Consumer goods giant Unilever has prioritized restocking shelves with popular and larger sizes of its products as U.S. consumers stock their pantries, kitchens and freezers with more ice cream, condiments and easy-to-prepare meals — even if that means some of its other items are out of stock at retailers.
Food and beverages have been flying off the shelves in recent weeks as consumers limit trips outside the home or prepare for stay-at-home orders being put in place across the country. Ice cream sales, for example, have risen 20% during the four-week period ended March 21 compared to a year earlier, according to Nielsen data. Other products including canned meats, beans, soups and dairy also have posted robust increases during the same period.
Jostein Solheim, executive vice president of foods and refreshment for North America at Unilever, said the CPG giant is working with retailers to make sure they are carrying items such as its 30-ounce Hellmann's jar of mayonnaise or the most popular Knorr meal mix flavors. In some cases that means Unilever is "deprioritizing" product variations like a squeezable Hellmann's bottle or smaller-sized items for now.
"We want the whole Unilever portfolio to be back in stock everywhere as soon as possible," he said. "But we will prioritize the core items — and that we have done across the portfolio to make sure that the highest demand is met immediately. ... Normally we wouldn't want to be out of stock on anything in a store."
Solheim said Unilever is seeing "a substantial increase in purchases" for its food products, led by Knorr, condiments such as Hellmann's and Sir Kensington's, teas like Lipton and its ice creams. The growth in ice cream, which includes Ben & Jerry's, Breyers and Magnum, has been less robust as the products compete for space at homes with meals in consumers' freezers.
"I think this has been a moment when companies really do have to step up. I think food through the beverage companies have a unique role to play because, let's face it, we are the people that feed America," Solheim said. "As an industry, we have an important role in the crisis: to provide the food and as much normalcy as we can in terms of what's available."
Large CPG companies have remained cautious publicly as to how long the surge in demand for their products will last, preferring to keep a watch on sales in the coming weeks to get a better feel for the long-term impact from the coronavirus outbreak.
"I think this has been a moment when companies really do have to step up. I think food through the beverage companies have a unique role to play because, let's face it, we are the people that feed America. As an industry, we have an important role in the crisis: to provide the food and as much normalcy as we can in terms of what's available."
Executive vice president of foods and refreshment for North America, Unilever
Solheim said there is uncertainty as to how long people will be spending more time at home. Unilever is seeing demand fluctuate in some areas "depending on the phases that you're in as a community, as a region," he said. Sales in the coming months also are expected to be impacted by factors such an increase in unemployment, a recession and the struggle of small businesses, even after the virus has abated.
"Obviously, these are important products during a time like this. We're seeing substantial pantry loading, as you would say, people are stocking up and making sure that they have as much as they can afford on hand," he said. "We see that obviously people are cooking and providing for their families in their homes more than usual and consuming more, but where net net that will land we don't know yet."
The manufacturer has joined dozens of other CPG companies including J.M Smucker, Nestlé and Conagra Brands in providing relief to its workers.
Last month, Unilever said it would pay its employees and contractors who work on its sites for up to three months. The company also rolled out a $540 million relief initiative to assist its “most vulnerable” small- and medium-sized suppliers and announced it would provide credit to some small-scale retail customers. In addition, Unilever has donated more than $8 million in products to help those in the U.S. impacted by the pandemic, including $1 million of its Knorr meals and side dishes.
Solheim said even as CPGs work aggressively to protect their employees and help its communities, Americans shouldn't expect to see their local supermarket run short of food and other products when they go shopping.
"At the moment, we are seeing an enormous surge in demand and the whole system it's working hard to catch up with that," he said. "But it's working and it's working well. America is not going run out of food or soap."