Unilever’s new chief executive has said it will hire more social media influencers to market its products because consumers are “suspicious” of corporate branding, as he set out his vision for the Marmite and Magnum maker.
“Messages of brands coming from corporations are suspicious messages,” said Fernando Fernandez, in his first public comments since taking over from ousted predecessor Hein Schumacher at the beginning of the month. “Creating marketing activity systems in which others can speak for your brand at scale is very important.”
Speaking to Barclays analyst Warren Ackerman in a “fireside chat” uploaded by the company last week, Fernandez set out his priorities, which included focusing resources in the company’s largest markets — the US and India — and speeding up the sale of underperforming food brands.
He said Unilever was also switching to a social media-first advertising model, increasing its investment on such platforms from 30 to 50 per cent of its total advertising spend. The company has increased its overall marketing spend from 13 per cent of turnover in 2022 to 15.5 per cent in 2024.
An Argentine who has worked at Unilever for almost four decades, Fernandez was appointed to replace Schumacher last month after the board lost patience with the pace of his turnaround plan for the London-listed group.
The company, which sells everything from washing detergent to deodorant, pot noodles and high end skin care products, is in the midst of a restructuring plan which includes cutting 7,500 jobs and separating out its ice-cream business.
In the past Unilever has attracted the ire of investors such as activist Nelson Peltz and UK fund manager Terry Smith for overemphasising brand “purpose”.
Its marketing approach has typically associated its products with wider purposes, such as Hellman’s mayonnaise tackling food waste or Dove soap denouncing toxic beauty standards. However the tactic has lost traction as consumers have increasingly turned to online influencers instead of corporations for recommendations.
“There are 19,000 zip codes in India. There are 5,764 municipalities in Brazil. I want one influencer in each of them,” Fernandez said. “That’s a significant change. It requires a machine of content creation, very different to the one we had in the past . . . ”
Fernandez said the company was sticking to his predecessor’s plan to only carry out bolt-on acquisitions and that he would accelerate the pace of disposals of smaller regional food brands.
“Every brand in our portfolio, every category in our portfolio has to earn the right to belong in our portfolio,” Fernandez said, adding, “time will say what we do with our portfolio in the long run but that’s the position at this stage.”
Two top-15 Unilever shareholders told the Financial Times following Fernandez’s appointment that the food business did not fit with the rest of the company’s portfolio.
While Fernandez did not rule out a separation of the entire food portfolio, he said the divison’s two leading brands — Knorr and Hellmann’s, which make up 60 per cent of the business — were accretive in margin and cash generation.
“It’s a very attractive business, it gives us a lot of flexibility. And we are committed to grow that business. That’s what I can say about food now,” he said.
Some investors have also questioned why Unilever has chosen to list its ice-cream business rather than sell it or form a joint venture that would return cash to shareholders.
Fernandez said he believed the demerger and listing was “still the most logical outcome” but that he had a fiduciary duty to analyse other options. “It has to be a really credible option to really ensure we don’t follow this path.”