Unilever Chief Executive Officer Fernando Fernandez recently sat down with Celine Pannuti, JP Morgan’s Head of Consumer Staples, for an in-depth discussion on the company’s performance, strategic priorities, and long-term growth ambitions. Drawing on nearly four decades at Unilever, Fernandez offered a candid look at how the global consumer goods giant is navigating organisational change, accelerating premiumisation, and capitalising on growth opportunities across key markets such as the United States, Europe, and India.
The conversation highlighted a company that has largely completed a major transformation and is now focused on execution, brand elevation, and sustainable value creation.
Experience as a Catalyst for Change
Fernandez opened by reflecting on how his 37 years at Unilever provide a unique advantage when driving change within a complex, multinational organisation. According to him, clarity and alignment are essential when leading a business of Unilever’s scale.
He emphasised that in every meeting, regardless of function or geography, he reinforces a simple set of priorities: volume growth, positive mix, consistent gross margin expansion, and profit growth in hard currency. While the repetition may seem basic, Fernandez stressed that alignment around these fundamentals is critical to ensuring the organisation moves in the same direction.
With the most intensive phase of organisational restructuring now complete, Fernandez said the company has shifted its focus. The emphasis is no longer on structural change, but on continually improving brand quality, sharpening execution, and ensuring that Unilever’s products outperform competitors on shelves and online.
Outperformance Across Categories
Unilever’s recent performance suggests that this strategy is paying off. Fernandez noted that the company is now outperforming in almost every category in which it competes. A key driver of this success is Unilever’s proprietary SASSY framework—an approach that guides product development, marketing, and consumer engagement.
SASSY stands for Science, Aesthetics, Sensorials, Said by others, and Young-spirited brands. Science ensures superior product functionality, while aesthetics and sensorial elements help drive consumer preference. The “Said by others” component reflects Unilever’s increasing reliance on social validation and peer recommendation, particularly through influencer-driven marketing.
Fernandez highlighted the company’s “social-first” marketing revolution, noting that Unilever now works with close to 300,000 influencers globally. This vast network allows brands to be validated authentically by consumers rather than relying solely on traditional advertising.
One standout example is Vaseline. Despite being a 155-year-old brand, Vaseline has delivered volume growth of approximately 12% in recent years. Fernandez described this as proof that heritage brands can be revitalised when innovation, science, and modern marketing are effectively combined.
A Relentless Focus on Premiumisation
Fernandez made it clear that premiumisation is at the heart of Unilever’s growth strategy. He identified two major structural shifts supporting this trend. The first is digitisation, which has dramatically increased consumer awareness and knowledge. Today’s consumers want to understand what goes into the products they buy and how those products perform. When they see clear benefits backed by science, they are increasingly willing to pay more.
The second shift is demographic. Household structures are changing, with more single-person and two-person households emerging globally. These consumers tend to spend more on personal care, wellbeing, and small indulgences, creating fertile ground for premium products.
According to Fernandez, these dynamics are reshaping consumer behaviour and creating sustained opportunities for Unilever to trade consumers up across multiple categories.
Wellbeing as a High-Growth Engine
One of the most exciting growth areas for Unilever is wellbeing, a segment that has delivered double-digit growth for five consecutive years. Fernandez described wellbeing as an attractive space because of its scalability and strong consumer demand.
He pointed to two acquisitions as clear examples of how Unilever can rapidly scale brands in this space. Liquid I.V., acquired in 2020, was a $120 million brand at the time. This year, it is expected to reach approximately $1 billion in sales. Similarly, Nutrafol, acquired in 2022 for $220 million, is also on track to approach $1 billion in annual revenue.
These successes underscore Unilever’s ability to identify high-potential brands, provide them with global infrastructure and marketing expertise, and accelerate their growth dramatically.
Building a Best-in-Class U.S. Footprint
Fernandez also highlighted Unilever’s strengthening position in the United States, describing it as one of the company’s most successful growth footprints globally. In the latest Advantage survey—where 130 leading U.S. retailers rank their suppliers—Unilever achieved unprecedented results.
The company ranked second overall, first in Personal Care, third in Beauty, and first in Foods. Fernandez described these rankings as historic for Unilever and a testament to the strength of its retailer partnerships.
Several brands are contributing to this momentum. Dove is experiencing exceptional growth, Hellmann’s continues to perform strongly, and Unilever’s deodorant portfolio is gaining market share across every segment. The company has delivered five consecutive quarters of volume growth exceeding 4%, reinforcing confidence in its U.S. strategy.
Premium Innovation Driving European Performance
In Europe, Unilever’s performance is being driven primarily by premium innovation. Fernandez highlighted Home Care and Personal Care as two standout categories.
In Home Care, innovations in laundry—particularly products designed for short-cycle washes—have allowed Unilever to move into higher price points while meeting evolving consumer needs. In Personal Care, the expansion of whole-body deodorants has opened new premium segments and increased consumer engagement.
Fernandez said the company is deliberately increasing investment in premium innovations that retailers value and consumers are willing to pay for, reinforcing Unilever’s position as a category leader rather than a price follower.
Unlocking Massive Potential in India
Turning to emerging markets, Fernandez described India as one of Unilever’s most significant long-term growth opportunities. He expressed strong confidence in the country’s economic trajectory, pointing to GDP growth of around 10% in parts of central India and a rapidly expanding middle class.
With approximately 500 million people in this region alone, Fernandez believes Unilever’s brand portfolio is ideally positioned to benefit from rising incomes and increased consumption. India currently accounts for 14% of Unilever’s revenue, compared to 21% from the United States.
Fernandez explained that delivering close to 4% volume growth in both India and the U.S. would generate approximately 1.6% growth at the company level, forming the backbone of Unilever’s ambition to achieve more than 2% volume growth overall.
Margin Expansion and Shareholder Returns
Finally, Fernandez addressed Unilever’s approach to gross margin expansion and shareholder value creation. He outlined four key levers driving margin improvement. The first is volume growth, which naturally enhances operating leverage once growth exceeds 2%. The second is optimising category, segment, and channel mix.
The third lever involves targeted interventions in the value chain, including a €1.3 billion investment in fragrances. The fourth is capital allocation, with nearly 60% of Unilever’s capital expenditure directed toward margin expansion initiatives.
Fernandez concluded that these actions should deliver consistent gross margin expansion year after year. In turn, this financial discipline is expected to position Unilever in the top third of total shareholder return within the sector, reinforcing the company’s commitment to long-term, sustainable value creation.
Source Link:https://www.unilever.com/
