Unilever Aims to Reduce Product Range by Further 10% in 2014

Unilever, the world’s second-largest consumer-goods maker, plans to narrow its product range by at least another 10 percent by the end of 2014 as it pares costs.

The company has already cut 20 percent of its stock-keeping units and wants to reduce the product portfolio by a further 10 percent to 20 percent next year, Chief Supply Chain Officer Pier Luigi Sigismondi said today at an investor conference in London.

An SKU differs from a brand in that many varieties of products can be sold under the same label.

Unilever has been reducing its number of brands since the turn of the century when it introduced the Path to Growth program. That culled the number of brands it sold from 1,600 to about 400. The Anglo-Dutch company has sought to focus on its biggest labels, including Dove soap and Magnum ice cream.

Unilever also plans to cut its marketing headcount by 12 percent, Chief Financial Officer Jean-Marc Huet said today. The company has about 7,000 marketing employees, spokeswoman Lucila Zambrano said in an e-mail.

Chief Executive Officer Paul Polman said last week that the economic slowdown in emerging markets is here to stay. The company gets more than half its revenue from countries such as India and China and said Sept. 30 that slowing growth in those regions would weigh on second-half sales.

Unilever rose 0.9 percent to 28.72 euros at 4:17 p.m. in Amsterdam, though is still down 0.4 percent this year.

Activist investors may start taking positions in the stock and calling for a breakup to release hidden value, Pablo Zuanic, an analyst at Liberum Capital, said in a note yesterday. He advocates selling all the food lines, which include Knorr soup and Hellmann’s mayonnaise, and keeping only ice cream.

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