Peter Schumacher, aged 52, the Dutch CEO of Unilever, stated that he will not hesitate to rationalize its workforce which comprises of 127,000 employees. Recent criticism focused on the company’s portfolio expansion to around 400 brands under the leadership of ex-CEO Alan Jope, arguing it detracts from focusing on top-performing brands. Unilever’s focus on sustainability was also called into question, with various investors, such as Fundsmith’s Terry Smith, criticizing the company’s obsession with sustainability over performance. Nelson Peltz, who acquired a stake in Unilever via Trian Partners and subsequently joined the board, aligns with Unilever’s growth strategy and the category-based reorganization of its business lines. Unilever executed a 1.5 billion euro share buyback following an increase in volume sales for the first time in 10 quarters. The nutrition and ice cream units were the only divisions to report a decrease in sales volumes in the fourth quarter.
Transition at the Helm of Unilever
Schumacher assumed the role of Unilever CEO in July 2023, following the departure of his predecessor Alan Jope a year prior. He stated that Peltz gained his seat on the board due to dissatisfaction with the company’s performance, identifying an opportunity to acquire shares at a price he deemed had potential for growth.
Schumacher explained that the company’s growth strategy, which Peltz agrees with, involves enhanced investments in their top 30 brands, representing over 70% of sales. It also focuses on supporting the innovation pipeline and improving operating discipline. He highlighted Peltz’s appreciation for Unilever’s business model, which organizes business lines by category rather than by geographic region, similar to the model Trian influenced at rival P&G.
Consideration of Spin Off
Some investors have urged Unilever to consider spinning out its food business, which includes popular brands like Marmite spreads and Knorr stock cubes. While Schumacher has not ruled out such a move, he’s emphasized that the primary focus for now is implementing their growth plan.
Appointment and Priorities
Schumacher’s appointment at Unilever’s helm was welcomed by Peltz, an activist investor known for overhauling consumer goods companies, having worked with him during the HJ Heinz-Kraft Foods merger. Top priorities for Schumacher include fostering a culture of performance, something he warned could compel some members of the workforce to opt for other opportunities.
During his tenure, Schumacher has made significant changes to Unilever’s leadership team, with key appointments, including Esi Eggleston Bracey as the head of growth and marketing officer. He wants Bracey to formulate a clear two-to-three-year market development plan for Unilever’s top brands.
Schumacher professed his commitment to addressing these challenges, remarking, “I’m now in the mode of ‘okay, I heard you and this is what we’re doing about it.” Ultimately, the Dutch CEO’s legacy will be evaluated based on his tenure’s performance.