IHG, Unilever sign deal for bathroom products: Good time to buy stocks?

Highlights

• IHG Hotels and Resorts has signed a deal with British FMCG major Unilever for full-sized bathroom products.
• The Holiday Inn owner will replace miniature products with full-sized ones to minimise single-use plastics in over 4,000 hotels.

Plastic pollution has become a major concern across the world. Companies have been trying new innovations to switch to more environmental-friendly ways to carry out their day-to-day activities. With a similar aim in sight, IHG Hotels & Resorts (LON: IHG), a London-listed company that operates several hotel chains in multiple countries, has joined hands with British consumer goods manufacturer Unilever (LON: ULVR) for the supply of full-sized bathroom products like hand wash, body wash, shampoos, conditioners, and other products.

In a statement, IHG Hotels & Resorts announced that it would replace the bathroom miniatures with bulk amenities in over 4,000 of its hotels. These bulk amenities are basically larger bottles or dispensers with a capacity of at least 250ml. They will not be replaced after each guest's stay, the company said.

The deal is a part of IHG's 2019 commitment to removing bathroom miniatures from all its hotels and replacing them with bigger-sized amenities. The company aims to eliminate single-use items throughout the guest stay by 2030, the statement read.

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Details of the deal

Under the deal, Unilever's largest brand Dove will supply full-sized bathroom products, including shampoo, body wash, hand wash, conditioner, and body lotion, to IHG's mainstream brands like IHG Essentials and Suites Collection hotels. These chains account for about 80% of the company's portfolio.

The switch is expected to save a minimum of 850 tonnes of plastic annually in the company's Americas region alone, it said.

Last year, IHG made a similar announcement for its InterContinental Hotels & Resorts properties when it joined hands with European luxury brand Byredo for full-sized products.

Share price performance of IHG hotels

Following the announcement, the share price of the hospitality firm moved slightly upwards. As of 12:31 pm GMT+1 on Monday, the shares were trading at GBX 4,293.00, up by 0.98%. The company is listed on the blue-chip FTSE 100 index and holds a market cap of £7,824.37 million. Over the past one year, the share value has depreciated by over 15%, while the year-to-date returns stand at -10.33%.

Share price performance of Unilever

Unilever is among the world's biggest fast-moving consumer goods (FMCG) companies and is also listed on the FTSE 100 index. Among Unilever's major brands are Dove, Sunsilk, Axe, Ben & Jerry's, etc. The company posted a 7.3% increase in underlying sales and an 11.8% increase in turnover in Q1 2022, in contrast with Q1 2021.

Shares of Unilever were trading at GBX 3,585.50, down by 0.21% as of 12:35 pm GMT+1 on 20 June 2022, with a market cap of £91,682.96 million. The shares haven't performed particularly well in the past one year and have fallen by almost 17%. The year-to-date return currently stands at -9.23%.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.