Welcome. Today, we will take a deeper look at the Udeliver U. S. Business. The presentation will last approximately 25 minutes and then we will open up for your questions.
My name is Fabian Garcia, I am the President of Unilever North America since January 2020. So before I start the presentation, I'd like to give you a flavor of my background and a quick summary of what I have done in my 1st 15 months on this job. Many of you probably know me, but for those To who don't, I've been in the consumer goods business for over 4 decades. I spent most of my career at Procter and Gamble and Colgate, and I worked also in Chanel and Revlon. I joined Unilever because of three reasons.
One is I always admire this company from the outside as a competitor for the clarity of the purpose of the company, the very strong and market leading brands it has and because of its globality, not only in geographic footprint, but also in mindset. Number 2 is, I wanted to make an impact at scale, and this is the right place to do that. And last, because I was attracted by the challenge to help the company accelerate growth in its largest market. So 15 months in, let me share a couple of observations. First of all, what I came here for has all proven to be true.
Unilever has every ingredient to grow faster. Yet, we are a large and complex enterprise, and we have a very ambitious and demanding agenda. So during my 1st 15 months, I have focused my organization on sharpening execution, enhancing our customer centricity, and I will tell you more about what that means, reducing complexity, improving prioritization and above all, reorienting my team towards competitive growth as the number one objective. So I will elaborate in the next few slides. We start, as always, to the safe harbor statement.
So I draw your attention to the fact that I will be making some forward looking statements and non GAAP. So that's the disclaimer for that. This is the agenda that we will follow. I will first refresh for some of you the facts and figures about our business. Then I will tell you what we have done and are doing now to sustain growth.
And finally, I will share with you our outlook for the market and for our business before I take your questions. So let's get the messages straight now. First, winning in the U. S. Is a strategic priority for Unilever.
You know well the history. 2020 was preceded by 5 years of modest growth. In late 2019, the company acted to resume growth and that growth accelerated during COVID. As you can read here, and I will tell you what we We expect to continue to grow based on sustaining the key recent pivots we put into the business. First, the reshaping of our portfolio, innovation on big purposeful brands, exploding e commerce and becoming digital first and a lean, diverse and highly engaged team.
And with our evolving portfolio, we believe we are well poised to capitalize on the expected growth post COVID. As I take you through the presentation and when we get to the end of it, I hope I would have impressed upon you that the U. S. Growth drivers are fully aligned with the strategic choices Alan and Graham laid out for you in their year end results presentation as well as more recently in the CAGNY presentation. So we start with the photographs of my team.
I have the privilege of leading a diverse team of domain specialists. They collectively have, on average, more than 15 years of experience in the U. S. And in global CPG business. That's an outstanding team.
So facts and figures for you. First, as you can see on the left hand side of the slide, we're big. We are nearly twice as big as our India business. On the right hand side, there is a description of the businesses we have in the U. S.
What we call here the operating Company of €8,500,000,000 is what I'm going to be focusing most of the conversation on today. On the right hand side, the so called global units, EUR 1,000,000,000 represent effectively a lot of the recent acquisitions that are U. S.-based, but some of them are run centrally. So for most of my remarks, we will be talking about the operating company. This is a picture of our category footprint, which is evolving.
I will comment later on the acquisitions and the progress we have made on those acquisitions. But I would like you to see that We have already about 15% of our business on categories that are not food and refreshments or beauty and personal care. Also note that in the F and R numbers, we are including the Unilever Food Solutions business. When you look at the right hand side, In 2020, consumers migrated channels favoring grocery, club, discounters and e com, while reducing the contribution of some of the other channels. Also for clarity, e comm here includes both omni as well as pure play business models.
The next slide is a reminder of our brands. As you know, we're very strong brands. Our top 10 brands account for 2 thirds of the turnover. On the right hand side at the top, you see our medium sized brands between €250,000,000 They are about another 23% of the business and I want to call your attention to the fact that you might find new names in that box, especially from our functional nutrition brands that are already getting large. We lead where we compete, and that's the next slide.
Not only do we have significant absolute share, but we have leading market positions in all our key Beauty and Personal Care and food and refreshments categories. Also for perspective, we have grown share in 5 of our top 10 brands in the last 12 weeks. We have momentum. So on the left hand side, a bit of clarity here on the statement I made in the beginning. The U.
