(Bloomberg) -- Unilever Plc said it will exit food brands with combined sales of more than €1 billion ($1 billion) as Chief Executive Officer Hein Schumacher focuses on the consumer goods company’s strongest performers.
The CEO last year launched a turnaround drive at the maker of Hellmann’s mayonnaise and Dove soap. In March of this year, he outlined plans to cut costs, including a headcount reduction of 7,500, and moved to split off the underperforming ice cream unit.
The future of Unilever’s food business has been in question ever since the company unified its structure in London in 2020. At the time, it said that if it were to list the business separately on the stock market, it would do so in Amsterdam.
As Unilever streamlines that division, which had total sales of about €13 billion last year, the company plans to seek growth from condiments, cooking aids and products for professional kitchens.
At an investor day in London on Friday, Schumacher also said he wants to expand the proportion of premium products in the portfolio — an industry strategy called “premiumization.” This comes as the sector struggles with shoppers’ spending constraints. Branded goods marketers have been under pressure from customers trading down to supermarkets’ own labels.
Price and Volume
Unilever also said the volume of products it sells will increase at least 2% annually following the separation of its ice cream business, helping it reach a previously set target of mid-single-digit sales growth.
Consumer goods makers have been trying to wean themselves off price-fueled revenue gains after a period of high inflation.
Unilever returned to quarterly volume growth in the final three months of 2023, for the first time since 2021. In the third quarter of this year, Unilever’s volumes rose 3.6%, helping it increase sales 4.5%.
Schumacher on Friday pledged to “double down” in India: “It perhaps represents our single biggest opportunity,” he said, adding that robust economic growth in India offers an opportunity for all of its units.
“We will pull all levers to make sure that we benefit from that growth,” Schumacher said.
Unilever said both the €800 million productivity program and the separation of the ice cream division, which includes the Ben & Jerry’s brand, are on track for completion by the end of next year, as planned.
Unilever shares rose 2% in London and they’re up 21% over the past 12 months.
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