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We are about to hand over to Unilever to begin the conference call. [Operator Instructions] We will now hand over to Richard Williams.
Thank you. Good morning and a warm welcome to Unilever's Third Quarter Trading Update. As usual, we will review the results and have Q&A at the end. I know it's a busy results day for many of you, so we will aim to wrap up in about 40 minutes. Graeme will talk about the highlights of our performance and the growth by division. I will then cover the regional performances and Graeme will wrap up with the outlook for the year as a whole. First, I draw your attention to the disclaimer to forward-looking statements and non-GAAP measures. And with that, I hand over to Graeme.
Thanks, Richard. Good morning, everybody. So overall growth in the quarter was 2.9%, and that was balanced between volume and price, and showing an overall step-up in volume from Q2. And this keeps us nicely on track for a full year guidance to be in the lower half of our multiyear range. Emerging markets remained strong in aggregate at 5.1% in the quarter with good volume growth, and our developed markets were flat in the quarter. We saw continued good performance in Southeast Asia, in India and in China, whilst developed markets improved a little bit versus Q2. Last quarter, we mentioned some specific hotspots which we're going to pick up on as we go through the presentation. Year-to-date, our underlying sales growth is 3.4%, and accelerating growth from here remains the absolute top priority for the business. This means delivering successful innovation and communication, continuing to reshape our portfolio, developing our products to be fit for faster-growing channels like e-commerce and over time fully leveraging our geographic footprint.So looking in a little more detail, we're pleased with our performance in many of our geographies, although the markets remain challenging in a few of them. Home Care and our business in Asia continued to deliver consistently strong growth with Indonesia, the Philippines and Vietnam all performing well. The powerhouses of China and India are seeing consistent and solid growth with strength in general trade and modern trade channels. And we continue to perform well in the fast-growing e-commerce channel in the key geographies. Some markets have slowed sequentially this year. The China market have softened a little bit, and while Indian markets remained relatively strong, they have also moderated. Our markets in both the U.S. and Europe remain quite muted. By way of shorter-term context, Q3 '18 set a relatively tough comparator to lap. And as most of you know, in Brazil last year, we benefited from restocking after the truckers' strike there. That created a 25 basis point headwind this quarter, and despite this, our business in Brazil had a good performance. We do remain optimistic for continued improvement in Brazil, but it will take some time. In Northern Europe, the weather gods presented a very tough weather comparator to beat from last year, and in the end, this led to a headwind of about 25 basis points of growth for this quarter. So let me move on now to the divisional performance in a little bit more detail. Beauty & Personal Care grew by 2.8% in the quarter with 2.1% volume, and that takes the year-to-date growth to 3.3%. Deodorants and skin care grew by mid-single digits. Haircare was more subdued as a result of high and sustained competitive intensity in both the U.S.A. and in China. Our Prestige unit continues to grow strongly and competitively with our science-based hair brand, Living Proof, and the cruelty-free makeup brand, Hourglass, both growing at strong double digits this year. Hourglass is growing both in its home market of the U.S. and internationally, and it now has 50% of its sales outside the U.S. And we're moving quickly in Beauty & Personal Care to deliver more natural innovations, and this can be seen across our biggest brands. In skin care, microbiome science, where we have very strong R&D capability, is gaining traction with consumers. In Dove, we are reinventing gentleness through being the first mass brand to launch an innovation that cares for your microbiome, which is, of course, the skin's living protective layer. The sulfate-free Dove formula with 100% gentle cleansers cleans without stripping the microbiome, and we've rolled out this innovation now to 36 countries already. We've also launched a number of other innovations in the natural space under St. Ives in the U.S. and with Lifebuoy natural ranges across Asia. In oral care, we're building steady penetration and gaining share with natural toothpaste such as the Vietnamese charcoal and aloe product that's shown here on the chart. Our Coco White range in France is also doing well, albeit in what is a tough retail market.Turning to Food & Refreshment. Foods & Refreshment delivered 1.7% growth. Foods grew both volume and price, but ice cream declined in volume as a result of that tough weather comparator in Europe. In the U.S., we were pleased to see a step-up in ice cream performance compared to Q2 supported by our super-premium ice cream brands, Talenti, Magnum and Ben & Jerry’s. All 3 brands