Unilever CEO Outlines Strategic Focus on Beauty and Well-being

What's Happening?

Unilever is intensifying its focus on beauty, well-being, and personal care as key growth areas. CEO Fernando Fernandez announced at the Barclays Global Consumer Staples Conference that the company aims for two-thirds of its sales to come from these sectors in the medium term. Currently, beauty and personal care account for 51% of sales. Unilever plans to achieve this through acquisitions and organic growth, with a focus on its 30 largest brands, which generate over 70% of turnover. The company is also prioritizing the U.S. and India for investment and growth, while emphasizing premiumization and e-commerce acceleration. Unilever's beauty and well-being division, valued at 13.2 billion euros, includes brands like Dove and Vaseline.

Why It's Important?

Unilever's strategic shift towards beauty and well-being reflects broader industry trends prioritizing self-care and experiential products. This focus could significantly impact the U.S. market, where Unilever plans to invest heavily. The emphasis on premium segments and digital commerce aligns with consumer preferences for high-quality, convenient products. By concentrating on its largest brands and key markets, Unilever aims to drive consistent volume growth and expand its gross margins. This strategy may lead to increased competition in the beauty and personal care sectors, affecting other major players in the industry.

What's Next?

Unilever plans to review its top 200 management roles as part of operational changes announced in July 2024. The company aims to cut 7,500 office-based roles globally, including a third of all office roles in Europe by the end of 2025. Unilever's focus on the U.S. and India suggests potential acquisitions and partnerships in these regions. The company is also investing in its fragrance capabilities, with the opening of its first U.S. fragrance lab in Connecticut. These moves indicate a continued push towards innovation and market expansion in beauty and well-being.