* Archive page for historical reference only. This profile is no longer being actively updated. See active page here *

Unilever USA

Profile subscribers click here for full profile

Until the early 2000s, Unilever's operations in the US consisted of several separate businesses operating more or less independently from one another. During that decade, however, the group steadily streamlined its structure to create a single operating entity, better able to negotiate effectively with retailers. Unilever's unified US portfolio now houses mainly global giants such as Dove, Axe and Hellmann's alongside a dwindling group of local jewels like Promise and Degree. Several more, such as Skippy, Ragu and Wish-Bone, have been sold along with what were once two core businesses. Oral care products including Pepsodent and Mentadent were divested in 2003; followed by the laundry division, including All, Wisk and Snuggle, in 2008. The group no longer markets any home care products in the US. Instead, it bolstered its personal care profile with the acquisition of Alberto Culver in 2010, and other brands.

Advertising

Click here for a listing of Unilever Agency Account Assignments from Adbrands.net.

Brands & Activities

Unilever USA began establishing a single top-level management and marketing structure in 2005 to replace what were previously multiple separate units. The food and beverages business was originally formed in 2000 from the merger of what were once three separate entities: Thomas J Lipton, Van Den Bergh and Bestfoods. Unilever established Van Den Bergh Foods during the 1930s to market its margarines, as well as to manage a string of acquisitions. Lipton, acquired in 1937, remained a separate operating unit until the two companies were merged in 1997. The acquisition of Bestfoods added another large collection of brands to the portfolio. However several of these have since been either combined or divested.

Foods

The foods portfolio is now focused on four areas of ice cream, tea, margarine and culinary products such as mayonnaise or side dishes. The latter category is anchored by the Hellmann's and Best Foodsmayonnaise brands and the general Knorr umbrella. This is still a comparatively minor brand, but has been steadily expanded through the integration of other products such as sauces, dry soups and seasonings previously marketed under the Lipton, now used primarily for the group's local tea business. The Lipton banner is still used for Recipe Secrets dry soups, but this is a minute market by comparison with the condensed or ready to serve wet soup sector. Unilever leads the segment with around 42% share share ($161m in sales).

The group dominates the US margarine sector with brands including Shedd's Country Crock, I Can't Believe It's Not Butter and Promise. However, that market is in steady decline, as a result of the resurgence of butter. Combined sales for 2015 (IRI, 52 weeks to Jan 2016, all channels, Grocery HQ) for the Unilever portfolio slipped 7% to $855m, but it retains over 58% market share, far ahead of competitors ConAgra and Boulder Brands. Country Crock is the top-seller with 28% share, followed by I Can't Believe at 20%.

The group is also one of the two main players in the US ice cream sector (alongside Nestle). Good Humor ice cream bars were slotted into the Unilever portfolio in 1961, followed by Breyer's scoop ice cream. In 1989, Lipton became the leading impulse ice-cream company with the purchase of Gold Bond, owners of Popsicle ice creams in the US. The company acquired Klondike ice creams in 1993. A more recent addition to the portfolio is the Fruttare range of frozen "fruit bars". Ben & Jerry's operates independently. In 2008, Unilever acquired rights to produce ice cream under the Starbucks brand in North America. That license was previously held by arch-rival Nestle.

Long-established as the market leader in US ice cream, Unilever had its lead stolen since 2002 by Nestlé, and it remained in second place for more than a decade. However, the group's acquisition of premium ice cream company Talenti in 2015 handed it back the overall lead with combined 2015 ice cream & frozen yogurt sales of $1.08bn, or 19.2% share, to Nestle's $1.02m and 18.0%. The Good Humour/Breyers business accounted for 9.8% share, and Ben & Jerry's for 8.8%.

Talenti has enjoyed spectacular success since its acquisition by Unilever. Sales have risen from around $160m in 2014 to approximately $250m in 2016. The group has also introduced a number of non-dairy ice cream products under its traditional mass-market brands, made with almond milk. However the group has also encountered stiff competition in 2017 from upstart competitor Halo Top, which makes a range of low calorie and protein-rich ice creams.

Meal replacement range Slim-Fast had been widely regarded for several years as a contender for sale. It has suffered a dramatic decline since Unilever acquired it in 2000 for an excessive $2.3bn. Riding high at the time of its purchase, its sales were devastated from 2002 onwards by brutal competition from alternative diet trends, especially Atkins and other low-carb regimes. Unilever introduced its own low-carb range at the start of 2004, a collection of 18 products spun off from existing house brands such as Lawry's, Ragu, Wishbone, Skippy and Lipton, all sharing the CarbOptions banner. That was eventually phased out as the Atkins craze faded.

