Unilever (NYSE:UL) is set to launch its Clear Hair Care products in the U.S. next month. In a market flooded with hair care products, Clear differentiates itself with its focus on scalp and hair health and will offer variants for men, women and African-American hair. The brand was first launched in China in 2007 and is currently sold in 42 countries. Unilever is the second largest consumer goods company in the world after Procter & Gamble (NYSE:PG).
First Major Hair Care Launch Since Alberto Culver Acquisition
With Clear shampoos and conditioners, Unilever is pursuing a deeper presence in the multi-billion dollar U.S. hair care market, positioning itself as specializing in scalp care. This is Unilever’s first major hair care launch since it acquired Alberto Culver in a $3.7 billion deal last year, which made it market leader in hair care.
With popular brands such as TRESemme and VO5 in hair care and St. Ives and Simple in skin care, Alberto Culver has helped Unilever extend its product line-up to new premium price points. Unilever’s other popular hair care brands include Dove, Sunsilk and Lux.
Focus on Personal Care Business
Boosted by Alberto Culver and Sara Lee‘s personal care business acquisitions and strong brands such as Dove, Lux, Sunsilk, Ponds and Vaseline, Unilever’s personal care business grew strongly in 2011 to become its largest category, with 8% sales growth balanced between volume and price, and stable operating margin.
Personal care accounts for about 40% of Unilever’s stock price. The company’s recent acquisitions like Alberto Culver, Sara Lee, TIGI, Concern Kalina in Russia have focused on the personal care segment. It has simultaneously been trying to reduce its exposure to the food business.
We value Unilever with a $32 Trefis price estimate of its stock, almost in-line with the current market price.