The company is now reconsidering its strategic approach of infusing "purpose" into each of its brands.
Unilever's CEO, Hein Schumacher, has revealed a strategic shift in the company's approach to infusing "purpose" into its brands. `While Unilever has long been associated with championing social and environmental causes in its products and campaigns, Schumacher now acknowledges that not all brands can seamlessly embrace this concept.
In a recent statement to investors, Schumacher, who assumed the role of CEO in July, put forward Unilever's intention to cease the forceful imposition of "purpose" across all its brands. He underscored the importance of purpose but emphasised a shift toward a clearer focus on sustainability and purpose.
“Our focus on purpose is laudable and it inspires many people to join and stay with Unilever. So we must never lose it, but I don't think we advance the cause of purpose by force fitting it across every brand. But we will not force fit this across the entire portfolio, for some brands it simply won’t be relevant and that’s okay,” Schumacher says.
While certain Unilever brands like Dove, Lifebuoy, and Knorr have effectively integrated purpose to drive growth, Schumacher believes that other brands may need to explore different avenues in the realms of social and environmental concerns to align with their unique brand proposition.
This strategic shift follows the criticisms from investors, particularly Terry Smith, one of Unilever's major shareholders. Smith had earlier accused the company of excessively emphasising sustainability in its products, even when such an approach may not be suitable for certain brands.
Smith’s comments came in after the then Unilever CEO Alan Jope in 2022, had stated that Hellmann’s Mayonnaise’s purpose was to fight food wastage. Smith had questioned the necessity of attributing a purpose to a mayonnaise brand.
“A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot. The Hellmann’s brand has existed since 1913, so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches).”
Unilever to prioritise top 30 brands
Schumacher also announced a transformation in Unilever's marketing strategy during the call. He says that rather than distributing investments across all of its brands, the company will prioritise marketing expenditure for its top 30 "power brands."
Brands, such as Magnum, Dove, and Hellmann's, contribute significantly to Unilever's revenue, accounting for 70% of it. The goal is to allocate more resources and capital to these brands, leading to a more focused, consistent, and digitally-driven marketing approach that is expected to enhance Unilever's growth profile.
Schumacher further states that all of Unilever's brands and businesses are expected to actively participate in delivering the company's four major sustainable priorities. However, the specific priorities may differ among various brands and business groups.
He states that too many projects are competing for in-market execution and brand support. Unilever will make branding more focused with deliberate allocation around bigger platforms, more consistent and more digital. This will in turn result in more effective marketing spends.