We'll now hand over to Richard Williams. Please begin.
Good morning, and welcome to Unilever's 3rd quarter trading update. As at H1, we are presenting our results to you from our respective homes. So please bear with us if things are not as smooth as we'd hope. I know it's a busy results day for many of you, so we'll aim to keep the prepared remarks around 30 minutes and have Q and A at the end. Alan will give an overview of the business and performance before passing to Graeme to cover our divisions and regions in more detail.
Alan will then wrap up with some concluding remarks. All of today's webcast is available live, transcribed on the screen as part of our accessibility program. First, I draw your attention to the disclaimer to forward looking statements and non GAAP measures. And with that, let me hand over to Alan.
Well, thanks, Richard, and good morning, everyone. Overall growth in the quarter, as you all have read, was 4.4%, 3.9% from volume and 0.5% from price and we consider this to be a strong performance. Our portfolio's resilience, our ability to respond with speed and agility to rapidly changing consumer behavior and country and channel dynamics has served us well. The emerging markets grew 5.3% as China recovered and India and Brazil both returned to growth. Our developed markets grew by 3.1% and that was led by ongoing strength in North America.
Now Graeme will explain more about the individual country and regional performances. That will give you more insight and it's more reflective of how we run the business than these developed and emerging market aggregates. Year to date, our underlying sales growth is now 1.4%. This headline growth figure obviously masks huge volatility across our categories, channels and geographies. And as we look to the coming quarters, we think that the operating environment will remain unpredictable.
And in truth, I continue to be perplexed by talk of a quick recovery. Public health stats in most countries are getting worse, not better. The start of October saw the highest number of new cases reported in a single week, over 2,000,000, with notable increases in Africa and Europe and with Argentina and other parts of South and Central America still experiencing very high numbers of cases. Those of you in the U. K.
And parts of Europe will currently be witnessing the reintroduction of lockdowns. So we hope for the best, but we're certainly not relying on it. The resilience of our portfolio, the agility of our business and the speed with which we take action will continue to be key. Our focus remains volume led competitive growth and delivering absolute underlying profit and free cash flow. We've seen and responded to these continuing changing dynamics across categories, channels and geographies.
The shift to online continues to accelerate and e commerce represents 9% of our business in the year to date, 10% in the quarter and that's up from 6% in 2,009. E commerce sales grew 76% in quarter 3 and that includes the headwind from foodservice, e commerce. I won't go through all the shifts we're seeing as they're very much in line with what we shared at the half year. However, I do want to say as a context for everything else that we talk about that we remain very, very focused on driving operational excellence through the 5 growth fundamentals that you see here in which we set out at the start of the year. Over 50% of our business is winning value market share, but this is not yet where we wanted to be.
Our goal is 60% of our business winning share. And as we explained with our first half results, we're ruthlessly focused on these 5 drivers of competitive growth and that includes stepping up BMI investment where required. At the same time, we have continued to drive our strategic change agenda, taking action to strengthen Unilever's business for the longer term. In this quarter, our proposal to simplify our dual headed legal structure have received very strong support from both NB and PLC shareholders with over 99% of both sets of shareholders voting in fear of unification. The Groningen's private members' bill, which I'm sure you have all heard about, was finally tabled in the Dutch Parliament, a bill which if it were enacted would seek to impose an exit tax on companies leaving the Netherlands under certain circumstances.
The table bill contains a number of amendments to the previous proposals, which we've been reviewing carefully. Despite the amendments that have been made, we have received legal advice that if the bill were enacted in its current form with retroactive effect and applied to unification, it should infringe EU laws, the Dutch UK tax treaty and other tax treaties with states in which Unilever shareholders reside. It's not clear when or if indeed at all the bill will be enacted nor in what form. As we have previously stated, the Board's intent to proceed with their proposals provided that unification in the Board's view remains in the best interest of Unilever, its shareholders and other stakeholders as a whole. And the Board will continue to update shareholders as appropriate.
Sustainability is not surprisingly being embedded into every part of the business and you can see it reflected much more directly in our divisional category and brand agendas. In September, we launched our Clean Future strategy in home care, which aims to eliminate fossil fuel derived carbon from our cleaning products by 2,030, replacing that carbon with renewable or recycled sources. We intend not only to transform our own business, but in this case to help shift the whole industry. And this commitment came just on top of our ambitious proposals to help fight climate and nature change and protect and regenerate nature, which we announced in June. And of course as part of reshaping our portfolio, we continue to work to implement the separation of our tea business, a process that's expected to conclude by the end of 2021.
And with that, let me hand over to Graeme to cover our performance in more detail. Graeme?
Thanks, Alan, and good morning, everyone. On this chart, we've again broken down our portfolio performance to show how the pandemic has impacted consumer behaviors and the channel dynamics across our markets. The category groupings on this slide are the same as we first presented at our half year results and are a pretty good way of understanding our performance. The Q3 growth rates demonstrate the huge variations in demand that have continued during this quarter, albeit at less extreme levels than those that we experienced during Q2. Consumer demand remained elevated for hand and home hygiene products to combat the spread of COVID-nineteen, and we were able to drive strong growth of 19% in our hygiene portfolio, which comprises our skin cleansing and home cleaning businesses.
Our in home food and refreshment business grew by 12% as we tapped into the opportunity presented by the continued shift to eating at home. Conversely, lockdowns and related channel closures continue to negatively impact our food service and out of home ice cream businesses, but at lower levels compared to the 2nd quarter. Together these businesses declined by 16% in the quarter. Within Beauty and Personal Care, skin cleansing grew by 20% as demand for hand hygiene products such as liquid hand wash and hand sanitizers remained high. We've responded by launching hand sanitizers in 65 new markets since March.
