Agrifood: Unilever under pressure



The announcements did not drag. A few days after the arrival in its capital of the activist fund Trian Partners of Nelson Peltz, Unilever unveiled a restructuring of its activities, Tuesday, January 25. The British agri-food and hygiene products giant will cut 1,500 management positions worldwide, i.e. 1% of the workforce, and will organize itself into five major divisions: beauty and well-being, personal hygiene, housekeeping, food and ice cream.

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In 2018, Nelson Peltz got much the same from big competitor Procter & Gamble. ” The goal is to be more responsive to consumer trends “, argues Unilever, emphasizing that each entity “will be entirely responsible for its strategy, its growth”.

A portfolio of over 400 brands

The group seeks above all to reassure shareholders. Because despite a portfolio of more than 400 brands, the best known of which are Dove soaps, Skip and Omo detergents, Fabergé deodorants, Cif cleanser, Magnum and Ben & Jerry’s ice creams, Knorr soups and Maille mustard, sales growth is slipping and the title is falling when that of its rivals is progressing.

For now, the strategy of Alan Jope, in office for three years, does not seem very clear. In mid-January, despite three attempts and the promise of a check for nearly 60 billion euros, he was unable to take over the consumer health branch of GSK, the world leader in this segment, with including Advil pain relievers and Nicorette patches. In November, Unilever had succeeded, however, in selling its range of Lipton teas to the CVC fund, for 4.5 billion euros.

Investors ask to focus on returns

Once reorganized, the group should relaunch disposals and acquisitions, without it being known yet whether it will persist in its desire to refocus on health. In the meantime, investors are asking management to focus on improving sales and margins, rather than focusing on how the group is perceived. ” A company that feels it needs to define the mission of Hellmann’s Mayonnaise, a brand that’s been around since 1913, has clearly lost the compass,” says Terry Smith, one of the ten main shareholders of Unilever, in an open letter, which has just caused a stir across the Channel.

Since taking over the helm, Alan Jope has wanted to focus investment and marketing spend on brands that “communicate a strong environmental or social objective”. Its shareholders remind it today that profit also counts.

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