Welly bandages
Unilever, the $64 billion international consumer product goods (CPG) giant, just reported strong 4.4% underlying sales growth in the first quarter, led by a 7.4% increase in its Beauty and Wellbeing division, one of its five reporting groups.
In the earnings call, CEO Hein Schumacher called out the strong performance of the company’s “power brands” which accounted for 75% of company turnover and generated 6.1% growth. The power brands include Dove and Rexona, part of its Personal Care group; Knorr, a nutrition brand, and Sunsilk, a brand in its beauty portfolio along with TRESemmé.
He also praised the double-digit growth in its Health and Wellbeing segment, which sits within its Beauty and Wellbeing division. It is a cluster of seven wellness-forward brands that complement its prestige and core beauty offerings, as well as its performance-based personal care deodorant, skin cleansing and oral care brands.
Through the company’s health and wellbeing initiative, it is tapping a massive $5.6 trillion market that is expected to reach $8.5 trillion by 2027, an 8.6% compound annual growth rate (CAGR), according to the Global Wellness Institute.
The nearly $200 billion nutritional supplements sector of the wellness market is growing even faster at 9.1% CAGR through 2030.
Opportunity Calls
Unilever sees a ripe opportunity in what it describes as a “holistic approach to health and wellbeing,” as the definition of health has flipped from the absence of disease to people taking a preventative approach to their health. The company has appointed Jostein Solhiem as CEO of the Health and Wellbeing division and tasked him with expanding its prospects there.
“My group is probably the most unique within Unilever in that it taps consumer trends that overlap all three major industries we play in – beauty, personal care and nutrition,” he explained. “We overlap by helping customers who want to feel good from within. We provide proactive solutions for immunity and mental, physical and emotional health.”
Through its Health and Wellbeing group, Unilever is leaning into broader cultural trends toward healthy lifestyles lived on a healthy planet, trends that are challenging other CPG companies that historically haven’t been associated with either. Unilever stands out as leader in the healthy-people and healthy-planet mission.
Notable among the company’s strategic shift toward health is its plan to spin off its Ice Cream division into a separate company by the end of 2025.
“Ice cream brings a lot of joy and happiness to people, but it isn’t necessarily best for your physical health,” Solheim quipped, having served eight years as CEO for Ben & Jerry’s.
Unilever’s Wellness Journey
Unilever began its wellness journey in 2019 with the acquisition of Olly, a disruptor in the vitamin, minerals and supplements (VMS) segment. The brand was co-founded in 2014 by serial entrepreneur Eric Ryan, who also launched the Method cleaning products line.
Olly took a non-traditional, benefits approach in product positioning with bright, inspiring packaging, perfectly suited to retailer shelves. Product names describe the health or wellness need the consumer is looking to address, rather than just a list of ingredients.
Olly health supplements
Olly was launched first at Target
“This was part of our more aggressive portfolio shift, what we call our Growth Action Plan (GAP) to enter new and attractive categories, like health and wellbeing” Solheim explained. The goal is to make Unilever “a simpler, better and more impactful organization.”
The success of Olly encouraged Unilever to acquire another of Ryan’s brands, Welly, a disruptor in the first aid bandage category that also debuted at Target. It provides colorful, kid-inspiring bandages designed to stand out – there’s a glow-in-the-dark bandage – rather than blend into the skin like other bandage brands. The packaging is also eye-catching, rather than bland and clinical.
Other hero products in the Health and Wellbeing group are Nutrafol, a dietary supplement to support hair growth, and Liquid I.V., an electrolyte-boosting VMS powder supplement added to water to provide faster hydration than plain water or leading sports drinks.
Both products have what Solheim describes as a “multiplier effect” that gives consumers an extra-health and wellness kick, like Nutrafol, which also helps grow stronger nails and supplies essential multi-vitamins for men and women in different life stages.
Besides the multiplier health effects for the consumer, Unilever gets a multiplier effect in the health and wellbeing business. Nutrafol is dermatologists’ most recommended hair growth supplement and it has a 80% repeat purchase rate at a premium $80 per month subscription rate. And the success of Nutrafol has also spawned a range of other hair wellness boosters, including scalp serums, shampoo and conditioners, and other nutraceutical formulas for stress, hormone support and toxin cleansing.
Liquid I.V. is suited to many different types of retail settings. It can sit in the sports aisle, in the VMS area, with digestive health in the over-the-counter pharmaceutical aisle and next to water displays. It is also popular in travel retail where dehydration is a common problem.
Also in the Health and Wellbeing group are:
- SmartyPants Vitamins, a range of gummy multivitamins for kids and adults that the company claims is the number one multivitamin brand on Amazon
Amazon - Onnit, best known for its Alpha Brain nootropics/brain supplement
- Equilibra, a natural nutrition, wellness and beauty brand out of Italy.
Roughly 60% of Health and Wellbeing sales are generated in brick-and-mortar retail and 40% direct-to-consumer, where Solheim sees lots of promise in the future.
And the range of retailers is broad, including mass-merchants, drug, grocery and specialty VMS retailers, plus beauty (Sephora and Ulta) and sporting goods (Dick’s). Amazon is also a trusted partner for its brands.
More To Come
Driven by the cultural shift to preserve health and wellness throughout a person’s lifetime starting at a younger age, Solheim is on a continuous quest to add other benefits-forward wellness brands to his portfolio.
“The Millennials were the first disruptor generation in the health and wellbeing space and GenZ are coming through at a whole new level of seriousness and openness to discuss and explore solutions that work for them, be it physical or mental,” Solheim said.
“We are always looking for disruptor brands that are focused on the health and wellbeing benefits space that are backed by strong and differentiated science with a unique business model,” he continued.
“We keep our companies focused and dedicated on their mission. We’ve been very successful accelerating the growth of the companies after acquisition, which is quite unusual, by unlocking scale benefits underneath given our size and reach,” he concluded.
