Unilever, a brand powerhouse that has culled big brands from its portfolio on many occasions, is no stranger to making big cutbacks.
Even less surprising is the fact that CEO Hein Schmacher was open about his plan to streamline the company by focusing on just 30 “power brands”.
It is less surprising than the plans to split the ice-cream business off from the main company. The intention was to sell the division if at all possible. However, the business will remain under the same ownership and not be listed separately.
Unilever has been performing well since Schumacher took over the reins. In just a little more than a year, he’s already produced positive results for third quarter, including volume increases.
He wants (and has to) have more green in the balance sheet, so he is going after food brands who don’t deliver the same revenue volume as Knorr or Hellmann’s.
Unilever is planning to discontinue which food brands next.
Sky News reported that the Vegetarian Butcher brand is being sold six years after it was purchased by the Blue Chip.
Unilever did not make any early announcements about a possible sale, but it had approached a number of buyers to gauge interest in the brand.
What is the message about Unilever’s faith in the meat-alternative plant-based sector? It doesn’t matter because Unilever’s focus is not on categories, but rather their hero brands, and the 24 core markets. VB is far from A-lister here despite positive sales in 55 different countries.
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Schumacher is determined to develop 10-15 new innovations within his 30 powerful brands, each of which can generate revenue at least equaling EUR100m.
Unilever’s four-tiered strategy includes food as a major component of its revenue. The company generated EUR13bn in revenue and quarter of profits.
The division’s sales are 60% accounted for by brands like Knorr and Hellmann’s, which contribute EUR5bn and EUR3bn each.
The Flavour NPD at Hellmann’s has almost doubled its revenue in the past year, and it is expected to become one of Schumacher’s EUR 100m golden innovation streams.
What is the focus of Knorr, Hellmann’s Unilever on food?
Heiko Schipper, the division’s head of investor relations last week, only mentioned Knorr or Hellmann’s. What about the other brands? And what iconic names could we ditch along with the Vegan Butcher, because they are all there in the list of names mentioned by Heiko Schipper in the investor update last week?
Food strategy focuses on three global verticals: condiments, kitchen aids, and mini-meals. The global portfolio of food and nutrition includes over 50 brands, excluding ice cream.
Tortex, Horlicks and Unox are all household names, as well as Graze and Pot Noodle. Others are only known locally.
Unilever would be a good choice for an outsider to wager on. They are known by many brands, but only in a small number of markets. The Vegan Butcher, however, is a fairly popular brand in more than 50 countries, and has a hefty reputation. This makes it a poor bet.
If a brand doesn’t fall into one of the three global verticals, are they out?
It is not clear what the disposal strategy will be. Reuters reported that Unilever was looking to get rid of Dutch food brand Unox soups, which fit within the mini meal stream.
What do you think about Bovril, or even Graze to mention two brands which don’t seem to fit in any core stream?
In the next two-year period, only a few Unilever brands will be safe. This is the only thing that’s certain.