have launched exciting innovations this year, tapping into indulgent trends which helped to drive the category. Indeed, according to Nielsen, the majority of the top 20 innovations by dollar value in packaged ice cream in the U.S. have come from Unilever. In Foods, dressings grew well. And in Savoury, snacking and bouillons continue to lead to the growth in Asia. Plant-based products and variants continue to grow across the whole portfolio. Our vegan ice cream range, which is now in all of our major brands, has grown significantly this year across the developed markets with strong repeat and loyalty rates. And in tea, Pukka continues to grow very well and is now available in 23 countries. Whilst in India, Lipton Green Tea is driving share and penetration.Home Care grew by 5.4% in the quarter with 3.2% from volume, taking Home Care's year-to-date growth to 7%. This consistently strong performance is a result of both innovation and market development. In fabric solutions, we are targeting market development both from powders to liquids and from liquids to capsules and from concentration initiatives. Our growth was driven by the big laundry markets of Brazil, China and India. In Brazil, Omo Perfect Wash, which is an innovation that combines both cleaning power and concentration, is selling well. And in Colombia, we've launched that market's first-ever product with 100% postconsumer recycled packaging under our Fab brand. Looking to India, we have crafted and launched a new brand called Love and Care, which is a premium detergent focused on preserving delicate fabrics. With an 80% emerging market footprint in Home Care, we must always be mindful of providing the consumer with products and brands across the whole affordability spectrum. Love and Care is, of course, placed at the higher end of the spectrum while we continue to win in the belly of the market through the core brands of Wheel and Surf Excel. We're delivering double-digit growth in home and hygiene through our Sunlight and Cif brands, which are both growing strongly year-to-date. Cif natural sprays in Europe and our concentrated eco-refill innovation are just a couple of examples underpinning the growth of Cif. And with that, let me hand you back to Richard, who's going to cover the geographies.
Thanks, Graeme. Asia/AMET/RUB grew 5.6% with a strong mix between volume and price. Volumes were up 3.1%, and price growth was 2.5%. South East Asia performed strongly with continued momentum in Indonesia and the Philippines and double-digit growth in Vietnam. Growth in China was good, helped by strong performance in e-commerce and the premium portfolio. Turning to India, growth remains good and in line with Q2, although, as expected, market growth has continued to moderate a little. In Turkey, we continue to grow strongly in a high inflation country. Our ice cream business has performed well this year, with Magnum Ruby and Cornetto Matcha being our most successful impulse innovations ever. And our Ice Cream Now business successfully reaching 1,800 restaurants in only 6 months. In South Africa, we maintained momentum. However, in Nigeria and Ghana, strong market slowdown and the liquidity squeeze is negatively impacting our performance.Latin America grew 3.2%, all driven by price. Brazil grew in the quarter with volumes flat despite annualizing a partial recovery of the truckers' strike, which accounted for around 25 basis points at group level or 200 basis points at Latin American level. We're pleased to see momentum return in Brazil and remain cautiously optimistic on the economic outlook. As Graeme mentioned earlier, our concentrated Omo innovation is a strong performer, and we have now also used this concentration technology to launch under the Surf and Brilhante brands in Brazil. In Argentina, the economic crisis continues, with a further significant devaluation this quarter. Volumes continue to decline, and so our focus remains on ensuring that we are offering the right portfolio of products to consumers at all price tiers while protecting our margins and share, ready for the recovery when it happens. We flagged in our last call that we would review our treatment of Argentinian price. And during the quarter, we announced the change in method of accounting for hyperinflationary economies, which currently include Argentina and Venezuela. The normalized level of price growth included in Q3 is 30 basis points and also 30 basis points year-to-date at the group level.North America grew 0.3%, with price growth of 0.6%, volume decline of 0.3%. This is a small step-up from Q2. E-commerce, in particular omnichannel, continues to be a big driver of growth. We've previously called out dressings in the U.S. as a hotspot, and we're pleased to report a return to growth in the quarter and gaining share again in the latest 12-week read. We believe that our brand-led investment is the right way to add value to the category. Sir Kensington continues to grow strongly in the premium segment. As mentioned by Graeme, ice cream performed better led by the super-premium sector. In Beauty & Personal Care, deodorants is leading the growth this year, but haircare remains challenging. We continue to focus on driving competitive growth