A change to the recipe for Flora has hit sales in the UK this year, prompting Unilever to return to the original

A change to the recipe for Flora has hit sales in the UK this year, prompting Unilever to return to the original

Unilever today (24 October) posted a drop in underlying third-quarter revenue from its foods division, as sales from its spreads business fell.

The Flora and Becel manufacturer booked a 0.3% decline in underlying foods sales to EUR3.2bn (US$2.73bn) for the three months to the end of September. Underlying sales volumes were 1% lower.

Unilever said its spreads division, which accounts for around a quarter of foods sales, showed "a progressive improvement". Sales, however, were down amid "weakness in the market" and lower prices, reflecting "benign" commodity costs.

The company's dressings business grew, with Unilever citing the roll-out of squeezy packaging for its Hellmann's mayonnaise in Brazil.

Knorr, the consumer goods group's biggest brand by sales, "continued to grow well", Unilever said. The brand's core range "increased penetration" while its jelly bouillon and baking bags also helped sales.

Underlying sales from Unilever's refreshment arm, which includes its ice cream business, were up 0.7% despite 1.6% fall in volumes.

Unilever described the performance of its refreshment business, which also includes its Lipton tea portfolio, as "disappointing".

A warm summer in northern Europe helped ice cream sales but Unilever pointed to a "weaker performance" in the south of the continent, notably Italy, its biggest market for ice cream.

Unilever, which also produces a range of home and personal care products, reported a 3.2% increase in underlying company sales to EUR12.5bn.

Earlier this month, Unilever warned third-quarter sales would be below expectations due to the slowdown in emerging economies and weak growth in developed markets. The warning hit Unilever's shares. At 09:49 BST, Unilever's shares had dipped 0.08% to 2,494 pence.

Reflecting at the company's results for the first nine months of the year, Unilever CEO Paul Polman said a 4.4% increase in underlying sales was "ahead of our markets".

He said: "Emerging markets continue to be the main driver of our growth and, despite the current slow-down, they remain a significant growth opportunity which the company is well-placed to capitalise on. We have not yet seen an improvement in market conditions in North America or Europe. 

"We expect to report a sequential quarterly improvement in underlying sales growth in the fourth quarter driven by a strong innovation pipeline. We remain focused on achieving another year of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow."

Click here for just-food's two-part interview with Polman, held last week, in which the Unilever boss discussed emerging markets and the performance of its foods business.