Fast moving consumer goods goliath Unilever is doubling down on its growth plan following recent positive third-quarter results, leaders said at its investor’s event.
Unilever was ending 2024 in a much better position, after the rollout of a new strategy, launched plans to remove the ice cream business and a senior leadership revamp, CEO Hein Schumacher said.
Next steps would see the organisation focus on what Schumacher called “Our Growth Action Plan 2030″.
This would include doubling down on delivering 10-15 bold innovations at €100m each across Unilever’s 30 power brands and in its 24 core markets. These brands equated to 75% of turnover and the markets at over 80%.
Past innovation delivery hadn’t generated the best returns and “didn’t represent the strength of our brands“, he said. But the target of 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,” added Schumacher.
Unilever’s 2030 strategy
Its 2030 strategy would be a recommitment to doing fewer things, but better and with a greater impact. Unilever would also “scale strengths and replicate successes” across the business, making it a ”more performance-oriented company.”
Ice cream would be separated from the main business in 2025, allowing Unilever to focus on growing its four pillars – beauty & wellbeing, personal care, home care and foods – into more premium propositions, including through gained market share.
“India is the single biggest opportunity to Unilever in years, it’s always been a stronghold but it’s been a sharper focus recently with big growth,” said Schumacher.
Food brands, including Hellmann’s, would be targeted for growth and premiumisation across 24 core markets, but especially in India, said Unilever president for nutrition Heiko Schipper.
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
Unilever CFO, Fernando Fernandez
“54% of business is in emerging markets, with India, China, Mexico and Brazil the largest,” he said.
Opportunities to take that growth forward had been identified under a new Unilever Foods umbrella, which was more “focused and simplified,” said Schipper.
Three “global verticals” would be the focus of food’s future, including condiments, cooking aids and mini meals, he said.
“We’ll simplify where we play and double down on brand superiority with innovations, like within Hellmann’s and Knorr Mini Meals,” he continued.
Hellmann’s would be a “global brand” through country expansions, such as in India, where it would be built from scratch, said Schipper.
World domination for Hellmann’s
“Hellmann’s will grow through premiumisation through the squeezy format and flavours,” he continued. “Flavoured mayonnaise almost doubled revenue this year and is on track to become a €100m range.”
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.
Its catering and professional kitchen business, Unilever Food Solutions had also grown double digit and would exceed €3bn per year.
