Unilever may be looking at divesting some or all of its food brands as the company focuses on the health and beauty sectors, said CEO Alan Jope. The consumer goods giant confirmed it is making offers to buy personal care company GlaxoSmithKline’s consumer unit, with the latest bid worth £50 billion (about $68 billion). All bids have so far been rejected.
A document filed with the U.S. Securities and Exchange Commission said the company’s board concluded Unilever’s future strategic direction “lies in materially expanding its presence in health, beauty, and hygiene.”
Jope said that while the company’s food and refreshment business — which includes large brands such as Ben & Jerry’s, Breyers, Knorr and Hellmann’s — has done well during the pandemic, the division’s long-term growth has been below other areas of its portfolio.
Unilever has trimmed its food and refreshment portfolio in the recent past, selling its sizable tea business—which included Lipton and Tazo—to CVC Capital Partners for 4.5 billion euros ($5.1 billion) in November.
Unilever is ready to make a big change in its business, which raises the question for investors and industry watchers: Is one of the world’s biggest names in food and beverage preparing to completely exit?
The sale of Unilever’s tea business last year shows that anything is possible. Lipton is one of the world’s best known tea brands, and its sale demonstrated that the CPG company was interested in treading a new path. Unilever also may have shown that it was ready to make some big business moves when it completely unified its structure—historically split between the U.K. and the Netherlands—in late 2020. Bloomberg pointed out that the move makes divestitures easier.
On a global scale, Unilever’s Foods & Refreshment division represented about a third of its total operating profit and about 19.1 billion euros ($21.7 billion) in sales, according to its most recent annual report, which was published last March, prior to the tea divestment. According to a report focusing on the United States, the segment includes four of the company’s top ten brands here: Ben & Jerry’s, Breyers, Hellmann’s, and Knorr.