Breaking News
Investing Pro 0
New Year’s SALE: Up to 40% OFF InvestingPro+ CLAIM OFFER

Unilever switches some ingredients to adapt to commodities shortages

Stock Markets Jun 16, 2022 01:41AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Degree, a brand of Unilever, is seen on display in a store in Manhattan, New York City, U.S., March 24, 2022. REUTERS/Andrew Kelly 2/2
 
CL
-0.36%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
UL
+0.82%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Richa Naidu

LONDON (Reuters) - As commodities - from crude oil to sunflower oil - remain in short supply, Britain's Unilever (NYSE:UL) has changed the ingredient makeup for some of its products like deodorants and packaged food to cut costs and mitigate supply constraints.

The ability to switch ingredients and materials, something consumer goods manufacturers traditionally find difficult, became even more valuable after Russia's invasion of Ukraine led to commodity prices hitting multi-year highs.

In April, Unilever boss Alan Jope said the company had begun altering some of its recipes so it could use rapeseeed oil instead of sunflower oil, which had become scarce since the invasion. Ukraine typically produces about half the world's exports of sunflower oil.

According to Unilever's head of research and development, Richard Slater, the maker of Dove soap and Knorr stock cubes is not stopping there.

"Globally, there was a shortage of silicon so we were looking at our deodorant and making sure that we looked at the formulations there...to use less ingredients that are under pressure," Slater said in an interview.

Unilever, which makes Rexona, Dove, Axe and Lynx deodorants, dealt with this issue last year, he said.

In its home and beauty care businesses, the company has also been trying to reduce its products' reliance on petrochemicals and make them more sustainable.

"That has a double benefit if you can get a better product that is more sustainable, but also reduce the pressure on some of those ingredients under cost pressure," Slater said.

Many packaged goods makers have tried to wean themselves off palm oil, which has been blamed for deforestation and labor abuses, but is used in everything from P&G's Tide pods to Ferrero's Nutella.

On Thursday, Unilever said it had tied up with San Diego-based Genomatica to build and commercialize alternatives to palm oil and fossil fuel-derived cleansing ingredients.

"We're not talking about a few thousand tonnes here, we are talking meaningful commercial scale," Slater said, declining to provide details about how much of the new ingredient it plans to produce in the near term.

Sourcing alternatives to palm is also "really important from a supply resilience point of view" due to the pricing around the commodity, Slater added.

Unilever no longer relies solely on manual testing when it changes its formulas. Instead, it digitally models how new ingredients would affect products, Slater said.

For instance, he added, as it alters recipes for shampoos, the company uses robots to try dozens of differently modeled potential products on hair in a matter of hours.

Unilever switches some ingredients to adapt to commodities shortages
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email