through increased investments and innovation. Our natural brands continue to grow well, for example, Seventh Generation and Love Beauty and Planet, and we see further opportunity in this space as awareness and trial builds. In addition to seeking more natural products, plastics is of course a big concern amongst many U.S. consumers. Our business is working in partnership with Walmart to drive our Bring it to the Bin initiative, where shoppers are encouraged to recycle product packaging.Turning to Europe. Europe declined 0.3%, with volume growth of 0.5% while price was down 0.9%. Similar to the second quarter, ice cream was impacted by a very warm summer in 2018 whilst this year saw more normal summer conditions. Eastern Europe and Italy continued their strong performances from the first half and grew well during the quarter across the divisions. In Italy, the Cif brand is activating its purpose through city cleanups to restore lost beauty, and our Coccolino brand has teamed up with the well-known fashion house, Moschino, to launch an innovation which is delivering great results in our fabric sensations category. In Germany, the decline slowed, but retail challenges remained.Looking at turnover. Turnover for quarter 3 was EUR 13.3 billion. Underlying sales growth added 2.9%. Acquisitions and disposals increased turnover by 0.5%. And in total, currency movements added 2.3%. Based on the latest spot rates, we continue to expect a positive currency impact of around 2% on turnover and a little more on EPS. With that, I'll hand back to Graeme.
Thanks, Richard. Look, before turning to the outlook, I'm sure that many of you will have seen last week's announcement that we made of 2 new goals that we've set regarding our use of plastics. Now the first is a commitment to half our use of virgin plastic in all of our packaging, and the largest contributor to delivering that commitment will come from a significant increase in our use of recycled plastic. The rest of that commitment, more than 100,000 tonnes in total, will come from reducing our use of plastic in absolute terms. And we're going to achieve that through products like Cif eco-refill and new packaging and delivery model such as hair refillery stations. The second big goal is to collect and process more plastic packaging than we sell, all of this by 2025. And these 2 new goals on plastics complement the commitments that we made back in 2017, which were to ensure that all of our plastic packaging is reusable, recyclable or compostable by 2025 and to use 25% postconsumer recycled material. Together, they demonstrate the fast and radical action that we're taking at every point in the plastic cycle. And we're making this investment because we believe that plastic has its place, but that place is not in our streets, or our rivers, or in our oceans. And it's not just us who believe this, but most importantly, it's our consumers. And so this is an investment very much worth making. And there's no doubt that this is a very ambitious and very challenging commitment. Keeping plastic in the economy and out of the environment requires everybody to work together, whether that's product designers, whether it's governments, consumers or the waste management industry. Now we already have initiatives to collect and process plastics such as this example on the chart, which is from Indonesia. To help boost recycling rates and develop a functioning infrastructure, we support local collection through various initiatives such as community-based waste banks where individuals sort their waste and deposit it in exchange for payment. And so far, we've helped set up more than 2,800 waste banks, which together have presented over 7,700 tons of nonorganic waste from being dumped. Technology and innovation is also key. For example, black plastic is generally not recycled, but we have developed a technology which allows black plastic to be detected and sorted by recycling plant scanners. This is now being used by our brands, TRESemmé and Axe. The new technology means that an additional 2,500 tons of plastic bottles could now potentially be sorted and sent for recycling each year here in the U.K. alone. And we'll share our work and the insights generated with other manufacturers to enable wide use of this technology and this approach. So with that, let me finish by reconfirming the guidance for 2019. In 2019, we expect underlying sales growth to be in the lower half of our multiyear 3% to 5% range. Our progress on underlying operating margin continues through a focus on savings, waste and productivity and ensuring that we have competitively support our brands both in BMI and in building new capabilities. And we'll target another year of strong cash flow while maintaining roughly our current level of gearing. Our outlook and all other items remain just the same. And just before I finish, a reminder that our Capital Markets Day in New York will be webcast on November 13 and 14. Thanks very much for your attention. That's the end of the prepared remarks, and Richard and I now look forward to taking your questions.
Thank you, Graeme. [Operator Instructions]
So looking, we have the first question from Alain Oberhuber at MainFirst. Go ahead, Alain.