In 2004 and 2005, Unilever wrote off more than €1bn of goodwill at group level relating to the Slim-Fast business. The popularity of those other diets faded during 2006, prompting a considerable improvement in Slim-Fast's sales and market share. However, at the same time, the meal replacement segment as a whole has declined as a result of an increase in popularity of simple healthy foods such as fruit and vegetables. In 2007, model Rachel Hunter leant her support to the brand, and Unilever was at pains to reduce the focus on weight loss in favour of a more emotional brand message, which encouraged users not to lose weight for the sake of it, but to find their own ideal weight and size, or "Find Your Slim". Nevertheless, there was repeated speculation that Unilever was considering the sale of the brand. A deal was finally agreed in July 2014 with the sale of a majority stake to private equity firm Kainos Capital.

Several other food brands have also been sold. The Lawry's seasonings and sauce business was sold in 2007 (to McCormick), as was the range of Bertolli olive oils (to Grupo SOS). In summer 2012, Unilever sold its remaining frozen foods products to rival ConAgra for $265m. These comprised Bertolli-branded frozen ready-serve meals, and a line of frozen Chinese meals under license from the PF Changs restaurant chain. Until recently, Unilever also owned Skippy peanut butter, the local #2 in the US with around 18% market share. That that brand was sold in 2013 to Hormel for $700m, around twice its annual sales. That same year, Wish-Bone salad dressings (#3 in the US behind Clorox and Kraft) were sold to Pinnacle Foods for $580m. More surprisingly perhaps, Unilever sold its market-leading pasta sauce business, comprising the Ragu and Bertolli brands, in May 2014 to Mizkan of Japan for $2.15bn. That business was the US #1 in 2013 with sales of $730m and 33% share, almost twice rivals Campbell and Heinz (IRI, 52 weeks to Jan 2014, all retail channels, Grocery HQ). See Unilever Foods for more.

Personal Care

Echoing the consolidation of its food units, Unilever's various home and personal care subsidiaries were combined in 1997 from the merger of separate entities Lever Brothers USA, Cheseborough-Pond's and Helene Curtis. The group's lead product now is Dove, a best-selling cleansing product which has now been extended successfully into skincare, deodorants and haircare. In a similar fashion, Suave, originally a haircare product has also been expanded with deodorant and skincare extensions. Those two families are supported by Lever 2000 and Caress soaps and beauty bars; Pond's and Vaseline skin care products; Q-tips cotton swabs and Axe and Degree deodorants. In the haircare sector, Unilever's heritage brand Thermasilk was relaunched in the US in 2007 under the name of global brand Sunsilk. However, the brand struggled to gain followers and was eventually discontinued in 2010.

That same year, Unilever took more assertive steps to strengthen its portfolio, making its biggest acquisition for several years with the $3.7bn purchase of haircare and skincare company Alberto Culver. The key brand in the Alberto Culver acquisition was Tresemmé, which accounted for more than a third of that company's sales by 2010. Although most consumers only became aware of that brand in the 2000s, it is actually more than 60 years old. Acquired by Alberto-Culver in 1959, it had only minimal sales before being repositioned in the early 2000s as a "professional affordable" salon-quality product for sale to ordinary consumers. Performance was strengthened considerably by successful sponsorships of TV shows including Project Runway and The Fashion Show. In 2009 it became the top-selling styling brand in the US, and also has a growing international footprint, mainly in Europe. Other brands joining the Unilever portfolio included super-premium haircare brand Nexxus, as well as ethnic haircare brands Motions, Soft & Beautiful and TCB. Alberto Culver's skincare portfolio included St Ives and UK-based Simple, introduced in the US in 2011, as well as North American rights to Noxzema. A separate deal in 2009 added the TIGI salon haircare range to the group's portfolio, and a new shampoo range was launched in 2012 under the Clear brand. The addition of Alberto Culver almost doubled Unilever's share of the US haircare sector.

According to IRI figures (ye Aug 2014 in GHQ) Unilever had stolen the top spot in the US shampoo segment in 2014 with combined sales of $662m, equivalent to 31.2%, ahead of $591m (27.8%) for P&G. In the conditioner & creme rinse segment it was narrowly behind P&G with sales of $463m (23.6%).

Since then, the group has focused on the prestige skincare market with a series of acquisitions of high-end products including Dermalogica, Murad, REN and Kate Somerville. Towards the end of 2017, it also added premium ethnic hair and skincare brands SheaMoisture and Nubian Heritage, as well as Schmidt's Naturals. Two new homegrown products were launched at the beginning of 2018, Love Beauty and Planet and ApotheCare Essentials.