S. Business started to turn before COVID. So you have a 2015 to 2019 modest growth Low bar there at 1%, then the beginning of 2020, January, February, we had started to grow and that accelerated obviously with COVID. And it sustained through the end of the year. On the right hand side, the blue bar represents our externally reported number.
That number contains the performance of foodservice and prestige units, which deflate the 12% growth rate of the U. S. Operating company. And the green bars are the comparison of our performance to the performance of our peer group North America businesses. So obviously, we compare favorably.
Last but not least is competitiveness. And I know this is a subject of conversation, so I want to be clear that this is clear for you. So we had a deep in competitiveness in the Q3 as we chose to conserve spend in the first half of 2020 related to the uncertainties of COVID. In the summer, we restored higher levels of brand support to improve our competitiveness and of course our business responded. So our Q4 and the first two reads of 2021, Our market shares indicate that over 50% of our business is winning share.
For transparency, This is different by category. So hair care remains a challenge, but progress is steadfast in deodorants and skin cleansing that we lead of course, especially since the new shelf sets have been installed in large customers. Our food shares are strongest in mayonnaise and premium ice cream despite in the latter category some supply constraints we've had since the peaks of demand from COVID. I also called your attention to the fact that we're experiencing competitive growth in pure play ecom retailers, you will see the numbers in a moment, and in our newer health and wellness businesses that are growing well ahead of the mark. And the last thing I want to impress upon you is the fact that the percent business winning in volume Has been north of 50% since the Q3 and close to 70% in the latest read.
We take that as an indication of things to come. So why are we growing in the U. S? I'm going to take you through our growth pillars in 2020, and we obviously are doubling down on this as we go forward. There are 4 pillars.
We are accelerating our portfolio reshape. We are innovating with our big purposeful brands. We're exploding e com and we're step changing our culture and our capabilities. So let me take you through some examples on each one of them. We start with reshaping and accelerating the reshape of our portfolio.
So you will remember this slide from the CAGNY presentation. The Topbox establishes our criteria for acquisitions. So of course, we're looking for scale, we're looking for high growth potential, global potential, leadership of the categories and of course categories where our Competencies in marketing and R and D will allow us to bring those competitors to these categories and accelerate our growth. The bottom box, as you remember, will illustrate the categories that we're interested in. So in the U.
S, I refresh your memory on the next slide, We have made 12 acquisitions in the past few years following that criteria. Last year, we stepped up their performance. I will share with you the numbers in the next slide. And if you look at the bottom of this chart, You will see once again that now 15% of our portfolio is already in these new categories that are accelerating. So when we look at all of those acquisitions grouped by the different categories that we Operate, Beauty and Personal Care, Prestige, Functional Nutrition, Food and Refreshments and Home Care.
You will see that in aggregate, all these acquisitions grew 17% in 2020. And despite the challenges we had in the Dollar Shave Club And the recent challenges in Prestige, that performance is quite encouraging. And if I only look at the Acquisitions that we made within the perimeter of the operating company, these acquisitions grew 28% in the year. So we're very happy with the pivot that we have made to make these acquisitions work for the business. The second area, growth pillar is bringing breakthrough innovation to market.
Now there are 3 elements here. The first one is bringing the breakthrough technology innovation that is global in nature to our business. We have locally based resources to deploy that technology to our brands. For example, if you look at the first Illustration on the right hand side here, those refillable deals come in a stainless steel reusable case designed to last for life. We use 54% less plastic in the refills than in a regular DIO stick pack and that amount of plastic is 98% recycled.
The early demand of this new pack were distributed is off to a great start. And Ben and Jerry's cookie dough snack, they are part of the strategy to expand Ben and Jerry into snacking. Obviously, I highly recommend that you try them. But the point is, the first thing that we do is we bring that technology breakthrough to our emblematic brands in the U. S.
Now we augment that innovation with co created innovation with our larger customers that goes against white space opportunities. That's been a key intervention in 2020, where we have more closely collaborated with our larger customers to co create that innovation. Critical to the success here is to leverage Our rich mutual data sources and put at the service of our customers our extensive analytics capability. This is critical because this is how we identify new insights of opportunities for them and for us to grow categories and their mutual business. As a way of an example, we have landed 2 custom design bath innovations at the 2 of the biggest mass retailers in the country.
