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FEATURE: Unilever's Focus on its 'Bigger' Food Brands


26 July 2013 - In recent history Unilever has been selling non-core brands to strengthen its overall foods portfolio.

Earlier this year, Unilever sold the Skippy peanut butter brand to Hormel Foods. And last year, it sold its North American frozen meals business to ConAgra.

The company is now reportedly seeking to sell its Wish-Bone salad dressings business and has been recently linked to the sale of Peperami pork sausage brand in the UK.

Providing an update on the plans yesterday, company CEO Paul Polman said that Unilever's food footprint is now more skewed towards emerging markets and it has disposed of many of its businesses around the peripheries. As a result, the company's food sales are now concentrated on fewer, bigger brands.

"Our Foods portfolio is stronger than it was", Polman commented.

Polman said that emerging markets are now close to 40% of Unilever's food sales, up from just 20% not so long ago. And, as a result of the divestiture of these non-strategic assets, nearly two thirds of Unilever's turnover is now generated by its EUR 4 billion food brands. 

Paul Polman

Commenting on these core brands, Polman said: "These are brands with strong equities and broad relevance. It's also probably now the most focused food portfolio of its kind, with leading positions globally. That, I believe, is particularly important when it comes to leveraging the R&D to bring our innovations to market across the countries and regions"

Polman went on to stress that it is important that Unilever remains acutely focused on cost efficiency as it is crucial that the firm's foods and refreshments business segments grow faster.

"In Refreshments, I am pleased to see the underlying improvements now coming through. The turnaround plan in tea is showing results behind the move to the more premium variance and the renewed support. In ice cream, the focus on return of assets is already bringing improved margins and sharper capital choices. For Foods, it is likely to be perhaps 12 months later than I frankly would have liked to see", he said.

"In spreads ... it will take time, but we have the technology, marketing skills, scale and now, also the organization to deliver", he added.

"We can also, as an organization, be faster and more agile. The key enabler to both is to simplify and streamline our business processes and to reduce complexity further", Unilever's CEO went on to say.

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