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Unilever, the giant behind Magnum and Cornetto, has warned that Europe's sweltering heat wave could adversely impact ice cream consumption as consumers swap frozen treats for cold beverages in the scorching weather. While overall sales have seen value growth, extreme temperatures and global issues present fresh challenges for the multinational consumer goods company.
Unilever's out-of-home sales in Europe, which include sales to restaurants and catering companies, experienced a significant boost after a chilly start to the season transformed into warmer weather in June. However, the recent temperature surge, breaking local records and contributing to devastating wildfires in Greece, has hindered ice cream sales. Health officials have advised residents and tourists in southern Europe to stay hydrated and seek shelter indoors.
While sales of Unilever's in-home ice cream brands, such as Carte d'Or and Breyers, have been subdued during the first half of the year due to consumers tightening their belts amidst inflation, the company's overall ice cream sales have still achieved value growth of 5.7% compared to the same period last year. Higher prices have offset the decline in volumes, with Unilever's sales across various product categories rising by 9.1% in the first half. The company anticipates that price increases will moderate as inflation in input costs eases throughout the year.
Despite the positive sales outlook, CEO Hein Schumacher warned of potential food price volatility due to factors such as the impact of the Ukraine conflict on wheat prices and the effects of drought in southern Europe. Investors responded positively to Unilever's overall performance, leading to a 5% increase in the company's shares after it raised its revenue growth forecast for the year to over 5%.
In summary, Unilever's concerns over the scorching heat wave and its impact on ice cream consumption highlight the delicate balance between temperature preferences and food choices. As summer temperatures soar, Unilever continues to adapt and navigate the challenges the external environment poses.
Photo: Sarah Kilian/Unsplash
