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Should Unilever Sell Flora

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Shoud Unilever sell its underperforming Flora margarines business and buy more personal care companies?
Jiayin Lyu, University College Dublin

Executive Summary Flora is a famous brand of margarine. Sold in most places over the world. It is

produced by Unilever and sold in other parts of the world under the brand name of Becel. However, people start to doubt about the safety of margarine. And in this essay, it will be analyzed that why Unilever should sell the Flora margarines business but purchase personal care brands especially high-end personal care companies.

Health The initial problem of Flora margarines was called health crisis. Initially, Unilever claimed that Flora is absolutely healthy. Even its slogan said “Flora love your heart”. However, is that really means Flora, which is man made butter good for people’s health? Expert hold different opinion. In Dr. John Briffa’s essay The facts about why margarine is worse for us than butter. Margarine is made from chemically processed vegetables oils which have generally been bleached, coloured, deodorised and flavoured to make them ‘edible’. That means it is not a very proper food for people have it in daily life. The recent Food and Chemical Toxicology study seems to be nothing more than the usual pro-margarine propaganda. (John, 2006) So the advice of John is do not eat any Flora Margarine. Initially, even though the Food and Chemical Toxicology study found margarine had lower cholesterol levels. But that does not mean people lower their level of cholesterol is because of eating margarine. Secondly, lower eating cholesterol is not translates into benefits for health. Many studies have looked at this, and 17 of these were assessed in a study published in 2005 in the Annals of Internal Medicine. Overall, the studies led to an average 10 per cent decrease in cholesterol levels, but there was no decrease in overall risk of death.(John,2006) The most important thing is that arsenic and cyanide can not be good for people. Even decrease the cholesterol levels, we can not really rely on the margarine.

Financial Performance In order to get the importance of Flora Margarine. We still need to look at its

Financial performance. Even it is not easy to get the very detail of Flora sales. We still can do some analysis based on available data.

(source: FT, Bloomberg)

According to the analysis by Scheherazade Daneshkhu and David Oakley. We found that sales fell 2.7 percent last year to €48.4bn. These fell caused by such consumer brands as Dove soap, Persil detergent and Flora margarine. However, as Unilever’s core brands. Persil and Dove can hardly be sold. But when it comes to Flora, the sell could happen. As more an more people no longer believe that Margarine is better than real butter. They will not take the risk to keep use them. In that case, we can not see the bright future of Flora. Actually Flora margarine did not make the good contribution to Unilever.

Personal Care Brands

In order to know if Unilever should buy more personal care companies. We need to analysis its existing brands and market share. We can find that in 2012, the share of personal care in Unilever is 35%. According to the data of Wikipedia, there are more than 100 personal care brands that belongs to Unilever. Which including home care brands as laundry products. However, the biggest competitor of Unilever is P&G. According to the pie chart. We can find that there are more ratio of personal care and

home care are higher than Unilever. That means in this period of competition, P&G is ahead of Unilever.

However, the fact is. P&G already started sell its brands in both food and personal care area. But Unilever had already bought some more personal care brands. The overall personal care consumption market is depressing now. But what Unilever did is set to buck the trend. But In order to cut short the food market, it should increase its business in some certain area. According to he website of Unilever, it is said that in May, 2015, Unilever will purchase British top grade personal care brand REN. This is a signal that Unilever starting set food in High-end cosmetics market. According to the research of REN, we can found that it own Face, Body, Spa and many other personal care products production line. REN has a great variety of products. Only in face care area, it has anti-wrinkle, eye care, sensitive skin and other brands. In 2014, the sale of REN is €40 million. Except this purchase, at the end of 2014. Unilever announced purchased CAMEE and ZEST most business that used belonged to P&G. At the beginning of 2014, Unilever declared it will purchase French High-end skin care brands IOMA. (Trefies, 2015) Actually, when Unilever keep increasing its personal care business, its negative wealth added catch people’s eyes at the same time. According to the 2014 fourth quarter financial report of Unilever, it caused the worst performance in five years. In 2014, the total revenue of Unilever decreased 2.7%, which was € 48.4 billion. Unilever had to admit, emerging market of consumer demand leads to large retailers stocking. The new layout became questionable. People may doubt about whether Unilever should decrease food business with increase personal care business. Vice brand president of Unilever Vasiliki Petrou said, it is a good supplement of brand portfolio of Unilever. Actually, Unilever should buy the right personal care company. Even though the core reason is compete with P&G. The good news is that Unilever can still handle free cash flow of € 3.1billion. And we can believe and advise Unilever find food purchase opportunity in personal care area. But one thing is more important is that

Unilever core personal care brands are Dove, Lux, Clear and Ponds. In 2014, the sale of those brands are € 14.7billion. Which account for 36.6% of the total sale of Unilever. But the high-end personal care products are still nearly empty. However, P&G, the main competitor of Unilever, own SK-II, Max Factor, beauty and Sk. In addition, P&G also have more luxury perfume brands than Unilever.

