Unilever, an Agile Supply Chain, and the decline of Scenario Planning

Last month Unilever, the CPG giant, released its Q1 sales results. Unlike P&G, which saw an increase of about five percent, Unilever was relatively stagnant.

According to Barrons:

Sales of the company’s hygiene and cleaning brands, including Cif surface cleaners and Domestos bleach surged by double digits as consumers stocked up to clean their homes to fend off coronavirus. In-home food product sales also rose as shoppers loaded their trolleys.

But ice cream sales and the company’s food service business, which sells ingredients to chefs and restaurants in 180 countries, were hit hard by the pandemic. The company, which also owns the Magnum brand, said it missed out on the start of the ice cream season in Europe, with outlets closed and distributors reluctant to buy stock with an “uncertain holiday and tourism season” ahead.

All of this is understandable. As the table below shows, 79% of Unilever’s revenue comes from two categories: Beauty & Personal Care and Foods & Refreshment. Under COVID-19 quarantine people are spending less time doing their hair and make-up. They’re also eating out less. Packaged foods are flying off shelves, but unfortunately for Unilever, the bulk of its Foods & Refreshment margin comes from Ice Cream and Food Service -two…