You may also know that we expanded the PolarShape Club into retail last year. And the last piece of innovation is that, as you know very well, brand purpose drives consistent competitive growth when you add up innovation into it. So we firmly believe that brands with purpose grow. You have heard that before. And in the U.
S, we have enough evidence that such is the case. So these three examples are of our, of course, most iconic brands. The boxes in blue show you the growth these brands have experienced in the past 3 years, consistently ahead of the market. And that is a testament of how purpose activated well can drive superior performance in our business. The 3rd bucket here for growth pillars is exploding e commerce.
Now E commerce is a priority for many companies, but for us, it's a business that we have exploded. Indeed, I'm going to show you the numbers in the next slide. And we have started with the basics. The basics is collaborating closely with our largest customers. We're highlighting here Amazon, but they could also be in omni.
And this again is centered around data exchanges that lead to designing specific innovation that meets the specific requirements of this channel. These requirements are for value density, for profit per unit. And the way we think about it is that specific SKUs that were designed for this channel represented 10% of the turnover last year. We doubled that in 2020 and we are expected to continue to grow that in the near future. Now we are focused on optimizing return on marketing spending, developing relevant and real time content and continuing to improve our margins.
In this space, we need to stay ahead and we're stepping up our capabilities to do just that. So we have dedicated resources for testing and analytics. We have more in house search and display specialists that day to day optimize our media spend, And we have integrated search and display teams that capture learnings and drive best practices across retailers, categories and business models. It's working. So first, on the left hand side here, E commerce now represents 14% of our U.
S. Sales, with the operating company business as you see the darker blue here, doubling in 2020 to almost 10%. 2nd, growth in this channel is competitive across models and retailers. Specifically, at the largest grocer and the largest mass retailer, 80% of our click and collect business has a higher market share than our corresponding brick and mortar business. We have work to do on with the 2nd largest retailer, but we're on it.
And in the largest pure play retailer, 70% of our business is gaining value share. And last but not least, we are growing our profit margins by being smarter with mix, portfolio and our marketing investments. The last pillar here is not the least for sure. So we are creating a lean, digitally enabled, diverse and engaged organization. So we're fast in a journey to become end to end digital, leveraging our analytics capability and resources.
Now that's those are big words, so perhaps I need to break that down for you with a couple of examples. First example I will use is how we use data and analytics to identify consumer relevant advertising. You have heard Graham and Alan talk about our people data centers. These are the social listening centers that we have around the world. Here in the U.
S, the people data center identified The strong sentiment around supporting frontline workers during the pandemic as well as They identified a huge rise in volume at those centers of people asking us if we could help the frontline workers early in the pandemic. So we leverage that data to activate the Dove front line Courage is Beautiful campaign that many of you have already seen and also to take supportive actions with frontline workers with the United for America program that we put in place at the time. This was really successful and we were quite proud of the speed with which we acted with these insights. Another example is Ice Cream Now. You have also heard that term used before.
So we have a business unit called Ice Cream Now. You may want to use it after this meeting. That unit is allow is allows consumers to order ice cream via popular apps like Uber Eats or Grubhub. In our analytics, we identified specific times of day by brand that have the highest potential for conversion, given the rapid shift to online delivery during COVID and at home ice cream eating habits. So we were able to tailor our digital advertising to optimize to this delivery and even layer weather data to enhance sales and get the right message at the right time to trigger orders.
And the last example I will give you is how we're leveraging artificial intelligence to provide superior consumer engagement. So we're using artificial intelligence to automate some of the routine online chat functions with consumers. This improves responsiveness and allows us to better direct feedback and more importantly frees up the time of our consumer engagement associates to focus on the most critical and valuable interactions with those people who are calling us. So those three examples give you a better sense for what we are doing digitizing our company end to end. We have worked hard to change the mindset here from explaining to delivering and ensuring that everyone is focused on growth.
We're leveraging obviously our diversity critical for us as we are representing a very diverse group of consumers in the U. S. And last but not least here is that the focus we have on generating fuel for growth from the P and L and using technology to optimize our spending. So I hope you recognize this chart. This chart is to illustrate that through our description of the growth pillars, we're really close to the 5 strategic choice that Alan walked you through at CAGNY earlier this year.
So let's move to the last part of the presentation. Let's talk about the outlook. I'm going to build this slide to illustrate how we see the post COVID trends and their impact on our business. For clarity, these are no predictions in any way and the environment continues to evolve as we navigate the pandemic here in the U. S.