First question is regarding Personal Care. We saw a gradually slower organic growth over the last couple of quarters. Could you give us a little bit more granularity? And when do you expect that this organic growth in Personal Care will start to accelerate again? And the second question is regarding Brazil. Also there, what do you expect on the development, given that we see a little bit slower growth there as well? Is that -- will that continue into Q4 or even in 2020?
Thanks for the questions, Alain. Why don't I take the first one, Richard, on Beauty & Personal Care and you pick up the one on Brazil, if you like. So Beauty & Personal Care performance, Q3 growth, yes, a little bit slow, but it was very good in deos, very good in skin care, Alain, and very good in oral. We saw slower growth in hair and in skin cleansing. First thing I see about Beauty & Personal Care, 24% of that business is in the U.S. and 14% is in Latin America, which are both currently low-growth markets for us. From a competitiveness perspective, we have volume winning share in 62% of Beauty & Personal Care, and that's been driven by things like deodorants, which was up mid-single digits, helped by the Rexona clinical range, it's been a very effective innovation. Skin care, as I said, is also performing up mid-single digits, with good growth in Vaseline and innovation called Ponds Glow cream in Indonesia and Vaseline Therapeutics in Thailand. Skin Cleansing, as I said, is a little bit more muted. The Lifebuoy and Lux brands in India are down a little bit. We've been a little bit uncompetitive on pricing there and we've corrected that now. And in markets in South East Asia, which generally are strong for us across the broad church of South East Asia at the moment, we're performing pretty well. Hair, of course, and we've spoken of fair bit about of hair over the course of the last few quarters, it remains quite challenging in BPC. It's low single-digit growth. The 2 hotspots to call out are the U.S. and North Asia. Different dynamics, Alain, in both of them. In the U.S., our competitiveness has definitely stepped up. We're looking at our wider plans, and we've got investments going into North America in a competitive battle with a big multinational. In North Asia, it is more local competition that we see in haircare. There's a particular brand in China which is taking share, that's built quite a strong position from all of the multinational players. So sorry for the sort of long and broad answer, but it's a broad question. We're committed to accelerating the rate of growth in Beauty & Personal Care. There are many pockets of very strong performance both at a category level and a geography level in Beauty & Personal Care, but a couple of hotspots principally in skin cleansing and in hair, and we're working very hard to address those.
Yes. Alain, you asked about Brazil. Brazil remains tough. GDP growth is still in the 0% to 1%, probably a bit less than 1%. Our own growth there was north of 1% in the quarter, but that's with a headwind from the recovery from the truckers' strike in the back year of 400 or 500 basis points. So we're pretty pleased with how Brazil is doing for us at the moment. But it remains tough. And your question is, I think, very much what do we expect? We think it's going to continue to remain tough, but we're cautiously optimistic about our business there and the market going forward, and we wouldn't say anything stronger or weaker than that at the moment.
I'd just add to that, that we're very confident that our performance in Brazil is a competitive performance, in particular through the crisis, the economic crisis, which is now mitigating in Brazil. And we've done a very good job of moving down to Tier 3 brands. If you remember, we repositioned the Brilhante brand quite successfully in laundry. We've launched a number of other Tier 3 brands. And in particular, we are performing well in the fast-growing cash and carry channel, which is very much the equivalent of the discounter channel in Brazil. So kudos really to our business there which has performed very well in a dynamic and difficult environment.
Thanks, Alain. Next question is from John Ennis at Goldman Sachs. Go on, John.
Two from me, please. The first is on Indonesia. I wondered if you could comment on your market share performance in the region and maybe give some color on your BMI outlook for this year given that it's been a region where we've seen some pretty big reductions over the last 4 years. And then my second question, I guess, is coming back on to the U.S. shampoo business. The trends when you look at Nielsen seems to have worsened more recently. So I just wondered if you could, I guess, give us a bit more detail on the strategy to revive that business, whether it's new launches, whether it's increasing promotions. And maybe a bit of time line if it is new launches and when they should start to, I guess, feed into the market.
