NEWS
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8 ASIAN TRADER 17 NOVEMBER 2023
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Packaged goods-makers in-
cluding Unilever and Nestle
disappointed investors with
weak third-quarter sales vol-
umes, but that could change
in the coming months as price
increases moderate.
Companies have hiked
prices since the Covid-19
pandemic to make up for
higher costs, prompting
some shoppers to look for better
deals. The slide in sales volumes
of big brands only grew worse
after the Ukraine war sparked a
cost-of-living crisis.
Top US and European
investors this year have flagged
their concerns about high prices
to consumer goods companies.
But even though prices are
beginning to moderate,
consumers have not rushed
back.
Companies need to do more
to convince investors that sales
volumes can return to growth,
Richard Saldanha, an Aviva
portfolio manager, said in an
interview.
“Across the board, organic
growth has been price driven
and what we want to see is
more of a balance between
volume and price,” he said,
noting the cost of raw materi-
als has decreased and that he
hopes prices moderate as a
result.
Unilever met market
expectations for third-quar-
ter sales growth after raising
prices at a slower rate.
“In terms of where pricing
is going from here, I think
we’ll see a continued fall in
underlying price growth, but
I don’t think that’s going to go
negative,” chief financial officer
Graeme Pitkethly said.
Nestle, the world’s biggest
packaged food maker, last
Thursday posted lower-than-ex-
pected nine-month sales growth
as higher product prices made
shoppers balk.
Similarly, Tide detergent
maker P&G this month report-
ed weak sales volumes but said
this was stabilising and would
start to pick up.
Goods majors are struggling to win back consumers
Lee Stiles of the Lea Valley
Growers Association has
stated that there is likely to be
reduced availability in the fruit
and vegetable aisle again in
2024, saying all of this came
true this year, yet nobody
seems to be aware that this will
continue.
Writing in Fruitnet, Stiles
explained how the govern-
ment is set to review the
horticulture supply chain
though at the same time, it is
also putting pressure on
supermarkets to reduce food
prices. As a result, supermar-
kets are already asking
growers for lower prices at a
time when energy costs are
increasing. In addition, hidden
outlays such as standing
charges and transportation
costs are going up by 600%,
and labour costs are rising.
“It is at this time of year
that growers negotiate
prices for next year and
make decisions on
whether to plant in Decem-
ber/January ready for
February/March. If prices are
not right, this could shorten
the British growing season to
around six months for some
producers.
“This year, during the
empty shelves crisis, the
government told supermar-
kets to source food from
further afield. Overseas
growers decided to send their
produce to Europe instead of
the UK for higher prices as
British supermarkets refuse to
flex from fixed contracts.
“Next year, there will
simply be less fresh produce
from certain key sources,
regardless of whether they
experience adverse weather
events. Plant viruses are rife,
and thousands of acres of
overseas tomatoes and
peppers will be wasted.”
Stiles further warned that
the majority of fresh produce is
waived into the UK without
virus checks on the border.
This will again increase food
prices, and overseas growers
will again send produce to the
highest-paying market, which
will not be the UK.
‘There will be more empty
shelves in 2024’
Price rises slow, but
Price rises slow, but
shoppers remain shy
shoppers remain shy
Higher prices boost
Higher prices boost
Unilever sales
Unilever sales
Price rises continue to boost sales
at Unilever, the FMCG giant behind
popular brands like Dove soap,
Marmite and Magnum ice-cream.
Unilever has reported underlying
sales growth of 5.2% for the third
quarter of the year, after it hiked its
prices again. Average prices rose by
5.8% year-on-year in the quarter,
while sales volumes fell by 0.6% –
suggesting some customers shifted
to cheaper brands.
Unilever, which has been
passing on its higher costs to
consumers, reports that prices
continued to moderate as inflation
eased.
Premier Foods
Premier Foods
acquires FUEL10K
acquires FUEL10K
Premier Foods has broadened its
breakfast segment with the
acquisition of protein-enriched
breakfast brand FUEL10K. The
deal, worth a cash and debt-free
price of £34 million, is expected to
enhance Premier Foods’ earnings
in the first full year following the
acquisition.
This strategic move follows the
successful launch of Ambrosia
porridge pots by Premier Foods
and comes on the heels of its
successful integration of The Spice
Tailor, which led to a significant
revenue boost. FUEL10K had
reported a pre-tax profit of £0.5
million in the last fiscal year.
Greens Retail signs with
Greens Retail signs with
Snappy Shopper
Snappy Shopper
Snappy Shopper announced it
partnership with Scottish retailer,
Greens Retail, to power its new
Home Delivery and Click and
Collect offering.
After Greens Retail had
announced a five-year growth plan
with Nisa, the addition of Snappy
Shopper’s technology support is a
bold statement of intent. In
addition, Greens adding former
Snappy colleague Chris McGregor
to bring a wealth of home delivery
experience to the business in his
role as Head of Online and Digital.
The alliance underlines Snappy
Shopper’s advantages to retailers
in a competitive market.