And while we believe that heightened hygiene concerns will continue, we shouldn't expect a repeat of the exponential growth in hand sanitizers that we saw in the 2nd quarter. Lifebuoy, which is a brand now in 55 countries, is growing share in 93% of its markets and as of September became our latest €1,000,000,000 brand in Unilever. LifePoint delivered growth of 67% in the year to date and has a compound annual growth rate of around 13% across the last decade. At the end of this quarter, we launched the first ever hand sanitizer from Dove. This product is clinically proven to moisturize skin for up to 8 hours while being 99.99 percent effective against both virus and bacteria.
Now this is an innovation that took 6 months from concept to launch and solved a really big technical challenge of how to keep the alcohol and moisturizing care ingredients separated within the formula. Our patented microemulsion technology means that we're able to offer hygiene reassurance through a high alcohol content whilst at the same time providing moisturization to mitigate damage to the skin and improve skin condition. Our prestige portfolio grew by 8% as we refilled the health and beauty channel, although footfall does remain somewhat subdued. The business has been pivoting to e commerce, which continues to grow, but not enough overall to offset the impact of retail door closures. The rest of BPC continues to see lower consumer usage due to restricted living conditions and consequently fewer personal care occasions.
Sales declined by 2% which is an improvement compared to the Q2 as many countries eased their lockdowns. Hair grew overall as a decline in the hairstyling segment was offset by growth in our wash and care products. Our in home food and refreshment portfolio grew by 12% as in home team occasions continued at elevated levels and we tapped into this trend through our Knorr at home toolkits and Hellman's stay inspired and staycation messaging to drive incremental penetration and sales. We have been actively shaping our portfolio, our innovation and our brands behind these growth opportunities, shifting the portfolio to tailwinds and boldly healthier choices to encourage diets with a more diverse range of vegetables. Examples of this are plant based and meat replacements under the vegetarian Butcher brand which we've now launched in over 20 markets and Hellman's Vegan Mayonnaise, which is now available in 30 markets.
We continue to modernize our scratch cooking ranges and renovate the Knorr portfolio through healthier recipes and a new visual identity with the Knorr Promise, which means sustainable sourcing, 100 percent natural and 100% recyclable. This is a great example of closing the brand do versus brand say gap. Sales of ice cream grew by 3% in aggregate. That was driven by both volume and price. We've pivoted our portfolio to ensure that our out of home products are also available in in home relevant formats such as multi packs.
In home ice cream grew by 16% led by Ben and Jerry's and Magnum which has more than offset the 13% decline in out of home ice cream sales. The foodservice channel remained either fully or partially closed in many of our markets and foodservice sales declined by 21%. The sequentially improving trend has plateaued. Although China Foodservice returned to growth in August following the lifting of restrictions on restaurants, the outlet open rate is not expected to recover to pre COVID levels given that some outlets have gone out of business. In Europe, whilst restaurants began to reopen during the quarter and sales benefited from consumers holidaying at home, the outlook has turned more negative since then as many countries are closing restaurants again due to escalating infection rates.
Turning to Home Care, our Home and Hygiene brands delivered underlying sales growth of 18% as consumer demand for household cleaners to combat the spread of COVID-nineteen continued with germ killing and antibacterial benefits particularly sought after by consumers. Domestos continues to grow double digits and we have now launched the brand in China as well as extending the brand to bleach braced spray and wipe formats. Laundry sales grew by 4%. Fabric Solutions grew low single digits although price declined as we passed through reduced commodity costs particularly in our European and Southeast Asian markets. Fabric sensations grew low single digits as we launched new comfort fragrance boosters in China.
These are jewel color beads with luxury inspired fragrances. In our biggest laundry market, which is Brazil, OMO concentrate has been a growth driver and is a great example of our home care clean future strategy in action. This is a 6 times concentrated laundry liquid that can be easily diluted at home. Consumers are reassured with the value proposition as the pack is 20% to 30% cheaper than a standard 3 liter pack and the 6 times concentrated formula is being rolled out across our brands in Latin America as part of recession proofing our portfolio. This is an example of how we crack the code of delivering superior performance alongside sustainability and consumer value.
Now before I cover our geographies, I would like to say a few words about how COVID-nineteen continues to influence the operating environment for our business. We've moved out of response mode and into a mode of living with COVID. In many markets, there is now a disconnect between the progress of the pandemic and the level of economic activity, given different government responses with choices having to be made about whether to open up the economy to protect livelihoods for people on a daily wage or to lock down the economy to fight the virus and protect health. The different policy responses which include emergency stimulus and consumer handouts have impacted our performance in the quarter for example in Brazil and the United States. Although this is a top line trading update, we also thought it would be helpful to remind you about some of the levers of gross margin.
As we explained in our half year results, COVID on costs and adverse mix have been having a negative impact on gross margin. We shared the second quarter figures with you in July and since then currencies have devalued further in several markets and inflation has returned to some of our commodities. Let me turn now to the regions in a little bit more detail. In Asia, Amit rub, underlying sales grew 4.5% with 3.7% from volume and 0.7% from price as lockdown restrictions eased across much of the region compared to the first half of the year. China grew by double digits led by Beauty and Personal Care categories and a return to growth in food service.
After a strict lockdown earlier in the year, India saw a pickup in economic activity even though cases of COVID-nineteen continued to increase. India grew by low single digits, driven by growth in food and refreshment and in hygiene. Turkey grew with the easing of lockdown restrictions and Indonesia declined by low single digits. In Southeast Asia, Thailand declined, reflecting reduced tourism and heightened promotional intensity, whilst Vietnam saw mid single digit growth. Turning to Latin America.
Latin America grew by 6.5% with volume growth of 2.1% and positive pricing of 4.2%. After a negative second quarter impacted by COVID-nineteen, Brazil grew by high single digits in the 3rd quarter. Growth was led by food and refreshment with demand being supported by government consumer subsidies. These are not expected to continue at the same level in Q4. In Argentina, growth was driven by Home and Personal Care categories, including strong growth from our newly launched dilutable laundry liquid and reported growth was also helped in Argentina by a soft comparator in the prior year.
