Unilever unveils action plan to boost premiumisation, market share

By Joseph Ekeng

Unilever’s CEO, Hein Schumacher, has laid out an extensive Growth Action Plan aimed at revitalizing the company’s market share and restoring gross margins to pre-pandemic levels of approximately 44%. Emphasizing premiumization, impactful innovation, and cost savings as pivotal elements, Schumacher highlighted the strategy during a recent ‘fireside’ chat event hosted by Barclays.

”We’re focused on doing fewer things with greater impact,” Schumacher stated, underlining the plan’s unique approach involving real choices in market development and product superiority. As part of the initiative, approximately 20% of SKUs in Unilever’s European portfolio have been eliminated since Schumacher took the helm 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 explained.

To execute the Growth Action Plan effectively, Schumacher has implemented a management restructuring effective from January 1, with a keen focus on Unilever’s 30 power brands. Emphasizing the need for multi-year innovations, Schumacher stressed the importance of premiumization in developing categories and creating value for both customers and the company.

However, challenges persist within Unilever’s food components, particularly in nutrition and ice cream, which lag behind other segments. While not directly addressing the potential spin-off of the ice cream category, Schumacher acknowledged the need to manage the entire ice cream business more effectively due to increased competition from specialized players.

In addressing the evolving landscape within nutrition, Schumacher cited an example of streamlining Unilever’s tomato soup offerings from 261 to 100 recipes. He underscored the importance of simplifying the supply chain, procurement, and product offerings to drive business growth.

Despite a 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 achieved recognition as a World Economic Forum (WEF) lighthouse factory, becoming the company’s 7th WEF lighthouse. The WEF Global Lighthouse Network acknowledges factories that incorporate Fourth Industrial Revolution technologies (4IR) such as artificial intelligence and big data analysis to maximize efficiency, drive sustainable growth, upskill their workforce, and protect the environment.

Reginaldo Ecclissato, Unilever Chief Business Operations and Supply Chain Officer, commented, ”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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