So on the left hand side here, they are at the top global trends in developed markets and at the bottom very specific U. S. Trends. I want to describe them for you in a moment. And across the chart, you have Across the columns, you have our main product categories from hair, Dios all the way to Prestige and Food Solutions.
So let me explain the trends on the left. Holistic health. So we expect consumers post COVID to have more holistic health needs with increased sensitivity to mental, social and sleep health, and they are more proactive in their attitudes towards prevention. Pleasure starved, self evident, For many, 2020 was, of course, a year of limited enjoyment, joy and fun, so we expect consumers to become more impulsive and indulgent in 2021. And home experiences is what we are expecting now that more consumers will seek to create out of home experiences at home.
Many of us have rediscovered the pressures of family dinners and we believe some of that is going to stick after COVID. Then you have the specific U. S. Trends. The stimulus bump about to hit with the extra $1400 going into consumers' pockets.
Mass vaccination, this is the reflection that by late summer, we expect a large majority of the U. S. Adult population to have had the chance to have been vaccinated. And I choose my words carefully because there will be availability of vaccines for the majority of us. There will be, of course, a desire to return to normal and whatever normal that is.
And last but not least is the notion of hybrid work. We expect several managerial jobs to no longer require 5 days in the office, So there will be again work from home and work at the office, a different routine than before. I'm going to show you color codes. So greens will mean where we expect to benefit, Red will mean where we expect a headwind and gray means where we see limited impact on the category. So of course, You will see in the next click how we see this.
And I'm not going to take you through specifics, but suffice it to say Now the simple message I want to convey to you is that we believe a return to normalcy will have a net positive effect on our U. S. Business and our portfolio is evolving to benefit from these trends. So what's the outlook? We are obviously Looking to grow with the consumer, the consumer we have great confidence in the U.
S. Consumer and how she will spearhead the recovery, but of course, there will be challenges and opportunities. The challenges have a lot to do with The economy we're dealing with, so it's 2 speeds, 1 at the top that is growing really fast and one that depends more on how fast we get to better employment numbers. The migration to e comm will accelerate and we will have to deal with that and there is inflation in the horizon. And of course, we're lapping historical performance.
So in this environment for us, it is absolutely critical to stay focused on competitive growth, Com Hem or Highwater. So in summary, I hope the presentation has helped impress upon you 2 things. 1 is that Unilever in the U. S. Is big.
The U. S. Is big for Unilever and winning here is a strategic priority for the company and that we expect to continue to grow competitively as we accelerate the pivots that we put in place last year. So that's the end of the presentation. And I would like now to thank you for your attention and ask Richard to help us with the Q and A.
Okay. Thank you very much, Fabienne. Thank you. So just as a reminder, to submit a question, please complete all the fields on the web page, including your name and then click post question. I'll then be going through the questions and reading them out for Fabienne to answer.
So we've had a few in. And We have two questions from Guillaume Delma at UBS, and I'll take them 1 by 1, Fabienne, so you'll have to remember them. The first one is, to what extent was last year's strong underlying sales growth of 8% primarily reflective of the at home trend? And thus, do you expect some marked sequential deceleration this year?
Okay. Thank you, Guillaume. I think in the food and refreshments business, we benefited with the at home trend. As I was indicating on The last slide for the outlook, we expect some of these habits to stick. And I'm not the only one saying this.
CEOs of large food companies in America have said exactly the same thing in public forums like this. So the expectation is that they will be a, I'm going to call it a running rate of consumption at home that will be much higher than pre COVID, Yet, the other source of recovery and growth for us is the return of the foodservice business as well. What's the second question?
And the second also category question is for the home care category, Do you believe you have critical mass in the U. S? In other words, could a lack of size in the home care category represent a challenging hurdle To overcome your ambition to accelerate your growth.
Interesting. We As everybody knows here, we invested our home care business here many years ago and came back with 7th generation. And 7th generation is by far they're leading in the green space. So from a point of view of scale, our aspiration is not to become the number one brand or category or leading brand in the home care category given the competitive landscape in America. But what for sure we want to be is the leading brand in the green space and that's what the aspiration is with 7th generation.
And as everybody knows, that sub segment in the category is growing very fast. We were very successful last year with 7th generation and our expectation is that, that will continue.