John, let me take the first one in Indonesia because it's sort of my -- it's kind of home patch for me, I suppose, and always liked talking about it, to be honest, and let Richard think a little bit about the question on the U.S. hair business. Although, I think, we'll be rather cagey in what we say there given that it's quite a competitive situation and we don't want to give our game away. On Indonesia and South East Asia, generally, we got good strong performance. Markets in South East Asia are growing at about 4%, and premiumization is really the big value driver across the region. We're benefiting both in Indonesia and Thailand from being through the elections that we had in the spring, and things have stabilized politically and that's providing a benefit for us. Personally and as a company, I think we're all very pleased to see our big and successful business in Indonesia back into strong growth. Indonesia is growing slightly higher than mid-single digits in a market that we think is growing between 3% and 4%, very difficult to get a Nielsen or IRI-based measurement of share performance in Indonesia, and what we tend to do is look at overall market growth compared to our overall growth. So we're very clear that we've got a competitive and improved performance there in Indonesia. I'll come to your question on BMI levels in a second, but I did want to say that the real dynamic there has been a shift in the competitive landscape with some -- a lot of local competitors, a lot of local brands competing very strongly in the Indonesian marketplace. And we've been transforming our portfolio, particularly in Beauty & Personal Care, in order to respond to that, launching a couple of very Muslim beauty-focused brands, another brand called Korea Glow, which was launched in Indonesia as well. We've also been working hard to address competitive challenges within our ice cream business. And overall, we feel pretty optimistic about maintaining that good momentum in Indonesia. On the question of BMI, it's a very traditional TV-driven media market. And I have to say that some of the biggest dividends from our ZBB program, particularly in the area of media fundamentals, have taken place in Indonesia. In fact, the leader of our business in Indonesia actually leads that thrust within our ZBB program of media investment. And for example, it's quite a digitally-focused market, becoming more digitally-focused. We're very effective in making sure that our digital mandatories and our compliance with good quality digital advertising take place in Indonesia. Above 70% of all our digital assets passed that test. And indeed, testing our media assets before they show them, our test rates are well above 70% also in Indonesia. And that has been -- that has meant that we've been able to take our BMI and our investments in Indonesia work harder for us. And I think you're seeing that in the good strong performance that we're having there.
Yes. And on U.S. hair, we called it out as a hotspot last quarter, so I think you're right to ask us how it's going. It continues to be a very, very competitive sell for everybody. We're seeing steps-up in media and price. And we're stepping up our investment in haircare in the U.S. and scaling up innovation. I'm not going to talk too much about that, obviously, here. Overall, we know our plans are in place. We are pleased with the overall performance in Dove and Sundial, but I think we have more work to do on Suave and TRESemmé. So yes, that's the hotspots, still more work to do. But the other hotspots to embed are dressings, as Graeme has already called out, that's one where we've already begun to see improved performance as we focus on it. Okay. Next question coming from James Targett at Berenberg. James?
Two from me. Firstly, sorry just to come back on the U.S., but I guess more generally across categories. I think earlier in the year, you said you were going to be focusing on improving growth in the U.S. through stepped-up innovation rather than high levels of -- or rather than chasing promotional activity. So I just wondered if you could comment generally where you were in terms of new product launches in the U.S. in terms of phasing. Was there a big step-up in Q3? What we should expect over the next couple of quarters? Then secondly, just looking at organic growth. Again, at the start of the year, I think you said the big delta of growth, whether it was going to be 3% or 4%, was going to be mainly due to Latin America. I just wondered as we stand today looking over to the next 12 months where you see the biggest areas of delta to growth line.
