UK – Unilever CEO Hein Schumacher has outlined his Growth Action Plan, emphasizing premiumization, impactful innovation, and cost savings as key elements to revive the company’s market share and restore gross margins to pre-pandemic levels of approximately 44%.
In a recent ‘fireside’ chat event hosted by Barclays, Schumacher addressed the plan’s unique focus on doing fewer things with greater impact, involving real choices in market development and product superiority.
As part of the strategy, Schumacher revealed that around 20% of SKUs in Unilever’s European portfolio have been eliminated since his tenure began on July 1.
“I want to take complexity out of the portfolio where we can. But here and there, where there is something really good, then we are keen to fill the gaps on the premium portfolio, and that’s what we are doing,” he stated.
To execute the Growth Action Plan, Schumacher has reorganized the management structure, effective from January 1, with a keen focus on Unilever’s 30 power brands.
He emphasized the need for multi-year innovations to develop categories and create value for both customers and the company, placing a particular emphasis on premiumisation.
However, challenges persist within Unilever’s food components, particularly in nutrition and ice cream, which lag behind other segments.
While Schumacher did not directly address the potential spin-off of the ice cream category, he acknowledged the need to manage the entire ice cream business more effectively, citing changes in market dynamics with increased competition from specialized ice cream players.
Schumacher pointed out the evolving landscape within nutrition, citing an example of streamlining Unilever’s tomato soup offerings from 261 to 100 recipes.
He emphasized the importance of simplifying the supply chain, procurement, and product offerings to drive business growth.
Acknowledging the drop in Unilever’s gross margin to 40%, compared to the pre-pandemic level of 44%, Schumacher identified the start of 2023 as an “inflection point” in the restoration process.
He outlined a moderate margin expansion plan for 2025-26, emphasizing the need for further improvement in gross margin by reducing costs alongside top-line growth strategies.
Meanwhile, Unilever’s India Sonepat site has been recognized as World Economic Forum (WEF) lighthouse factory becoming the company’s 7th WEF lighthouse.
The WEF Global Lighthouse Network recognises factories that incorporate Fourth Industrial Revolution technologies (4IR) such as artificial intelligence and big data analysis to maximise efficiency and drive sustainable growth, while upskilling their workforce and protecting the environment.
Reginaldo Ecclissato, Unilever Chief Business Operations and Supply Chain Officer said, “We are building factories of the future by integrating advanced digital technologies across our end-to-end operations, while sustainably reducing our environmental footprint.”
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