Underlying sales growth in North America was 9.1% with 8.6% from volume and 0.5% from price. Regional growth includes the negative impact of around 1.5% from our foodservice business, which was impacted of course by channel closures. In the USA, food and refreshment grew by 18% excluding foodservice. Sales of Food and Refreshment for consumption in the home continued to be a big driver of growth alongside hand hygiene, although the latter is not expected to remain at the very high levels that we've seen over the last 6 months. Our green cleaning brand, 7th generation and more recently acquired health and wellness brand Ollie each contributed strong double digit underlying sales growth.
In Europe, underlying sales declined 0.8% with positive volumes of 1.3% offset by a 2.1% decline from price. Price declines were driven by a step up in promotional intensity across the region as the depth and volume of promotions increased. In Italy and Spain, countries with big summer tourism seasons, out of home ice cream contributed to a double digit decline in both countries. The UK in contrast grew by mid single digits as demand for in home foods and hygiene products remained high. Our food service business in Europe continued to be challenged, albeit less than in Q2 as restaurants began to reopen during Q3.
However, as I mentioned earlier, many countries across Europe are currently closing restaurants again. Turnover for the Q3 was €13,000,000,000 That's a decline of 2.4% versus prior year driven by currency. Underlying sales growth increased as you know by 4.4%. Acquisitions and disposals increased turnover by 1.3% with acquisitions contributing 1.4%. Net currency related items reduced turnover by 7.7%.
Based on spot rates, we would expect a full year negative currency translation impact of around 5% on turnover and around 6% on EPS in 2020. We will need to navigate through currency depreciation, rising commodity prices and a wider landscape of pressure on consumer spending power going forwards. With that, I'll hand back to Alan to wrap up.
We've moved from response mode to now living with COVID-nineteen, but the environment that we're operating in remains highly unpredictable and we believe an economic downturn is inevitable. We think that planning for a quick macroeconomic recovery is too optimistic and we don't expect to see an acceleration in the near future. Even though the spread and impact of the pandemic varies considerably across the world, a clear pattern is emerging in terms of the way countries are responding. There's a period of intense lockdown, which is followed by an easing of restrictions, which is in turn followed by a reimposition of restrictions as cases begin to spike again. And we see this pattern repeated on just about every continent, very few major countries seem to find a stable new normal outside of China.
So we're focusing on the variables that we can control and we'll continue to show the true strength of Unilever in the most demanding conditions through firstly, the resilience of our business secondly, the speed and agility of our response to rapidly changing consumer behavior and channel dynamics and thirdly, by strengthening the strategic future of the company. We'll continue to drive operational excellence through the 5 growth fundamentals that seem to be working and we're investing to further strengthen our competitiveness. In the second half of the year, we're investing heavily in marketing support for our brands and behind an innovation program that is tailored to the changing environment as consumers learn to live with COVID. Our focus remains volume led competitive growth, delivering absolute underlying profit and free cash flow. So thanks for your attention.
That's the end of our prepared remarks. I will now get into Q and A. I'm slightly ahead of schedule, Richard. Back to you.
Okay. Thank you, Alan. Just note that we've changed our teleconference arrangement. So once you've pressed star 2, you won't hear a noise this time, a beep or a message, but you'll be placed straight in the queue to ask a question. If you're listening to the conference call on the speakerphone, please use the handset while asking a question.
So our first question would be from Richard Taylor from Morgan Stanley. Are you there Richard?
Yes, I'm here. Good morning everyone and thanks very much for the questions. I've just got 2 strategic ones, I suppose. So you said, Alan, that you've moved from response mode to living with COVID-nineteen. It would be really helpful if you could give us a sense for how you're investing to structurally improve the business in a kind of post COVID-nineteen world and a post unification world?
So that's the first one. And then thanks so much for the detailed update on unification. That's really helpful. It sounds like you're making very good progress supported by shareholders. But I'd like to ask a kind of broader question on it.
I think you said previously on your prior attempt at unification that it enabled both more flexibility on portfolio optimization, but also major M and A. It enables that if given that the current structure is an impediment to it. So and I think I'm right in remembering that last year you said that your M and A strategy is evolving somewhat from focused on bolt ons to bigger than bolt on. So if you could give us a bit of color on both what unification means for M and A, but also that portfolio optimization, that would be really helpful. Thank you.
Thanks, Richard. I'll take your first question about investing for post COVID world, and then I'll let Graeme tell you that we don't have any pending major acquisitions. But Graeme, you can handle that as you see fit. So on investing for post COVID-nineteen, let me just say the following, Richard, which is we are continuing to in fact stepping up the investment behind our big brands, our big innovation and in our big countries. And as we've maintained all along, if we can continue to drive strong efficiency programs, it generates more than enough fuel for us to be competitive in those key markets on our key big brands and in our key channels with key customers.
So we're going to be continuing to step up our brand investment. I think another one that's important to point out is as we deepen our action on sustainability, there are a number of places where we are making shifts that might have a short term on cost, things like moving to renewable agricultural materials, things like moving to recycled plastic, the transition we've talked about from fossil fuel based carbon to renewable and recycled sources of carbon in our Home Care business. And we think that the shape of our P and L is going to be able to accommodate those investments. Usually, there's a short term cost for long term benefit. And then the final point is this vexing question of the balance between BMI that we spend in traditional media behind our brands versus the investment we have to make in people for a more manpower intensive marketing world where digital programs take more resource.
So I think you'll see continued investments in our brands, continued investment in sustainability and some investment in future facing skills, especially in the digital and marketing spaces. Graham, unification?