James, let me just touch on your second question on sort of overall growth momentum and then go into your question on the U.S., and then let Richard maybe pick up the point around Latin America market growth and turnaround more generally. First thing to say is markets in aggregate, I mean, the measured read is just north of 2%. If we include an adjustment for unmeasured channels, our view is that our markets generally are growing around 3%. And we're growing just a little bit faster than that. So it's a good solid performance, and we're pretty competitive. We've got parts of our business, for example, Home Care and our emerging markets, which are winning share in 60% of the business. And in Beauty & Personal Care, we're winning share in 60% of volume. So all the signs are that we're becoming more competitive. We're not satisfied with our rates of growth currently, but it is faster than our best read of the market growth. It's very much within what we guided for the year and what we expected to see. But there's more performance out there and we're very optimistic about that. We know there's more that we can do, and we're excited by the opportunity to step up. So that's just a general comment, I guess, on growth rates and step up in performance. Turning to the U.S. and your question on North America more specifically. There was a slight pickup actually in market growth in North America in Q3 to around 1.5% to 2% with most of it coming in Foods & Refreshment. Now we will have driven part of that, of course, with the activity and the step-up and success that we've had in ice cream in North America, and in particular, the turnaround in momentum that we've had in the dressings business in North America. We're back to winning share in dressings North America. As we've said many times in these calls, we're really seeking to try and create value within that category by focusing on the brands and brand investment and to grow category value. It's been a very tough competitive battle, but I think we're calling the turn on that now. And you see that we focus in on these businesses, do the right things, innovate properly and invest well with our customers and behind our consumers, we get back to winning position. So that's good news there. In ice cream, of course, there's the belly of the big ice cream market in North America, which is pretty commoditized. A lot of the volume going through that, the sort of mass channel, is fairly low-margin commoditized stuff. We've been focusing on changing our portfolio, as you know. We acquired the Talenti brand. We launched the Magnum brand some years ago, and we've got Ben & Jerry’s. And in what we define as the super-premium sector, we have almost half of the super-premium sector in North American ice cream as Unilever brands. And as I said in the presentation earlier, almost all of the innovation coming through in ice cream North America is being led by Unilever. In that mass portfolio, we're just focusing on getting the range right. We've rationalized quite a number of SKUs, and we've taken some pricing action to reflect commodity and logistics inflation, and that has cost an uptick in the ice cream performance, and you see that reflected in the market growth. And then finally, we've talked a fair bit about BPC, well actually, we've talked a lot about haircare in North America. But I do want to highlight the deals actually, where we also compete with the big multinational competitor, continues to be a significant growth driver in North America. It's growing year-to-date at mid-single digits in North America. So you know, remember, we've got a big BPC portfolio there, it's our biggest BPC business. And whilst we're involved in competitive dynamics in haircare, there are many other aspects of BPC that's performing strongly.
And let me just pick up the Lat Am question, we already talked about Brazil, but more broadly, it's true for Lat Am as well. It remains very challenging. Give you a few numbers. The market overall, we think, is growing around 2.5%. If you take out Argentinian hyper price, probably something like 5% or 6% if you include it. In Brazil, we -- as I said, we're cautiously optimistic. We have actually seen signs of some consumer confidence, which is why we are returning, which is why we're cautiously optimistic. And in Argentina, volumes are declining at 16%, so everything remains really tough on the ground in Argentina. As we said in the prepared remarks that our focus is very much on protecting margin, protecting share in Argentina and coming out stronger. Inflation there is now something like -- it's like 60%. So we're not expecting anything to turn around quickly in Argentina. But as I said, Brazil, the biggest market, cautious optimism and our business doing very well there.
Just one thing I want to highlight because the chart that I'm looking at has got the -- in the middle box, has got the new innovation Perfect Wash that we launched behind Omo in Brazil. Most of you know that Omo in Brazil is our biggest single brand position in the entire company. It's one of the strongest iconic brand positions that we have across the entire portfolio. And relaunching the Omo brand with a completely different look and feel, with new technology, 20% concentration, better carbon footprint, lower plastic footprint and getting real consumer acceptance behind it is a great example of a very strong innovation, a bold innovation in one of our biggest markets, landing successfully and driving growth, albeit in difficult market circumstances that we're all aware of. But a great example of Unilever continuing to do the right thing and innovate behind the consumer regardless, really, of the challenges from the market circumstances.
Right. Thanks. So straight on to the next question, which is from Martin Deboo at Jefferies.
Yes. Martin Deboo at Jefferies. The question is on plastics, actually, it's nothing to do with trading. And I guess the context over from my side is sort of welcoming the initiative and welcoming the boldness and the ambition, but sort of worries and obsessive about the costs and practicalities. So if I could ask you on that. I mean, I guess, it breaks down into you're implicitly targeting about 300,000 tons of use of recycled plastic within 5 years and you, I think, consumed just a bit less than 5,000 tons in 2018. So the first question, I think, is how do you scale that level of ambition? And given everyone else has similar targets to yours, does that implicitly mean that you're going to collaborate with the likes of Nestlé to know on some sort of recycling supply chain? And then, I think, the second question is given you're all going to be bidding, merrily bidding up the usage and price of recycled plastics, what's the cost implication of it, if it's material to margin? I guess a useful number to know, if you are willing to share it, is what proportion of your cost base or raw material cost base is plastics at the moment? That's the question.
