Unilever, owner of Hellmann’s mayonnaise, is in the early stages of evaluating a spinoff of its food assets as it looks for ways to make its broad portfolio leaner, people with knowledge of the matter said.
The Anglo-Dutch consumer goods group is in talks with advisers as it considers future options, including a possible spin-off of part or all of its food division, these people said. The company is in the preliminary phase of analyzing possibilities such as listing the business separately as a whole or keeping some iconic brands and separating the rest, although it may not move forward with any operations before 2027, some of the sources added.
A transaction would likely value Unilever’s food business at tens of billions of dollars, said the people, who asked not to be identified because the information is private. The company has not yet made final decisions and may choose to maintain the current structure or follow other alternatives, according to them.
Unilever’s food assets could also attract interest from potential buyers, according to the sources. A Unilever spokesperson declined to comment.
Unilever shares have barely moved in London trading this year, giving the company a market value of around £107 billion (around R$700 billion). Unilever’s food brands include Colman’s condiments, Knorr broths, Maille dijon mustard and Namdong instant noodles, as well as Marmite savory paste, loved and hated in equal measure.
Under the command of CEO Fernando Fernandez, Unilever has been working to transform itself from a group focused on selling food into a company focused on beauty, personal care and well-being. Last year, it spun off its ice cream division into Magnum Ice Cream, maintaining a stake of almost 20%, which is expected to be sold over the next few years.
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Food sales
On other fronts, Unilever sold several food assets over the last decade, including its global margarine and vegetable spreads division — which had the brand I Can’t Believe It’s Not Butter! — and, more recently, snack brand Graze and plant-based meat maker The Vegetarian Butcher. The company still has €1 billion ($1.2 billion) to €1.5 billion worth of local food brands to dispose of.
Hellmann’s and Knorr account for 60% of Unilever’s food sales, and Fernandez said that this share will rise to 70% or 75% after the sale of local brands. The CEO did not rule out the possibility of getting rid of the entire food business when asked about the issue in December, although he highlighted that Unilever has been outperforming the rest of the sector.
Big food companies such as Unilever and its rival Nestlé SA have struggled to grow as budget-pressured consumers cut spending and switch to cheaper private labels. The popularization of GLP-1-based weight loss medications also poses a threat, as consumers tend to eat less overall or seek out products with lower calorie density.
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The beauty division has been a key growth engine for multinationals, with consumers younger and older spending on everything from multi-step skincare routines to fine fragrance collections. Fernandez has previously said he is focusing on brands such as Dove soap and Liquid IV supplement as part of Unilever’s turnaround plan.
Fernandez has been in the top job for about a year, after the fall of his predecessor, Hein Schumacher. Unilever’s board believed that Fernandez, the company’s former chief financial officer, would promote faster changes.
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