These acquisitions were preceded by several major disposals, prompted by intense pressure from competitors such as Procter & Gamble, Colgate-Palmolive and L'Oreal. The group steadily pruned the weaker brands in its HPC portfolio during the 2000s. It sold its men's toiletries brand Brut in the US in 2003 to Helen of Troy, and all of its prestige fragrances, formerly Unilever Cosmetics International, to Coty in 2004. Haircare brand Finesse was sold in 2006 to British company Lornamead. After several years in which it was gradually squeezed out of the oral care market by competition between Colgate and P&G, Unilever sold its entire North American oral care portfolio, including Mentadent, Pepsodent, Aim and Close-Up toothpastes and toothbrushes to Church & Dwight in 2003.

The group experienced a similar squeeze in the home care market, once its biggest US business. Despite some success with the introduction of liquid detergents in the 1990s, Unilever's share fell steadily in the face of aggressive competition from P&G. Unilever finally conceded defeat that year, putting its North American laundry portfolio, comprising detergents All, Wisk and Surf and Snuggle fabric conditioner up for sale. A deal was signed in July 2008 to transfer the business to private equity fund Vestar Capital Partners for a total of around $1.5bn. The Unilever brands were merged with Vestar's existing subsidiary, private label detergent manufacturer Huish, to form a new company, Sun Products. The Sunlight dish care range was surrendered two years later. As a result, Unilever no longer markets any home care products in the US.

Total revenues for Unilever in the US in 2014 were €6.68bn, or approximately $8.9bn.

Unilever Canada markets a broadly similar range of products as in the US. There are also several local jewels, not sold in the US, including Imperial margarine, Red Rose and Salada teas, and a single home care product: Vim household cleaner.

Background

The United States was one of the first regions targeted by Lever Brothers in the late 1880's, and the company's first soap factory there was acquired in 1898 to manufacture Sunlight and later Lifebuoy and Welcome soaps. However for most of its first few years, Lever's success in America was limited at best, not least because the company insisted on applying the same tried and trusted methods it used elsewhere, but which didn't work with US consumers. For example, Lever launched its Sunlight bar soap in the same small size as it was sold back home. Americans, however, were unimpressed, preferring the better value which larger bars seemed to offer. (Procter & Gamble's Ivory killed two birds with one stone by retailing a large bar with a notch down the middle so it could be easily split into two handier-sized pieces). Lifebuoy was also a slow seller because of its strong carbolic odour, although the company achieved modest sales with the softer, filled soap Welcome.

Lever's fortunes finally began to change with the appointment of Francis Countway as its first American-born general manager in 1912. He initiated a complete restructuring of the business, eventually dispensing with the Sunlight brand altogether. Above all, he threw considerable resources into advertising. In addition to Sunlight and Lifebuoy, the company had begun to import a flaked laundry detergent it produced in Britain under the name Lux Flakes. It was not widely marketed in the US, however, until 1915 when Lever's advertising agency J Walter Thompson suggested presenting the product as a premium product to be used for fine fabrics such as silk, then becoming increasingly popular and affordable in America. New manufacturing facilities were added to handle production, and a huge advertising campaign was launched for Lux, with spectacular success. "Anything safe in water is safe in Lux" promised the advertising for the product. Sales of Lux jumped from around 10,000 cases in 1915 to well over 1m by 1918.

During the 1920s, Thompson's advertising for Lux became increasingly sophisticated. In 1924, the agency invited Lux users to write in to submit personal testimonials for the product. More than 50,000 letters were received. Although these were almost all from ordinary housewives or working women, many recounted tales of how they had used Lux to solve cleaning issues on behalf of celebrities. Thompson used these stories as the basis for a new advertising campaign (for example a hotel housekeeper's tale of "The King of England's daughter, The Queen of Sweden: How their precious possessions were restored to dainty loveliness"). Other letters explained how Lux users were also using the product as bath soap or to wash dishes. As a result, and despite opposition from his superiors at Unilever in London and Rotterdam, Countway took the decision to introduce a new bar form of Lux under the name Lux Toilet Soap. Rather than rely on secondhand testimonials, Thompson began to approach celebrities such as society figures or movie stars directly for their explicit endorsement of Lux. By the end of the decade this allowed the brand to claim "Nine out of ten screen stars use Lux".