Martin, thanks. Really terrific question in an area that I hope we can actually spend more time in the months ahead and exploring actually. The first thing is in terms of -- it's great news that everybody in the sector has got commitments on plastic. And of course, it's the right thing for everybody to do. It's demanded by the consumer and therefore it's -- from a business perspective, makes perfect sense as well. And it's really good that everybody in the sector is focusing on it. I do think that the commitments that we made last week actually go a step ahead, and we're hoping that by doing that we will trigger further action from other companies. Because this is not about competition as such, this is about making systemic change, and that's what we're trying to achieve. As I said in the talk there, these are tough and really challenging targets and I think we should all feel some butterflies in our stomach about the ability to achieve them. But we think it's the right thing to do our homework and set a bold vision and not be conservative in our aspirations here, and that's what we've tried to do. What's distinctive about the -- particularly distinctive about what we've just announced on plastics is the point on helping to collect and process more plastic packaging that we sell by 2025, getting down to about sort of 0 incremental plastic in our system by 2025 and reducing our use of virgin plastic by 50% with an absolute reduction in plastic use. That is quite distinctive, I think, across the industry and, as I said, both challenging and bold in its outlook. Will it require us to collaborate across not just other manufacturers and suppliers in the industry but retailers and collection systems? Absolutely, it will. And I think that is where the one main body of effort will be in that collaboration in harnessing the resources that we have together collectively for systemic change, particularly in the markets where plastic waste running into oceans is most concentrated, and we very much look forward to that. There's a fair amount of collaboration already, but I can only see it stepping up from here. But the other thing fundamental we have to do is to think about design. This is a design challenge sitting around packaging and products. It's going to require us to introduce new packing materials, scale up new business models, getting to reuse and refill formats. And this might not all be entirely attractive from a consumer perspective, and we're going to have to do that on unprecedented speed and intensity, so it's going to be challenging going forwards. To give you a sense on the cost, our current plastic packaging spend is about 5% of Unilever's turnover, and our plastic packaging footprint is around 700,000 tons. Now I won't be specific with you on what the on cost is for that, but I have a good sense, myself already, of what our cost of including more PCR. And you're quite right in terms of the market dynamics. With PCR, there'll be inflation before there's deflation, I would assume, in the market for PCR plastics. But I'm aware of the range of on cost for that for 2020 and I'm also very clear that that's an investment worth making within our P&L. We talk very often on these calls about A&P as a percentage of turnover, but there are many, many areas in which you have to invest in your business. And this is just one example of where we think the investment that we will make will be worthwhile. It'll show up in a different line of the P&L, of course, but it's very much focus on doing the right thing for the consumer for the long-term growth of the business. And with our savings programs, and you can expect that we'll deliver another couple of billion of savings this year and that, that will continue at similar rates or even beyond that in the coming years. We're very committed to carrying on our savings and productivity programs. When we talk about reinvesting those savings, this is the sort of area that we will continue to reinvest in, investing behind and making changes that are in the interest of the consumer and the wider planet.
Okay. Now, I said we'll try and finish in 40 minutes, we still have a number of questioners, so I suggest we just maybe take a couple more questioners. I'm sure you want to hear from Graeme. Could you just have one question each, and we'll finish -- hard finish in 5 minutes. So the next question, Alicia Forry at Investec.
My question is on your comment about new capabilities to support the brands. I was wondering if you could elaborate a bit on that. I think you've touched some of these things in your comments, but I'm particularly keen to know if there are specific areas within your brand support functions that would benefit from additional investment, digital maybe, just your thoughts.
