Unilever pins growth ambitions on India as premium push gathers pace

Unilever’s growth ambitions hinge significantly on India, with the country emerging as a key anchor market for the company’s medium-term volume growth plans, according to chief executive officer Fernando Fernandez.

Speaking in an interview with JP Morgan’s head of consumer staples, Celine Pannuti, Fernandez said India’s economic momentum and demographic scale position it as a major driver of Unilever’s global performance. India currently contributes 14% of the company’s revenue, compared with 21% from the US. Fernandez noted that if Unilever can deliver close to 4% volume growth in both markets, it would translate into around 1.6% growth at the company level, forming the backbone of its plan to achieve more than 2% volume growth overall.

He pointed to rising incomes and consumption beyond metros as a critical opportunity. Referring to a recent visit to central India, Fernandez highlighted the presence of roughly 500 million people in regions growing at close to 10% GDP. “Our brands are perfectly suited to take advantage of this wealth expansion,” he said, adding that the macro environment in India is becoming increasingly dynamic.

Beyond India, Fernandez said Unilever is currently outperforming competitors across most of its categories, driven by what the company calls its SASSY framework: Science, Aesthetics, Sensorials, Said by others, and Young-spirited brands. The framework underpins product development as well as the company’s approach to reach, engagement and validation.

Science-led performance, combined with strong design and sensory appeal, is increasingly being amplified through social-first marketing. Fernandez said Unilever now works with close to 300,000 influencers globally, with peer validation playing a central role in brand building. He cited Vaseline as an example of this approach, noting that the 155-year-old brand has delivered around 12% volume growth in recent years.

Premiumisation remains a central strategic focus for the company. Fernandez said he is “obsessed” with the opportunity, pointing to two structural shifts supporting higher-value consumption. The first is digitisation, which has significantly increased consumer awareness around ingredients and product efficacy, making shoppers more willing to pay for products that perform. The second is the changing structure of households, with a rise in one- and two-person homes that tend to spend more on self-indulgent categories.

This shift has also underpinned strong growth in Unilever’s wellbeing portfolio, which has delivered double-digit growth for five consecutive years. Fernandez highlighted acquisitions such as Liquid I.V. and Nutrafol as examples of how the company is scaling brands quickly. Liquid I.V., acquired in 2020 as a $120 million brand, is expected to reach around $1 billion in sales this year. Nutrafol, acquired in 2022 at $220 million, is also projected to approach the $1 billion mark.

In the US, Fernandez said Unilever has built one of the strongest growth footprints among large consumer goods companies. In the latest Advantage survey of 130 US retailers, Unilever ranked second overall, first in personal care, third in beauty and first in foods. He described the performance as unprecedented for the company, with brands such as Dove, Hellmann’s and its deodorants business gaining share across segments. Unilever has delivered more than 4% volume growth for five consecutive quarters in the market, supported by what Fernandez described as stronger-than-ever retailer partnerships.

Europe, meanwhile, is seeing growth driven largely by premium innovation. In home care, Unilever’s laundry products designed for short-cycle washes have enabled the company to move into higher price points. In personal care, expansion into categories such as whole-body deodorants is supporting value growth. Fernandez said the company is prioritising premium innovations that retailers value and consumers are prepared to pay for.

On profitability, Fernandez said Unilever is focused on sustained gross margin expansion, which it believes will place it in the top third of total shareholder return within the sector. The company is working across four levers: volume growth, improved category and channel mix, value-chain interventions in key inputs such as fragrances, and capital expenditure. Around 60% of Unilever’s capex is now being allocated to margin expansion initiatives, including a €1.3 billion investment in fragrances.

Reflecting on leadership and organisational change, Fernandez said his 37 years at Unilever have helped him drive clarity in a complex organisation. He noted that the major restructuring is largely complete, with the focus now shifting to improving brand quality and execution. “The heavy lifting of organisational change is behind us,” he said. “Now it’s about continually elevating brand quality and execution.”