According to this pie chart. We can find that in 2014, the Personal care business account for 47% in Unilever division share. That means the purchase for personal care business was remarkable. Recommendation In 5th Dec 2014, Unilever announced plans to split out its struggling margarine and olive oil spreads business as a distinct unit, separate from the main foods division. Though brands such as Flora, Becel and Rama make Unilever the world's biggest manufacturer of margarine. (Adbrands Weekly Update, 2014) This means Unilever realized that the curtail of food business should start from margarine. In 2015, Unilever had already split out its spreads as a separate unit standing apart from the main food group, prompting speculation that it might ultimately to sell the business. In that case, we recommend that Unilever should select more organic food business in the future with keep purchasing more personal care companies. Because with the developing of most countries, people pay more attention to beauty and health than before.

So we suggest that Unilever should purchase more luxury personal care products as well as luxury perfume business. The main reason of that is Unilever and P&G have similar company structure. In order to compete with P&G, Unilever should not have any short slab. In recent years, the major products of personal care industry as soap and shampoo faced the decrease of sales. In that case, we advise Unilever can purchase other type of personal care products. To find a new growth point. The last recommendation is what Unilever is doing now. Keep developing Sustainable Plan. This is not only for the company’s future but also benefit the whole world. So as Unilever CEO Paul Polman said, it also gives a tremendous purpose to what we are doing as a business that creates an enormous energy here and employee engagement that I ’ m sure will explains half of the growth that we will be producingj. So it is necessary to embed sustainability into the business – accept this is a journey of cultural transformation.(Sally, 2011)


1. John Briffa, (2006), The facts about why margarine is worse for us than butter, Available at [Assessed 10/03/2015] 2. Scheherazade Daneshkhu, (2015), Frustrated Unilever investor call for shake-up

Available at TEVEKeHT [Assessed 11/03/2015] 3. Trefis Team, (2015), Unilever Continues Expansion of Its Personal Care Portfolio With Acquisition of REN Skincare, Available at on-of-its-personal-care-portfolio-with-acquisition-of-ren-skincare/2/ [Assessed 15/03/2015] 4. Sally Uren, (2011), 6 ways Unilever has achieved success through sustainability and how your business can too, Available at

h-sustainability-and-how-your-business-can-too [Assessed 16/03/2015] 5. Adbrands, (2014), Selected Unilever margarine advertising, Available at [Assessed 12/03/2015] 6. Zoë Harcombe, (2013), The British Heart Foundation & Flora pro.activ – an

unhealthy relationship, Available at -unhealthy-relationship/ [Assessed 17/03/2015] 7. Scheherazade Daneshkhu and David Oakley, (2015), Paul Polman ’ s socially responsible Unilever falls short on growth, Available at V20ABdUc [Assessed 18/03/2015] 8. Anonymous, (2008), Unilver's success with palm oil, Available at n [Assessed 13/03/2015] 9. Dong Fang, (2015), Unilever contrarian trying to do mergers and acquisitions, Available at,20150310484430184.html [Assessed 12/03/2015]

Appendix Exhibit 1: The proportion of Radio Advertising

: Source: Google

Exhibit 2: The ratio of TV Advertising

Source: Google

Exhibit 3: Sample Products of Unilever

Source: Walmart Supermarket

Exhibit 4: How The Giants’ Earnings Stacked up

Source: Google Exhibit5: Unilever: Productwise Share (CY12)

Source: Unilever

Exhibit 6: P&G Productwise share (FY12)

Source: P&G Exhibit 7: Financial Index of FMCG Market

Source: Google Exhibit 8: U.S. Personal Cleansing Category

Exhibit 9: Brands Interview of Unilever

Source: Unilever Exhibit 10: Brands Overview of P&G

Source: P&G

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