Hi, Richard. Good morning. So, yeah, I mean, unification, you summarized it well. It creates greater portfolio optionality, really strategic optionality for Unilever. But as Alan said, we don't want anybody to think that we're signaling major acquisition through the unification.
In fact, the more sort of short term relevant strategic unlock is actually around significant demergers of the business such as we did with Spreads. And it's also relevant in the case of the T separation that is underway well underway now in the portfolio because as a unified company, we have the option to do major demergers and spins of the businesses direct to shareholders. So that's just one example of an unlock that's there. In terms of M and A philosophy then, what we've said remains the same really from this time last year, the investor event. We expect to have a sort of slower pace perhaps of acquisition.
We'd like to do within that bolt on strategy, we'd like to do slightly larger acquisitions and maybe fewer small acquisitions. But we definitely expect to have a pivot towards more disposal activity as a way of reshaping the portfolio. And just to remind you, the whole basis and role of M and A in the context of portfolio shift is to move our portfolio into higher growth segments. A couple of great examples of that are what we've done with Prestige, which is now over €850,000,000 as you saw in the prepared remarks, growing at 8%, very competitive growth. So that business is performing really well.
And also what we've done in the space of well-being, functional nutrition and VMS, vitamins, minerals and supplements, where we've obviously made a major acquisition last year with Horlicks, but also what we've done with Ollie and more recently Liquid IV. So again, they're examples of the higher growth spaces that we want to move the portfolio towards through M and A.
Okay. Thanks, Graham. Thanks, Richard. So next question is from Celine Panuti at JPMorgan. Go ahead, Celine.
Good
morning. Good morning, everyone. So my first question is on the outlook, I suppose. I wanted to understand a bit whether you didn't feel comfortable to provide an outlook for 2020. What were the reasons behind that given the strong Q3 and an easy comparative in Q4?
And whether there were any one offs that helped Q3? Notably, I saw that Latin America was very strong. And you said that the market was difficult in Latin America. So whether you feel that you have benefited more in the Q3 there? And my second question is going to be as well about the margin points that you made, Graham, during your remarks.
I would like to understand, so you mentioned what has continued to impact H2, as you said at H1 stage. At the same time, you have a better volume led growth. I think the operational deleverage from Adloform should be less impactful than in Q2. So all in all, in the mix, it feels like things have also improved for you. Could you shed light on that?
Graham, I'm tempted to ask you to tackle both your areas of expertise, but you take the first and I'll go to the second one.
Okay. On the question of outlook for 2020, Celine, we never really give any form of short term outlook because we've always had just a broad multiyear range of top line growth. And we certainly wouldn't change that practice now given all the volatility that we see around the world. What we've really tried to do instead of that is try to give you a very a real click down in terms of operational performance in the business and a lot of granularity around how to think about our performance. We hope that's helpful, 1st of all, but we also we want everybody to recognize that the 4.4% top line is a tremendous reflection of the resilience of our portfolio and the breadth of our portfolio.
But if you go one just one level lower, you see you're dealing with incredible ranges of growth, plus 20% in skin cleansing to minus 20% in food service. And with the dynamism and the impact of lockdowns and progression of the virus, we really do feel that the right thing to do is to continue giving you that additional granularity and not try and add all that up to one aggregate number because there are so many big moving parts underneath. On Q3 one offs, again, many, many moving parts. I mean, it's one offs. They feel slightly less relevant in the context of all the things that are happening around our category and geography portfolio.
But what I would call that, I did mention it and you referred to it, which is Latin America. I think we've had a great performance in Latin America. It's super competitive. I think we've got almost 90% of our business winning volume share and over 80% of our business in LatAm winning value share. So I think it's a really, really strong performance overall.
But in Brazil, to the subject of 1 offs, which is 40% of LatAm, we have benefited from some emergency cash transfers that have been made to citizens, and we don't expect that those PAs we think will continue, but not at the same levels that were there in Q4. The other thing in Latin America context is and I referred to it and I'm sure Alan will pick it up in the gross margin point, but foreign exchange is really starting to be quite strongly negative in this quarter. We expect that to be the case in the Q4 and into the first half. It's quite clustered in about 7 markets, Brazil, Argentina, Mexico, Turkey, India and Indonesia. I've missed one out, but that's 6 of the 7.
So and those currency devaluations have been sort of 20% to 30%, and that's definitely a feature in Latin America. So many, many moving parts there, but not much in terms of one offs, just in terms of the economies in Latin America really starting to go into quite significant decline. Alan?
I think the 7th might have been South Africa, was it, Graham?
It was South Africa. Thanks.
So on the margin outlook, Salina, obviously, we don't want to be over prescriptive here, but your starting hypothesis is right, which is in our business, volume growth gives us great operating leverage. But I wouldn't read exclusively into that because we are definitely carrying some COVID costs to the business. I think we spent somewhere €30,000,000 or €40,000,000 already on masks and PPE in the factory. So there's all manner of COVID costs there. Secondly, the mix that Graham's shown you on that football field chart is slightly unfavorable for margin.
For instance, in home ice cream is less profitable than out of home ice cream. Thirdly, I think we signaled very clearly that we tightened our belt on BMI in Q2 when a lot of markets were shut down and we intend to spend behind our bands at really a proper level in the second half. And finally, as Graham said, ForEx and commodities are moving in slightly unfavorable ways at the moment. And so when you add all those together, I wouldn't be over exuberant in what you read into our second half margins.
Thank you, Celine. Next question from Warren Ackerman at Barclays. Go ahead, Warren.
Good morning, gentlemen. It's Warren here at Barclays. Well done on the print today. So 2 for me. The first one is on market share and the second one is on geographies.
On the market share and competitiveness, I think I heard 50% value share last quarter. Now I'm hearing above 50%. Am I over reading that? And can you talk a little bit about the category growth versus market share in the key hotspots you've highlighted? And kind of how does e commerce play into all of that, given it's hard for us to read?
