Unilever has been on a soul-searching mission for over a year as it streamlines its business to focus on its power brands, slashes jobs, and spins off units.
To trim the fat further, the London-listed consumer giant that makes Magnum ice cream and Dove soap is planning to sell off food brands worth €1 billion in cumulative annual sales. The food division brought in €13.2 billion in turnover last year.
Unilever CEO Hein Schumacher wants to be more deliberate with the company’s "rather eclectic portfolio of food brands" and focus on sauces, condiments, and more, he told Dutch newspaper Het Financieele Dagblad in an interview published Monday.
Selloffs could include Dutch brands like Unox and Conimex, Reuters reported, but Schumacher declined to confirm which brands were being reconsidered.
Unilever is powering through a strategic overhaul, but that doesn’t mean every small brand will face the axe.
"We are not conducting a fire sale. There will always be brands that are not a perfect strategic fit, but that will remain part of Unilever," Schumacher said.
The chief, who took on his role last July, signaled last month that he envisions “fewer, bigger, better” brands.
Unilever declined to comment further when contacted by Fortune.
The FTSE 100 company, home to over 400 brands, announced a major turnaround plan last October to recapture market share from rivals and boost its business following the pandemic-time slump. It planned to double down on its top 30 brands, which comprise roughly three-quarters of its revenue, while shedding or scaling down other parts of its business.
Earlier this year, Unilever said it would shed 7,500 jobs globally and spin off its entire ice cream division, including Magnum and Ben & Jerry’s, citing a “very different operating model” as the reason. Ultimately, the strategy aims to improve the group’s performance amid shareholder pressure.
Unilever has been mulling a separate listing for the lucrative unit along with other avenues. It won’t be the group’s first rodeo with selling off individual parts of its business, as it already did so with its spreads and tea segments.
So far, the company’s turnaround efforts seem to have worked. This year it has beaten analyst expectations in quarterly earnings, some of which came from pricing increases and some from volume. After initial hesitation, investors have warmed up to Schumacher’s growth plan.
Unilever’s shares are up 23% year to date.
Unilever has performed better than its rival Nestlé in recent years, as the latter struggles to shake off the impact of weak consumer demand.
Last month, the Swiss giant said it would focus on its “billionaire brands,” much as Unilever focuses on its top-performing brands, as part of a new strategy underscoring a “less is more” approach under CEO Laurent Freixe.
Since Unilever decided to keep a laser-sharp focus on its top brands, it has managed to drive growth by expanding volumes more than increasing prices. Nestlé will now face a similar challenge as it overhauls its own business.
