Fresh focus
Hein Schumacher, Unilever’s new chief executive, did not mince his words at the company’s third-quarter results last week. “The quality of our growth, productivity and returns have all underdelivered,” he said. He also blasted the company’s promotion of ethical issues via its brands, which range from Dove soap to Ben & Jerry’s ice cream, saying it could be “an unwelcome distraction”.
Schumacher, 52, who took over from Alan Jope, 59, in July, said that Unilever had raised prices by nearly 6 per cent while turnover had fallen by 4 per cent. To arrest the company’s sluggish performance, he has hatched a shake-up of its sprawling portfolio, saying it would now concentrate on the 30 brands that make up 70 per cent of sales. Critics, however, have heard it all before. For years, Unilever has been selling off bits of its portfolio to simplify its structure. So which brands have been lost in its never-ending quest to get itself back on the front foot?
Shaving deal draws blood
Schumacher also called time on perhaps Unilever’s biggest bet of the past decade — Dollar Shave Club. In 2016, it stunned the industry with a $1 billion swoop on the company, then led by Michael Dubin, which delivers razors and shaving gear by post for a monthly fee. It was convinced that subscription services would be the future. Then chief executive Paul Polman saw it as an opportunity to dislodge Gillette, owned by US rival Procter & Gamble, from the top of the grooming market. But last week, Unilever said it was selling Dollar Shave Club to private equity giant Nexus Capital for an undisclosed sum. It will retain a 35 per cent stake.
Last year, Unilever admitted of its acquisition: “The performance ... has not met our expectations.” Many direct-to-consumer companies have been struggling to sell their products at scale.
Advertisement
Axe swings again
Before Schumacher started swinging the axe, Jope had a go. In 2021, he unveiled plans to sell Unilever’s tea business, which it had rebranded under the made-up name “ekaterra”. The company, which owns the likes of Lipton and PG Tips was sold to CVC Capital Partners, the private equity firm, for €4.5 billion.
It was the end of a long marriage: Unilever had bought Lipton in 1972 and struck deals with Pepsi to sell its iced tea brand in a joint venture in the 1990s, which it still retains. The year before it was sold, the business generated about €2 billion in sales but it had hampered Unilever’s growth as consumers started drinking more coffee and other herbal drinks. Under its new boss, Nathalie Roos, 58, appointed last year, the company has switched to calling itself Liptons.
Thinly spread
It was the end of an era for Unilever in 2017 when it sold its spreads business to private equity giant KKR for £6 billion. The spreads company owns the likes of Flora — sponsor of the London Marathon until 2009 — and I Can’t Believe It’s Not Butter. Its origins date back to the very beginning of Unilever, which was formed through the 1929 merger of the Dutch food business Margarine Unie and the UK’s Lever Brothers.
By the time it was sold, the spreads business was generating €3 billion in annual revenues, but it suffered as consumers moved towards natural alternatives, such as butter. KKR won a bidding war that involved private equity rivals Apollo and CVC. Unilever had decided to streamline its portfolio and get rid of the spreads business after it was targeted by a £115 billion takeover bid from Kraft Heinz. The approach shook management into taking bolder action to boost returns for investors.
Slim pickings
In 2000, Unilever decided to jump on the diet-food bandwagon and paid $2.3 billion for Slimfast, which makes shakes, snacks and foods for weight loss. The brand struggled to make money and Unilever was forced to write down €650 million of its value in 2004. Soon it had become a dead weight for Unilever, which was trying to move away from food and towards its personal care products. It sold its pasta sauce brands, Ragú and Bertolli, in 2014.
Advertisement
Slimfast was sold, also in 2014, for an undisclosed amount to the Texas-based private equity firm Kainos Capital. It did not stay there for long: in 2018, Slimfast changed hands again when it was sold for £265 million to Glanbia, an Irish nutrition group. While its valuation may have fallen it still attracts celebrity fans: it is currently being promoted by the glamour model Kelly Brook and the rapper Big Narstie.