What I'm trying to get to really is a 60% objective, Alan. What gaps need to be addressed, go from the 50% to above 50% now to then ultimately 60 percent? And then secondly, just on some of the big markets, we've obviously touched on Brazil, but I mean, U. S. Momentum is being maintained in Q3.
I was wondering whether you could touch on the U. S, China and Indonesia. India obviously been covered off by Hindustan results. You talked about Brazil, but the other 3 big geographies of your top 5? Thank you.
All right. I'll go first. Graeme, you maybe can talk about some of those big markets. So Warren, I think the easiest way to answer your question is to say we've described a dynamic that we really believe in, which is when we focus on driving penetration growth of our brands, it leads to volume share growth. And if we manage the value dynamic around that properly, that converts into value share growth.
And we're now at around 60% of our business growing penetration. We're also at around 60% of our business growing volume share and our value the percent of our business where we're growing value share is hovering above 50%. I would not describe Q3 as a significant strengthening versus where we were in the end of Q2, which explains the slightly frustrated tone in my voice and also the opportunity that we have to keep moving and progressing in that space. Hotspots were very helpful for us when we were losing overall share and it was being driven by a few spaces. I think it's now a redundant concept.
As you know, we've got a very broad portfolio across categories, brands and geographies. And we won't get from just above 50 to 60 by concentrating on just 3 or 4 hotspots. We'll need to keep working on implementing the 5 growth fundamentals broadly across the business in all categories, all geographies. Touch wood, it seems to be working for us on driving penetration, resulting in volume share. And we've seen the value share improvement, but there's upside there still.
Graham, you want to chat about U. S, China, Indo?
Yes. Hi, Warren. Let me give you on each of those a little bit of a flavor of market dynamic and then how we are performing within that and why. So let me start maybe with China. Obviously, the first of the markets to be hit by COVID-nineteen, strong lockdown in January, but we saw market growth improve slightly in Q3 over Q2.
Our business in China grew by double digits. That was led by Beauty and Personal Care. And also, as I said in the speech, we had a return to growth in food service as that out of full channel fully opened up. Just obviously, about a third of our business in China is now in the e commerce channel and that's growing at more than 50%. So China, really the sort of e commerce, innovative and learning space for the rest of Unilever.
The U. S. Market is still in strong growth, and it continues to be driven by that elevated demand for in home food and ice cream products. And our business in North America grew by over 9% for the 2nd time with a little bit of an impact negatively of about 1 point 5% from our Food Solutions business. But again, food and refreshments continues to be the driver there.
In common with most suppliers, I think, the challenge in the U. S. Has been one of keeping up with the volume demand. And really, we've got a lot of work in the supply chain there to make sure that we're able to maintain our customer service levels and get our product flowing into stores for that elevated demand. India, you know about the market, as you saw from HUL.
There's been a pickup in economic activity in the marketplace in India after a very strong lockdown in the first half. And it looks like we're over the hump now in India in terms of the economy and the market growth numbers. Our business in India did really well to grow at low single digits this quarter. And that again was driven by hygiene products and our food and refreshment portfolio in India, which is now very, very strong with the acquisition of Horlicks. And we're very excited about the prospects for foods in India going forward.
And in Southeast Asia really is a very, very mixed bag. The Indonesian market, specifically big one for us, that contracted in the Q3 and so did our business. We declined by low single digits there. Thailand, just to round out Southeast Asia, it declined quite strongly as well, but that was from reduced tourism and quite a bit of promotional intensity. It's a market that was all about premiumization, which has now moved very quickly to value.
And in a market like that, value comes through increased promotions. And then conversely, Vietnam saw mid single digit growth and went along very, very strongly. So the theme here is lots of different dynamics, lots of challenges and opportunities in all of the markets. We're really pleased that we've simplified the frontline of our business and empowered them to get on with the business of dynamic pricing, innovation, executional performance in the marketplace. And that's pulling through very well, as Alan said, in continued progress with our competitiveness.
And ultimately, it is through that competitiveness lens that we are measuring our overall performance for this year.
Okay. Thanks, Warren. Straight to Guillaume Delmas, UBS. Next question.
Good morning, Alain, Graham and Richard. So two questions from me as well, please. The first one is on pricing and particularly pricing in mature markets because Q3 was your 7th consecutive quarter of negative pricing there. And I think if I look on an annual basis, the last time we saw positive pricing in the developed world was 2012. So essentially my question here is why do you have this chronic almost inability to get some positive pricing in mature markets?
And would you say it's a function of high price elasticity in your categories? Or is there something you can do to fix it with, I don't know, more net revenue management or more disposals? And then my second question is to go back on reinvestments, because at the moment, we're seeing several of your large competitors really leveraging the strong top line to materially step up their investments. It sounds like you will adopt a similar approach at least in the second half. So, again here wondering what are the implications at a BMI level?
Should we expect BMI to increase again as a percentage of sales? And whether you would be looking at extending this reinvestment approach beyond the second half of 2020? Thank you.
Okay. Graham, shall I have a cracker, the first one and you can have a go on BMI?
Sure.
Okay. Right, Guillaume, first of all, thanks. You're right. I mean, the start point is that it is challenging to land price in notably the European market. I think it's much less evident in North America.
And the underlying slow growth European market makes it a difficult environment to land pricing. However, the solution to that is definitely not anything to do with management or organization nor does it nor is it a consideration in our acquisition and disposal program. It's really about strength of brands and strength of innovation and so it does directly link to your second point. As we build strong brands and you look at our strongest brands, they are able to take price. But in the case of Europe, it's always through innovation.
