Unilever Warns Three Units: ‘Perform ... or Else!’

01 August 2003

Anglo-Dutch consumer products titan Unilever on Wednesday issued an unprecedented public warning to three individual businesses within its two global divisions, Home & Personal Care and Foods.

The message to the offending trio is unequivocal: improve performance or face “alternative measures”. These could include sale of the companies concerned, identified only as being within the ‘household care, premium perfumes and frozen foods’ groups.

These businesses, Unilever co-chairman Niall Fitzgerald told analysts, had failed to hit the group’s benchmark of 5% annual revenue growth. “[They] are not performing up to standard. If they don’t step up and meet our targets we will look for alternative solutions. But these three businesses should be well capable of meeting our standards.”

The assembled haruspices also heard from financial director Rudy Markham that the three underperformers had curbed sales growth of Unilever’s four hundred leading brands by 0.6% during the calendar year. But he cited certain notable exceptions among the accused – Britain’s Birds Eye and Italy’s Findus, both of which continue to show robust growth.

Unilever is now in the final straight of its five-year race to slim its former 1,600-strong brand portfolio to 400 core lines, between them accounting for over ninety per cent of sales. But the plan stuttered last month with the announcement that current trading conditions have slashed the group's 2003 core brand growth target from 5%-6% to just 4% [WAMN: 24-Jun-03].

• A convenient scapegoat for Unilever’s flagging units – or at least at its US Slim.Fast business – is the late Dr Robert Atkins whose controversial low-carbohydrate/high-fat diet has posthumously hit craze proportions and is said to be impacting adversely on the mainstream slimming industry.

FitzGerald played down the impact, implying that the currently modish Atkins diet would be short-lived. Slim.Fast’s products, he said, were widely endorsed by the medical and nutritional professions: “I don't think the same degree of professional support applies to the Atkins diet,” he opined.

Data sourced from: Times Online (UK) and Financial Times; additional content by WARC staff