer behaviours since the onset of the pandemic”, adding: “It’s interesting to see Unilever’s focus on digital-first brands, such as Paula’s Choice, developing its presence in the high-growth premium skin care segment and leveraging the explosive online beauty trends."

That said, Bryan also warned that “rising commodity prices, supply chain disruptions and the deceleration of e-commerce as shop doors open again will paint a challenging scene for Unilever in the coming months.”

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