The ability to pass along pricing driven by commodity costs are in the rare case of FX In Europe, particularly Western Europe is negligible and so we're dependent on strong brands and strong innovation programs and that's why we've got our 5 growth fundamentals because putting purpose in our brands makes them stronger. Driving mental and physical availability in our brands makes them stronger, improves penetration and a strong innovation program that's more focused on fewer bigger activities gives us that leverage. So I don't want to underestimate the difficulty of taking price in Europe, but the solution is strong brands and strong innovation, which is exactly what we're working on. It is not organizational or portfolio. Actually, Graham, it's a related point really about reinvestment.
So perhaps you can talk about that.
Yes, certainly, Alan. Guillaume, I'll maybe spend a little bit of time on this because I think it's super important to get a clear understanding. Let me start with what happened in the first half of twenty twenty because when we say we kept our powder dryer, we dialed back a bit. I'd like to give you a little bit more detail about how thoughtful and how dynamic that really was. What we did was we very dynamically adapted and reallocated our BMI spend in response to the crisis in the first half across our wide range of geographies and categories and our media mix.
We stepped up teams to have a weekly review of BMI spend in the first half as the situation is so dynamic. And of course, we didn't spend BMI because some activities were simply canceled or postponed. For example, we spend a lot of our brand investment sponsorships, etcetera. Events weren't taking place, so you don't spend there. Advertising production, the ability to make copy to make films and content, that was obviously constrained in some places.
A lot of the content that we produce was done virtually. A great example of that actually was some Rexona advertising in Latin America. And similarly, they weren't able to do in person market research or research that involves store visits and you saw all of that sort of dial back. We also very actively and I'm still talking the first half year, we reviewed every single asset we had for its relevance. We had to be on message.
We had to make sure that our advertising was appropriate for a world in crisis. And I think we did a really, really good job of being dynamic, of being agile and in the first half and spending sensibly with particularly with assets that were appropriate for the times. So what then to the second half as we have a more stable environment? So we are investing heavily in marketing, let's be clear, to support our brand campaigns in the Q3. There was a big step forward in the absolute quarter on quarter and I mean against Q3 of 2019, a big step up in BMI investment in Q3.
And I think we will spend even more of an absolute step up Q4 versus Q4 in the Q4 that is coming up. And I think we'll continue to do that because we've got great assets, great innovations to invest behind. Against all of that, in the same way that all banks and equity houses aren't equal, I think it's worth noting that all consumer companies aren't equal and the effectiveness of what we spend on our brands is more effective than anyone else. We were named again the world's most effective marketer in 2020 in the EFI indices. We very actively assess the quality of what we spend our money on, how good a campaign is.
We are rigorous with use of digital mandatories, as we call them, for digital advertising. We have stronger safeguards than anybody in making sure that when we spend digitally, it's not in fraudulent media activities that our advertising shows up in safe environments in the digital world and most importantly, that it's viewed by humans and not by robots. And just to give you a couple of stats to reassure you about the quality of the spend that we make, brand power, which is a critical metric and how consumers view your brand, 82% of Unilever's brands are either stable or increasing their brand power. If you want to go to a relatively useful, but sometimes not metric, which is share of spend, Our across the entire marketplace, total media investment has come down as we measure across 54 countries. But overall, Unilever share of spend is, of course, above 100,000,000.
It's broadly stable, and we're in the number one position versus our peers for advertising spend in BPC and the number 2 position in both Food and Refreshment and Home Care. So sorry for the long answer, but I really did want to make sure that you understand 1 or 2 click downs of detail, how we think about spending behind our brands and how effective we
are in
that space. Okay. Thank you, Guillaume. Next question is from David Hayes at SocGen. Go ahead, David.
Thanks, Richard. Good morning all. Morning, gentlemen. So 2 for me, 1 on supply chain and 1 on acquisition strategy again, I guess. So firstly, on supply chain, you talked obviously about a lot of the dynamics in the Q2 to Q3 improvement in emerging market volume, particularly Latin America we can see.
Is there an element of that swing back, which is shipment levels and effectively a lot of these markets, maybe Brazil, India, I guess, is an obvious one as well, where you weren't able to ship in the Q2 and all you've done is seen a catch up on that and that it normalizes in the Q4. Is that a dynamic we should think about? Or is that an irrelevance? And the second question, just coming back to your comments earlier about post unification and the strategic and the acquisitions or strategy outlook for the couple of years. It sounded like your view was net net, you're looking to sell more than buying to get the portfolio to the ideal vision as you would like it over the next couple of years.
Is that a fair conclusion? Is this about creating value through disposals? Or should we be thinking that, that will still be invested and create more value on the acquisition side of the ledger? Thank you so much.
Graham, I think you should clarify on M and A. Just help David out there. I'll say a bit about supply chain. David, the headline on supply chain is that more or less we're shipping to match demand. And so there are not big inventory swings between sell in and sell out quarter to quarter, month to month.
In fact, during this period, we have seen less peaking at quarter end or at month end and so we've got a very good reflection of sell through in our sell in. I think the one area that that's a bit challenged is there are 1 or 2 categories in North America where as Graeme mentioned, the demand is ahead of our ability to supply. We're not used to double digit growth on staple categories in North America. So we're not at the levels of customer service there that we would like and there's probably a little bit of trapped demand there. But I'll just use this moment to give you some fun facts.
Unilever runs 221 factory sites with more than 3,000 production lines. In addition, we've got 840 third party manufacturers that make about 16% of our volume and we service that through a network of 48,000 different suppliers and I share that with you just to I suppose with a little bit of pride in my voice about the incredible job that our frontline supply chain teams have done in maintaining supply. We've not we've really been able to keep up with demand in the most difficult circumstances. And so I say that with some pride, but it is to support the point that we're really selling to demand and there's not huge inventory shifts quarter to quarter. Graeme?
