Unilever, the world’s largest consumer products company by volume, is increasing its focus on growth following its recent strong third quarter results. This was announced at an investor event.
Hein Schumacher, Unilever’s CEO, said that the company would end 2024 much more positively after a revamp of its senior management, a launch of plans to eliminate the ice-cream business, and the implementation of a brand new strategic plan.
Schumacher’s “Our Growth Action Plan 2020” is the next step.
Unilever would have to double down and deliver 10-15 innovative products worth EUR100m across its 30 core brands, as well as in the 24 key markets. The brands represented 75% and the markets over 80% of Unilever’s total turnover.
He said that past innovation had not generated the highest returns, and did “not represent the strength” of the brands. The target is to deliver 10-15 bold innovations” would be double the output of that in 2021.
“Twelve of those platforms have been defined and they’re on track to reach €100m, but we may then need to quadruple the average size of innovation,” Add Schumacher to your list.
Hein Schumacher turbocharges his business strategy for greater growth
Unilever’s 2030 Strategy
The 2030 strategy is a commitment to do fewer, better things with greater impact. Unilever will also “scale up strengths and replicate success” throughout the company, transforming it into a “performance-oriented organization.”
Unilever will separate its ice cream business from their main business by 2025. This will allow them to concentrate on developing the four pillars of beauty and wellbeing, home care, personal care, and food, into premium offerings, as well as gaining market share.
Unilever’s biggest growth opportunity in recent years has been India. It’s always had a high market share, but recently the focus was more intense.
Heiko Schipper, Unilever’s president of nutrition, has said that food brands such as Hellmann’s would be targeted to grow and become premium in 24 core markets but particularly India.
Our food business will be further simplified. We believe that there are around EUR1bn in food revenues we can dispose of while protecting their value.
Unilever CFO, Fernando Fernandez
He said that 54% of his business was in emerging markets. India, China Mexico, and Brazil were the top four.
Schipper said that the new Unilever Foods banner, which is “more focused and simpler”, had identified opportunities to accelerate growth.
He said that the future of food would focus on three “global verticals”, including cooking aids, condiments and small meals.
He continued, “We will simplify our strategy and focus on brand excellence with innovative products like Hellmann’s Mini Meals and Knorr Mini Meals.”
Hellmann’s will be “a global brand” by expanding into new countries, like India where the company would start from scratch.
Hellmann’s dominates the world
Hellmann’s to be global leader brand through innovation, premiumisation and multiple layers (Unilever).
He continued, “Hellmann’s will grow by premiumising through the squeezy formats and flavours.” The sales of flavoured mayonnaise nearly doubled this year, and the range is expected to reach EUR100 million.”
Food delivered €13bn and accounted for 22% of Unilever’s turnover and a quarter of its profit.
Brands like Knorr were €5bn and Hellmann’s €3bn, accounting for 60% of the division’s turnover.
To maximise power food brands’ potential, a group of smaller or local brands worth a collective €1bn would be ejected from the business at various points in the next 12 to 24 months, said CFO Fernando Fernandez.
“Food should deliver more growth and bottom line than the industry average,” he said.
“We’ll further simplify our food business, we believe there is around more than €1bn of food revenue that we will dispose of in a value-protecting way,” Fernandez added.
Unilever Food Solutions, its catering and professional kitchen division had grown by double-digits and was expected to exceed EUR3bn annually.