Alicia, thanks for the question. I know it's a bit of an extension actually from where I finished the conversation with Martin there. It's a great example of where investments that we're making in the business, specifically around data and digital and the shift to a hyper-fragmented consumer communication landscape, where we're having to invest in building capability in-house as opposed to simply making more advertising and buying more media to show that externally. So take our digital hubs, we've now got digital hubs rolled out to over 25 locations, and we'll continue to expand that up above 30. You'll get to see them in the U.S., in particular, if you come to our Capital Markets Day. One of the most exciting parts of visiting any Unilever operating company now is to see the activity taking place in our digital hubs. But it goes beyond that. We've talked for a while now about our people data centers, which is the ability to listen to social media and to see insight from that. A great example of an innovation that came from that actually is Marmite peanut butter here in the U.K., which is the first time we've put a permanent innovation behind Marmite in its history. We've decided that we'll keep that innovation in place. And that was very much driven through insights that we gleaned from the Marmite consumer by using our people data centers to see the combination of Marmite and peanut butter was what the consumer wanted. Then you've got U-Studios, which is our in-house digital content preparation capability. And all of those things mean that we're investing and building capability through our overheads line, not necessarily in the BMI line, and that's why our marketing -- the proportion of overheads that are invested in marketing have gone up as a percentage of overall overheads, whilst overall overheads have been contained at a flat level. So that's just one example. Another example I could give you in terms of media capability. I think we've got if not the best then one of the best media teams and capabilities that are out there on the planet. I spent an awful lot of time with them. I find it a very interesting place to learn about the changes that are taking place in our industry. Just little things -- well, big things actually. Brand safety, where your brand shows up on YouTube or on Facebook, et cetera, really leading with that requires capability, it requires knowledge, it requires credibility within that space. And we're a very active participant in all the positive changes that are taking place in that space as a consequence. And then things like ad fraud. I think we have the lowest rates of ad fraud in our digital advertising in the sector. Our digital media spend is 40% of total media spend. We spend about EUR 3 billion a year on media, so 40% of that is digital. And some -- the average rate of ad fraud, I think, is still up in the 30% to 40%. When you can get that down to single digits as we can, then obviously, the bang for the buck that you're getting within your investment is much, much higher, and there's a very good ROI in that. And then the final point, sorry for the long answer, is really on data capability. And that -- our data strategy has been very strong and very consistent for a number of years now in Unilever. Our acquisition of first-party data, second-party data and third-party data, how we use that to get consumer insight, how we get personally identifiable information, that's a key asset for our business in every one of our companies. It's a core raw material of the digital hubs. It allows us to get a number of distinctive traits around the consumer and it's at the core of what we call data-driven marketing. It allows us to retarget and really be much more precise with the media messages that we send to consumers, making our investment much more effective in that space. So sorry for the long answer, but it obviously was a broad question.
Okay. In which case, we're going straight to David Hayes to ask the last question, which I hope is a short question because I did promise we would stop. David, you're on.
Pressures on for the last question. I'm going to take you back 3 years, if I can. I think, Graeme, you talked about the dynamics of the category growth being that you -- so Unilever were taking growth, the locals and private label were taking growth and then the donators of that growth, whether they were multinationals. If you look back sort of 3 years when you made that comment and then looked at it now, is it as similar dynamic? Or is one of those units kind of doing better or worse than it was before? And what's driving that?
Thanks, David. Yes, that's right. We -- back 3 years ago, we were clear that the -- what was happening from locals and private label wasn't coming from Unilever, it was coming from other multinationals. I think we're more on the pack now. As I said, our markets are growing at 3%, we're growing faster than that. At that point in time, we were growing comfortably 60% of our business winning share in aggregate. As you know, we're not yet in aggregate. We are around about half of our business in aggregate winning share. And there are many, many ways to look at this, and it gets a little bit difficult because measures of market growth are probably a little bit less better quarter-by-quarter, although sequentially they still matter. So at the top level, we're growing just a little bit ahead of the aggregate growth of our markets. But there are areas in Food & Refreshment, for example; in BPC, where we're not growing 60% value, we're only growing 60% volume. And I think that would triangulate back, David, to saying that in terms of locals winning, I think it's -- I think, Richard, I'm right in saying locals are winning private label broadly flat, although it's a little bit different in North America versus Europe. And that locals are winning from the multinationals, and we would be in that pack of multinationals. And it's all correlated to a business that's competitive. We're growing slightly ahead of the market in aggregate, but we know there's more that we can do, David.
Okay. Thank you. Thank you, everybody. We'll call a stop there. I know there's still 1 or 2 questions that people wanted to ask. We'll bring the call to a close. However, if you have further questions, please give the IR team a call and we'll be happy to take them as soon as we get back to our desks. Thanks, everybody, and have a good day.
Thanks, everyone. Thank you. Bye-bye.
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