Unilever CEO Fernando Fernandez has outlined his strategic priorities in a recent chat with Barclays’ head of consumer staples, Warren Ackermann. Fernandez aims to create a “machine of demand creation” within Unilever, with a specific focus on strengthening the company’s presence in key markets such as the US and India.
One of the key aspects of Fernandez’s strategy is innovation, particularly in premium products. He emphasized the importance of accelerating the disposal of non-core assets in Europe while also focusing on the food component of Unilever’s portfolio.
Since taking over as CEO from Hein Schumacher, Fernandez has set immediate objectives such as completing the demerger of the ice-cream business and finalizing a productivity program by mid-year. He expressed his commitment to building a stronger geographical presence in the US and India, aiming to increase the premium portion of Unilever’s portfolio from 35% to 50%.
Fernandez highlighted the importance of portfolio resilience and smart pricing management to navigate economic volatility. While acknowledging the attractiveness of the food segment in Unilever’s portfolio, he also recognized the need to address non-core assets, including €1bn tied up in various food brands.
In terms of brand performance, Fernandez pointed out that Knorr and Hellmann’s are significant contributors to Unilever’s food business, with strong margins and cash generation. These brands play a crucial role in the company’s overall food strategy.
Fernandez also stressed the need for efficiency within the company, identifying opportunities to release funds that can be reinvested in brand growth and profitability. He hinted at potential bolt-on acquisitions in the US and India to enhance Unilever’s market position, ruling out any large-scale M&A activities.
Overall, Fernandez’s vision for Unilever revolves around creating a robust demand generation engine, strengthening the company’s presence in key markets, and optimizing its portfolio to drive sustainable growth and profitability. Through strategic initiatives and a focus on innovation, Fernandez aims to position Unilever as a leader in the consumer goods industry.