Hi, David. On the question of the balance of acquisition and disposal activity, it really is both, David. Although I do think we'll see a relative to the past, a balance across maybe a little bit more disposal activity. But certainly, we're going to continue to change the portfolio through acquisitions. We generate such strong cash flow in the business, but very high cash conversion.
We pay our capital allocation is really clear. We invest in the business. We invest in CapEx. We invest in making sure that we've got the capabilities, we invest behind our brands. But that after paying our healthy dividend leaves us with excess cash flow, which we then deploy within the portfolio through acquisition.
And I think we'll continue to do that. We have done a lot though. I mean, it's worth I mean, you know this, but we've been very active since 2015. I think we've done 36 acquisitions and about a dozen disposals. So broadly speaking, about 50 odd transactions, some of them very large.
I mean, Horlicks was a €5,500,000,000 acquisition. Carver and Korea was a €2,300,000,000 acquisition. We've done about €6,000,000,000 which were more than €1,000,000,000 but some of them got down into relatively small businesses. And I think what we will see is we would like to do transactions of a slightly larger average size, I think, and less of them. But it's very difficult to predict as opportunities come along and we look to reposition the portfolio.
We'll just continue to act on it. I think on the disposal side, however, we've been very active over the years in disposing tail brands principally from within our foods portfolio. I think we will do the same now pruning the portfolio a little bit in BPC. We've got a number of smaller brands there that we may look to divest of just to tidy up the portfolio, allow us to be a little bit more focused and a little bit bigger in some of our activities. So and then, of course, the other thing to mention on disposals is the ability to do things in a more creative way to do, as I mentioned earlier, IPOs, spins of our business and even partnerships of part of our business where we believe that through a partnership or through further separation, we can provide greater focus to a particular business and so increase its performance and therefore its value creation.
So that's a sort of broad job around how we think about that balance of acquisition and disposal, David.
Thanks for your question, David.
Thank you very much, Richard, and good morning, everybody. Just previously, you've given the sort of cohorts of value, mid tier and premium. And I was just wondering if you could maybe speak about the sort of volume pricing effects with that lens on whether there's any sort of effects of trade down at the moment. And obviously, some people have made some comments that normally in a weaker environment, value does okay and premium does okay. Should we yes, how vulnerable is the mid tier, if at all, in your view, please?
Graham, you want to take that?
Yes, sure. Hi, Tom. So yes, we actually, we think across the broad suite of our portfolio that given the trade down environment that is likely to be a feature going forward. We think we're pretty well positioned actually. We broadly speaking, if you look across the top 60 or 70 cells in Unilever that covers half the business and use that as a proxy for the totality of the business, in those cells, we've got, broadly speaking, 20% of that business in the value segment, 45% in the mid tier segment and 35% in the premium segment.
Now that 20% is more than most. I mean, a lot of branded consumer players don't play at all in value. So it's a really good starting position for us, but we're not sitting on our laurels with that. We have stood up specific squads around the business since the Q1 and they're working very actively in a very quick way to specifically identify and plug gaps in our portfolio market by market, address whether we need to introduce low unit price packs or low tier brands, ways of getting affordability into the marketplace. And on the question of the impact of that on mix and trading down overall, I think it's really important to emphasize that consumers are looking for value and affordability.
They're not looking for cheapness. That's the first point. And the second one is that value does not equate to lower margin. In most parts of Unilever's world, the value parts of our portfolio on a bottom line basis are not dilutive to our margin. And the reason is they tend to come in with a lower gross margin, but they need lower support in terms of brand and marketing investments.
So it's quite possible to be all the way down creating good absolute profit growth and value creation from that value segment. So we don't fear it at all. We see it as a tremendous opportunity. And if you think about our businesses around the world that have experienced deep crisis over the last few years, for example, Argentina or a great example in Brazil, we have reset our portfolio in Brazil over the last 4 or 5 years and reset our channel exposure in order to make sure that we are positioned for the value channel. So we know a lot about it and in fact it is that Latin American team we know so much about are very prevalent in those squads that I mentioned in going around the business and working out how we make sure we're able to play very effectively in value space.
On the question about the mid tier, no, I don't think there is any great exposure to the mid tier. Although you don't want your mid tier is really important. It's the belly of your business, but you do need to have exposure at the top of the price piano and the bottom of the price piano. You don't want to have all of your business sitting in that middle sector and that's the position that we nicely find ourselves in.
Okay. Thanks, Tom. Look, we're going to run on for another 10 minutes. The engagement is great. We welcome it.
So we've got a few more questions. So let's go to Alan Erskine at Credit Suisse.
Good morning. Good morning, gentlemen. Yes, a couple of questions for me. The first one is, we've heard a couple of consumer companies report this week and they've talked about promotional activity in some categories returning to normal, but in other categories where demand has remained elevated, actually trade spend is dying. So I'm intrigued at the step up in promotional activity that you referenced in Europe.
Could you dig a little bit deeper into that? Is it category specific? Has it continued into Q4? And is it also one of the possible drives on margin that you mentioned a few others earlier on? My second question is on innovation.
Alan, you highlighted earlier that innovation is a way of improving pricing power. At the last Capital Markets Day, you talked about the need to step up innovation and to do so in a more bigger and differentiated way. So I'd love to hear any big innovations that you're landing in at the moment in the market or about to land, just to give us some confidence that that pipeline has been filled and is going to pay benefits? And then thirdly, a small one, and apologies if you mentioned this, but have you given percent of sales e commerce in the Q3? Thank you.
Okay. I'll tell you what, the e commerce one's easy and I'll talk a little bit about that. And then Graeme, you pick up your choice of promo activity or innovation and then I'll come back on whichever one you don't handle. Feel free to do both. So Alan, the story on e commerce is that it grew 76% in Q3.