Okay. Thanks, Sabine. Thanks, Guillaume. The next question comes from Antonio Zanella at T. Rowe Price.
Do you have enough resources to invest in growth? Or would you like to have more to push the innovation and advertising and promotions pedal?
It's a bit of a loaded question. Antonio, do you always want more spending? But I think from a competitive point of view, what we want to make Sure of is that our brands are growing ahead of the market. We believe that we are very smart with the way we spend money in this market. They can't we have to optimize spending is second to none.
So my sense is we have enough resources. And the last thing I would say As I remarked actually in the presentation, is that our organization is laser focused in finding more money in that P and L to reinvest in the business. So as you know, this is an Uber competitive market, this market is home to some of the largest multinationals in the world. But as you also saw, we are the market leading company in the larger categories where we compete and we have the number one brand for most of those categories. So I am happy with the resources that we have and with the effort that we're putting in to ensure we have competitive spending in our P and L.
Okay. Thank you. The next question comes from Martin Deboo at Jefferies. She has 2, but I'll do them 1 by 1. First is, how do I reconcile the fact that competitiveness Close to doubled between Q3 and Q4, yet growth in North America slowed by 200 basis points in Q4.
Well, first of all, thank you for the question, Martin. And I would say 2 things. The first topic is the brutality of our measurements. So our measurements are, if you are at 0, you don't count as growing in the delta basis points period to period or last 12 weeks, last 52 weeks. 2nd, if you are minus 5, minus 10 basis points, that's a no.
So We were really, really close in some of our categories for the first half of the year. But the most important thing here is to think about The growth that we were experiencing quarter to quarter in different categories, because the mix was really different in the beginning of the year, last here and in 2019. So it is a conversation about mix and the way I would like to If we could share with you the details, the way I would like to answer the question is category by category, what was happening with shares and what was happening with USGs.
Okay. And the second question is an e commerce question. Within e commerce, what is the approximate split of omnichannel versus pure play? And how material is direct to consumer?
The larger part of the business is omni, but Both are growing very fast. E commerce pure play is triple digit, but it's not so far ahead of Omni. Direct to consumer is a smaller part. I'm not going to count Amazon as direct to consumer. I will define direct to consumer as to what we sell off of our websites and what we sell through the Dollar Shave Club.
That's the smaller part of our mix.
Okay. Thanks, Fabian. Thank you, Martin. I have two questions here from Warren Ackerman, and I'll take them 1 by 1 again. He says, thank you for the presentation.
What growth do you expect from the U. S. In 2021 when lapping tough comparators And then sustainable growth in the U. S. In 2022 and beyond, so a question about the future.
Yes. So thank you for trying. Again, that will give you a number. I'm not going to give you a number. What I will tell you is that we will grow competitively and we will follow the 4th, the 4 gs growth model that I so well captures our framework in Unilever.
So Competitive growth is the way forward. And in 2022, is this exactly the same message, is competitive growth. I said at the beginning that we're really focused in changing the mindset. There is no reason to worry about the base period because you have to grow year to year. So competitive growth, it is worrying.
Okay. And the second question is a Dollar Shave question. What is the strategy from Dollar Shave Club given the management change?
Our strategy for the Dollar Shave Club is to grow the business. The management change came to play because the founder gave us enough time, literally a year of his intentions to move on with his life. And we Literally, we're super happy to have found Jason, who's an expert in the space. The early going has been terrific. As you know, we expanded into Omni with the Dollar Shave Club and public domain information on market shares is very encouraging in the 1st 6 weeks of expansion in retail where we measure the shares.
So the direct to consumer business is improving profitability. So We're really happy with where we're going, but obviously, the strategy is to grow it.
Thanks, Fabienne. So the next question is from Javier Escalante at Evercore ISI. Very clear strategy to restore the competitiveness of the U. S. Business.
To what extent does the focus on new but smaller brands is an issue holding growth back when you join Unilever? If so, your thoughts on legacy brands such as Suave, which has lost share for years? Should assets like these be divested?
Hello, Javier. Thank you so much for your question. I know Javier from a prior life and we are a fellow Venezuelan, it's always a pleasure to hear from him. And as always, he asks very tough questions. First of all, I think one of This is a question about size of brand and impediments to growth.
One of my first realizations here is that we need to be proud of the brands that we own. Swab and Tressema are market leading brands and they need to grow. And the question for us is not to think about divestment, but rather to think about how do we assert their leadership. And that has been what's going on here. We need to assert their leadership and that is happening.