By this time, the company's other products had also finally taken off. Sales of medicinal-smelling Lifebuoy soap had also begun to grow in the wake of the great influenza epidemic of 1918, and a floating bath soap Swan had been launched to compete against Procter & Gamble's Ivory. Another lower-priced laundry powder, Rinso, ("Washes clothes whiter", according to advertising from Ruthrauff & Ryan) also experienced a surge in sales as a result of the growing popularity of the first automatic washing machines. In 1923, with influenza fears on the wane, Countway ordered the reformulation of Lifebuoy to reduce its odour, and relaunched it with a new advertising campaign by the William Esty agency. This promised that the product was especially effective against what was described in advertising as "body odor", a new concept at the time, supposedly invented by Countway himself after a sweaty morning on the golf course.

By the late 1930s, Unilever's soaps and detergents had made the company a major force in the US. Countway was himself celebrated as one of the country's most astute businessmen. In 1939, his salary and bonuses were reported to have totalled $470,000, making him the second highest-paid businessman in America after MGM's Louis Mayer. Singing his praises in a mid-1940s profile, Time magazine described him as "an elegant patrician", who "sometimes seemed more like a Renaissance prince than what many people called him: 'the greatest advertising man in the US'". The company had also begun to diversify, acquiring the Thomas J Lipton tea business in 1937, followed by toothpaste-manufacturer Pepsodent seven years later (from advertising tycoon Albert Lasker, the founder of what was later Foote Cone & Belding). Pepsodent's youthful president, Charles "Chuck" Luckman, often described as the "boy wonder" of American business for the way in which he transformed sales of that product, replaced Countway as head of Lever in the US in 1946.

By now, however, an important new force had emerged in the laundry market with the invention of the first synthetic detergents by Lever's main rival in the soap business, Procter & Gamble. Although the two companies were already established as competitors, it was the limited introduction of the first synthetic detergent Dreft by P&G in 1933 that marked the beginning of a new bitterness between them. Lever mounted a counter-attack by attempting to match P&G's successful diversification into food products, launching a direct rival to the latter's Crisco in the form of Spry vegetable shortening, introduced in 1936. By 1939 Spry's sales had grown to around three-quarters of Crisco's and a brutal price war resulted. Lever strengthened its food business further in 1948 by acquiring its first American margarine business, The John F Jelke Company.

However, the rivalry between the two companies had already reached a new intensity following P&G's launch of Tide, an even more effective synthetic detergent. With the benefit of a huge advertising campaign Tide quickly established itself as America's leading washing powder. (His "boy wonder" image tarnished by this reverse, Luckman left Lever abruptly in 1950, and subsequently reinvented himself as one of the country's leading architects). By the mid-1950s, Unilever's share of the US laundry detergent market had more than halved as a result of P&G's expansion. Lever responded by acquiring rival synthetic detergent All from Monsanto in 1957. However the rivalry between Unilever and Procter & Gamble rages on today.

From the 1960s onwards Unilever developed its business in the US with a series of acquisitions. Its most ambitious was the speciality chemicals company National Starch, purchased in 1978 for $485m, then the biggest-ever acquisition of a US business by a foreign company. (It was later sold off to ICI). Other bolt-ons included Lawry's Foods in 1979, Ragu Brothers in 1986, Cheseborough Pond's in 1987, the Faberge/Elizabeth Arden and Calvin Klein fragrance businesses in 1989, and Helene Curtis haircare products in 1996. Well over 100 purchases were made between 1992 and 1996, over half of them in foods, with most of the rest in detergents and personal products. In 1998, the margarines business, which had operated under the Van Den Bergh name, was folded into the main Lipton business. Three further key deals came in early 2000. The group agreed to acquire US slimming snacks and drinks company SlimFast for $2.3bn, followed by independent ice-cream company Ben & Jerry's for $326m. Then the group offered $18.4bn in cash to acquire food company Bestfoods, which controlled a substantial portfolio of brands in both the US and around the world. The American company immediately rejected the price, but agreed that a merger would be beneficial. The deadlock was broken in June when Unilever agreed to increase its bid, paying a final price of $20.3bn, making it the biggest takeover in the global food industry since KKR's purchase of Nabisco purchase.

As part of the general consolidation of the portfolio, Gorton's, one of the country's biggest frozen seafood manufacturers, was sold in August 2001 to Japanese company Nippon Suisan for $175m, along with affiliated Canadian company BlueWater. A clutch of other brands, mostly inherited from Bestfoods, were also sold. They include Mazola cooking oil products, Argo and Kingsford's corn starches, Karo and Golden Griddle syrups, Henri's salad dressing, Rit dye and Niagara starch fabric care brands. The buyer was a subsidiary of Associated British Foods.

Last full revision 7th June 2016

* Archive page for historical reference only. This profile is no longer being actively updated. See active page here *


All rights reserved © Mind Advertising Ltd 1998-2019