It represents 9% of the company on a year to date basis and 10% in the quarter. The rank order of size within e commerce is that the biggest segment for us is pure play followed by B2B, followed by omnichannel, followed by direct to consumer and other. And from a I think this is something we haven't shared before is from a market shares perspective, the 2 biggest B2C segments, we have more or less fair share in omni channel, so bricksandmortar.com. We have similar off line shares to online shares and in pure play, our online shares are lagging our overall market shares and so we've got a big initiative in the company around e commerce where it really begins with the consumer insights and the marketing activities, coupled with R and D to develop products that have got the value density to make the economics of e commerce work, coupled with then a very agile element of our supply chain capable of responding to the rapid shifts in demand that you get in pure play e commerce, coupled with marketing teams that understand how to run marketing programs that link big data direct to e commerce selling and which are operating on a minute to minute campaign evolution, not an hour to hour, week to week or month to month.
So there's a little bit of a story on e commerce and it varies enormously by category and geography. So in China, about a third of our business is now in e commerce and it's of course a very big proportion of, for example our prestige beauty business, our luxury business and relatively smaller in food and refreshment and home care. Though as we introduce for instance concentrated laundry detergent in North America under 7th generation, 8 times concentrated or some of these things like SIF Eco Refills which are more concentrated, we're starting to see more growth in the home care side of the business as well. So that's a little bit of a tour around e commerce. Graham, you want to talk about promo or innovation?
I'll take promo, Alan. Thanks. The I think the important point to land is that the increase in promotion in Europe and the return of higher trade investment and the trade dynamic is a return back to normal. And what happened in the Q1 and Q2 is that because of the focus on making stores safe, simplifying ranges, getting supply in place, feeding the community and supplying the community, retailers, the promotional environment got dialed back because ultimately there's an element of complexity around running promotional dynamics within the trade. That has now normalized this quarter and we expect that that will continue indeed into Q4 and beyond because to put it one way, our normal joint business plans that we have with all of our customers are now back in action again, having been effectively suspended over Q1 and Q2 as everybody was managing the peak of the crisis.
So in that sense, there's no additional pressure from that, no drag on margin. I don't think you see any of that dynamic coming through because it is just a swing back to normal. The one exception to that, I mentioned it earlier, is a market like Thailand, where when it swings quickly to value and you see down trading, that happens through a very quick step up in promotion. That's a different dynamic to the one that I've just described in Europe. In terms of what will impact the margin going forward, what are the sort of the features of our margin.
First of all, as Alan described earlier, we're going to spend more BMI. We're going to step up and continue to step up. As we've said, we've got increases now in some commodity prices, principally agricultural commodities. We've got foreign exchange devaluation that we're going to have to handle in 7 or so markets in the emerging world. And we've got some ongoing mix negativity and ongoing cost of operating our factories in a safe environment and managing reduced personnel on lines, dealing with absenteeism, temporary labor, etcetera, all of that which we call our sort of COVID on costs.
So they are the main things which are going to be a feature of the margin go forward. Alan, I'll give you back to you on innovation because you're a marketeer and I know it gives you so much energy to talk about it.
Thanks, Graham. I would say, Alan, that our innovation program is way more focused in the funnel and some actually fantastic stuff that's hit the market. I can't say too much about what's coming. But if you look at what's already on the market, groundbreaking technology on Rexona, Rexona Clinicals, which provides unparalleled efficacy on sweat and odor protection is doing exceptionally well and allowing us to premiumize. We've got a whole slew of successes on skin cleansing, including Lifebuoy achieving the latest €1,000,000,000 brand in Unilever gaining penetration in 100% of the markets that we operate in and gaining market share in 95%, growing faster than any other major antibacterial business in the world.
And the first interestingly, Lifebuys is the first brand to prove efficacy not just against viruses, but against the specific SARS-two COVID virus. We've got I won't go in all the details on sanitizers, but don't take lightly the innovation that Graham mentioned where Dove is now about to launch the first sanitizer that is clinically proven to moisturize. So we've managed to separate in the formulation high alcohol content that kills germs and deliver moisturizing benefit that lasts, I can't remember, it's 8 hours or 12 hours, but it's an amazing product. And Vaseline, for instance, launched our antibacterial range in the U. K.
In 14 days start to finish, how about that? Then on home care, we see actually our home and hygiene business doing very well. We're taking Domestos into all kinds of new formats, different types of technologies and we're launching it into a number of new countries including by the way China, so being domestic into China. And maybe on the rest of Home Care, I'd talk about how e commerce ready it is with things like the Sifyco refill tablets that we're now selling for door to door delivery or sort of letterbox delivery, I should say. And a really big innovation in Latin America is we've used technology to create concentrates that you dilute.
So it's 3 times concentrated liquid in Argentina that the consumer dilutes into a big bottle. It sounds pretty straightforward, actually quite difficult to do technically off to a strong start. And then finally on F and R, I think there's 2 really big trends that we're seeing in our innovation there. 1 is everything that's vegan, so whether it's vegan mayonnaise or vegan Magnum doing extremely well, but the other end of the spectrum are indulgence products. So if you haven't tried the Magnum Pints, the double salted caramel Magnum Pint, get wired into one of those.
It is an unbelievable product selling very, very well. And similarly, Ben and Jerry is doing very well in the indulgence side of things. So there's a few examples of our innovation. I think the 2 things I'd say characterize it. Bending over backwards to make sure it's relevant for COVID times.
Most of what you've heard is innovation that resonates with the heightened consumer needs around hygiene, e commerce, plant based eating, etcetera.
Thank you very much. I think we're going to have to end the call there. We still got a number of questioners. Sorry about that. We're just out of time.
If you would like to get in touch with us, we're not in the office, so drop an e mail through to the IR team and we'll be happy to handle your questions and don't have a time to speak. Thanks very much. Thanks, Alan. Thanks, Graham, and have a nice day, everyone.