There's a literally as we speak, a relaunch of the Suave brand. On TRESemme, the issue is specifically about styling and was exacerbated by COVID. Of course, people are not going to work or participating in social activities. So TRESemme has suffered because it was the by and large market leading brand in styling. Obviously, that is coming back.
And when it comes to the new brands, that's the future, but it's not a future that replaces the present, it's a future that builds over the present. So the smaller so called smaller brands, you saw some of them represented in the acquisition section that I talked about, are growing over 50%. I'm talking about Shea Moisture. I'm talking about Smarty Pants. I'm talking about Ollie.
Those brands are booming. So my view of the future is that all these brands are going to contribute to growth And the large brands here are the foundation of our leadership.
Thanks. So the next question comes from John Kirby at Surveyor Capital. How do you define a successful outcome in the U. S? Is it business winning share value greater than 60%?
And how do you think about the timeline to achieve that success?
That Objective is annual. So we are actually paid on reaching that objective, 60% of our business winning share. I think success here is about sustained growth in the 3% to 5% level or higher than the market. So That's what we're trying to achieve here over the next 5 years.
Thank you. And the next one comes from Rahul Desai at IKEA. Based on your experience at other large FMCGs, How would you compare Unilever's culture to the other large FMCGs? What have been the biggest surprises, positives and negatives for you at Unilever? And what about Unilever's culture do you think contributed to Unilever being left behind on e commerce, digital And ability to innovate and build disruptive brands.
That's a bit of leading the witness. So What's the biggest cultural difference between the Unilever and the companies that I have worked in? I find it On the positive side, that Unilever is a pioneering company when it comes to showing the world that you can do well and you can do good. I think this company established a new benchmark here that is not enough just to be profitable. It's You have to be profitable and be positive to the planet.
And that for me is a motivating force for the company to perform. And that drives the culture, because we the way we do business is elevated. It's not just about profit making, number 1. Number 2, And I said it in the beginning, we have a very ambitious growth agenda and a very ambitious agenda overall. We're very we're complex and we are large.
So one of the big differences between what I have observed in other companies is that we need to attend to a multiplicity of tasks. And the way I have responded to that challenge simply is about prioritization and focus. That's a simple cultural change that you first do the things that matter the most and then you move on to the next ones. So I completely reject the allegation that will be left behind. For me, there's 2 ways to think about that.
I think you the potential this company has to Stay ahead and be are supposed to be left behind is one of the reasons why I'm speaking to you today and one of the reasons why we have what I believe is great potential to deliver on the commitments that Alan has made publicly to you in terms of growth and in terms of margin. So I completely reject that notion.
Thanks, Fabienne. So we've got a question now from Alan Erskine at Credit Suisse. I believe that P and G's native natural deodorant brand Has overtaken Unilever's Schmitz brand. Can you give some color around this fast growing on trend category And the plans you have in place to improve competitiveness?
Yes. We are by and large the market leader in the DEO business globally, as you know. And the natural segment in the U. S. Is starting to gain traction.
And the brands that are mentioned here are Growing in that segment, one growing faster than the other. The leading Brand in the space of naturals is dove by a substantive margin to native. So the way we believe this is going to impact growth is expect more activity in this space from the market leader Unilever across all the brands that we have. And the other thing that I would ask that It's taken into consideration beyond just the natural space is that in Dios, we have a brand that has just been relaunched that has been a brand that was declining for a while, which is AXE. And AXE is one of the pillars of our leadership, ax degree and of course, though.
So I would focus on the natural space to be watched, but I would also remind everyone that in the rest the category we lead.
And I now have a short question from Kim Bretz at State Farm. Thank you for the presentation. How should we think about the future pace of portfolio shaping for the U. S. Business?
Well, I hope the presentation illustrated the spaces that we want to play in and the spaces that where we have invested capital to reshape the portfolio. I hope you also take into consideration that we have announced, of course, the separation of tea and the tail brands in BPC. So think of growth in terms of We want to grow our business in the categories where we lead today. So pretty much along the lines of hair, deals, skin cleansing, condiments and ice cream. On top of that, we want to lead in the health and wellness space, functional nutrition and last but not least in Prestige Beauty.
Thank you. So Next question comes from Ruhi Siddiqui at Close Brothers. Why is your value share progression running behind the strong volume share gains that you have seen?
That's usually the sequence. Volume share is an indication of things to come in value. We also have a lesser premium portfolio. This is no secret, everybody knows that. We tend to lead in the value segments of the categories.
So the reflection of the market share is simply a mix equation.
Actually, a follow-up question there, which I think you partly answered, but it says, do you feel the U. S. Business was well invested prior to you taking on the role?
Although this is in the eyes of the beholder, I think this business It's now receiving enough attention and prioritization from the company. The resources that we have had speak to the investments that were made here. When I arrived here, the infrastructure was in place. The analytical resources, the analytics resources that we have, the automation resources that we have, the digitization transformation that had started. All of that was put in place before I came here.
So investment is not just about brand marketing, It's about capital deployment and investment in other areas of the P and L. So my sense and I am a beneficiary of those investments.
Thanks. So the next question comes from James Targett at Berenberg. Two questions, I'll just fit them. First one is about functional nutrition. Aside from Daiichi supplements, what other products fall into this category that Unilever would like To be present
in. Vitamins, minerals and supplements, be specific is where we have spent most of the capital here. We have a big business in the hydration space. So Not to tip my hand beyond that, I'll stop. But those are the 2 spaces where we have been most active in the U.
S.
And another question associated is what does return to normalcy mean For the future, the Unilever Food Solutions business?
Well, The obvious, of course, is that the top line will return as more establishments in the foodservice business open. And the second conversation is about how do we capture the organizational changes that we are making to integrate that business with our food business, our retail food business. So those are the two changes that will be reflected in the return to normal.
Okay. Thank you. Slightly technical question from Chris Pitcher at Redburn. You disclosed that the U. S.
OpCo business is higher margin than the group. Is Unilever USA still higher margin when the global units are included?
I will not answer. I don't think we have disclosure more than we have already.
That's clear. So Next question is from Celine Panuti at JPMorgan. The new M and A you did in 2020 grew strongly by 28%. Can you flesh out what are the sustainable growth of these businesses? And then specifically, what are your plans for Smarty Pants and Ollie?
First of all, a clarification. We didn't buy these businesses all in 2020. They've been bought over the past 5 to 7 years. What is the the growth drivers here are effectively macro trends. I was speaking about the most proactive attitude Consumers have, especially millennials, to take care of prevention when it comes to health to their own health.
And that is one of the driving forces for our presence in the space. This space is more fragmented and this space is more, I want to call it, sensitive to technology changes. So consumers are buying direct to consumer, they're buying on e commerce and of course, they're buying in the brick and mortar retail. But The secular trends are favorable. They are tailwind categories and that is, I would say most of the reason why we expect this trend to sustain.
The brands that we have acquired have net promoter scores through the roof. They have high repeat and they are very well placed when you think about their audiences. So you have millennial, millennial families and in general, people who have a younger profile and fit that attitude of being more proactive with their management of their health. What are the specific plans for SmartyPants and Ollie? I obviously will not be in a position to reveal those in a public forum, but expect them to be expanded.
Okay. And the second question from Celine. Can you explain what drove the huge growth in home care of greater than 50% in 2020?
Well, I think it's Partially COVID, but more importantly, the strength of 7th generation, which has been growing double digit for the past 3 to 5 years. And speaks to the clarity of its position, the clarity of its mission and objectives and the consistency of its performance. So the other thing that I would say is this is a brand that fits really, really well for bringing Unilever technology into it. You have seen our statements about clean futures in home care and that's what 7th generation is all about. So I am really confident in the future of that brand.
Thanks. The next question comes from Carol Zuerta at Kepler Cheuvreux. The U. S. GDP growth outlook looks strong.
And in 2021, there is strong support for low and mid income families. However, long term income inequality is rising and Unilever is mostly a mass market player in the U. S. Shouldn't you be making a stronger push for premium and luxury brands, for example, in Beauty and Personal Care?
We are. I mean, this is a non secret conversation. We are in the process of premiumizing our brand offerings. We're in the process of buying brands that serve consumers at different price points and at more higher price points. Premium Beauty is all about that.
So I think it is unequivocal what the intent of this company is. But let's not forget that although The U. S. Is a developed market, more than 40% of the population is cash trapped. So this is when I go back to Javier's question is, We have the market leading brands that will sustain our growth because that foundation is catering to a large percent of the American population.
And the next question comes from Alicia Forett, Investec. Given your outlook on the trend for more working from home, do you think the outlook for Foodservice and Prestige Beauty growth rates will be lower than they have been going forward? What is your plan for these businesses as we move out of the crisis?
Obviously, those two businesses are going to grow, perhaps one more plausibly than the other, because we were talking about pent up demand, we were talking about indulgence, we were talking about The craving that consumers have to socialize again, that speaks wonders for the prestige business. And obviously, those of you who are In lockdown, we'll appreciate greatly the fact that as soon as restaurant and food service establishments come back, we would all flock to them. So Frankly, that to me is almost like a self evident forecast is that those two businesses are going to do very well.
Yes. Yes. And I've got a couple of questions here from John Ennis, but I think you've answered them except for Why do you think volume share will be a leading indicator for value share?
You're selling a lot more units. And The way we think about it is that when you have the volume and value equation right, you start first by building share in your units and then reflecting that in your value. Of course, there is more than one variable to that and the mix of that volume share gives us when you analyze it in 2 or 3 degrees of specificity. You end up understanding what is a predictor for your value share going forward. It's different by category, It's different by brand, but it is an indication for us that things might improve.
And here we've got a question on brand purpose from Ivo Caroga at Bank of America. Which of your brands do you think are strongest and which are weakest when it comes to conveying their purpose, big or small?
I talked about our most emblematic brands, our most iconic brands in the presentation, of course Dove, of course Ben and Jerry's and of course 7th generation. But many of our other brands also have purpose and are starting to drive it. One of those brands is Vaseline, another brand that has absolute purpose at the core of the societal issues in the U. S. Is Shea Moisture.
So it is an endeavor of each and every one of our brand people to identify a purpose that is consistent with a societal issue that matters and consistent with our own history, because not everyone can speak with authority about these issues. And it would look, in fact, disingenuous if they did and had never talked about it before. But in our brands, there is a history of purposeful intent. So some of the smaller brands might never have a meaningful purpose and some of the smaller brands, as Alan said in Cangney, might not see themselves in our portfolio in the long run. But all of our big brands are either have a very clear purpose that they are talking about and activating now or they're working on articulating what that is and ensuring that they activate it going forward.
So this is one of the reasons I work here is that we have meaning in what we do.
Thanks, Fabienne. We're coming towards the end, but see if you can fit through more in. Another question from Chris Pitcher at Redburn. There was a very dramatic acceleration in market share. How much of this came through price competitiveness This is innovation.
It's hard to tell, but I would say it's a combination. I would say mostly Driven by innovation, some of our innovation is pricing up, back to the question that was asked before. So I would answer by saying that it is a combination of both, driven mainly by innovation.
And the second part of the question, which I can only suggest is a fishing question, Fabienne. Can I Clarify, are you saying you expect Unilever USA to grow in 2021 versus the elevated 2020 base?
I think I said we are going to grow competitively.
I think you did. Let's just take one last question about innovation from Alan Erskine at Credit Suisse. Can you share with us 3 innovations that you have already announced to the trade and that you think will move the needle in the U. S?
I think you saw them today in the presentation. First of all, you saw the presentation in for So Dios and the Packs for Life innovation, I think you saw the innovation in Bath that I talked about, and I think you saw the innovation in unit dose for 7th generation, which continues to do very well in the market. There is brand new innovation in deals for performance across our brands. In degree and Dove, there is innovation with vegan and plant based Food, both in condiments as well as in ice cream. Frankly, we cannot produce fast enough of those innovations, And I can go on and on, but there were there was one last thing I would mention to you is that our innovation led to a record distribution pickup this year in the new modulars in the trade.
That innovation, of course, was presented as the A320 is landing right now. So I feel really bullish about the innovation that we have and I feel really bullish about the impact that it's going to have in the marketplace.
Okay. Thank you. And I think we should End there. We're nearly out of time. Thank you, everybody, for all your questions.
A broad range of questions, very much appreciated. If there are any other questions you have, then just e mail the IR team and we will get back to you. Fabian, thank you very, very much for the presentation And for the allowing me to pump you with questions for a good 30 minutes. Really appreciate it. Everybody, enjoy the rest of the day.
Stay safe and stay well. Thank you very much.
Thank you very much.