Unilever to retreat from woke agenda

Unilever has given the clearest hint yet that it will reverse its ‘woke’ agenda as the unveiling of a turnaround plan failed to convince investors.

Hein Schumacher, who took over from Alan Jope in July, said he would stop “pushing social justice messages” on brands.

He said brands taking a political stance could be an “unwelcome distraction.”

Some investors have urged the consumer goods giant to ditch virtual signaling and focus on the bottom line.

Jope put social purpose at the heart of the Hellmann’s mayonnaise maker’s strategy, promising to sell brands that “are unable to stand for anything more important than just making your hair shiny, your skin soft, your clothes whiter or your food tastier’.

Schumacher said a social purpose was critical to the marketing of some brands, but for others it was a “distraction,” adding: “Not every brand should have a social or environmental purpose. We don’t want to unnecessarily force that on brands.’

Last year, Unilever was criticized by investor Terry Smith for “ridiculous” virtue signaling on everything from sustainability to Knorr stock cubes. There will be a social media callback with a focus on growth, explains Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

But investors were disappointed. There were high expectations for Schumacher, but shares in the British company, whose brands include Dove soap and Magnum ice cream, fell 2.8 percent, or 113.5 pence, to 3,900 pence.

Schumacher’s strategy will focus on thirty ‘power’ brands that account for 70 percent of Unilever’s turnover. Think of basic products such as Dove, Vaseline and Ben & Jerry’s.

New direction: Hein Schumacher

But City’s response was muted, with analysts saying the update failed to ‘blow our socks off’. A stock dip yesterday resulted in a decline of 12 percent over the past six months. AJ Bell analyst Danni Hewson said: “It’s not enough to get the market excited, especially when combined with the mixed third quarter numbers.”

In its third quarter results, Unilever recorded a 5.2 percent increase in sales, boosted by price increases. But volumes fell 0.6 percent, while Europe took a hit of 10.7 percent.

Responding to City sceptics, Schumacher promised: ‘We can make a difference. It makes us aware of the things that need to change.’

Unilever’s first step is to sell shaving and grooming company Dollar Shave Club to American private equity giant Nexus. Although the news that he would succeed Alan Jope came as a surprise to those expecting a big name from the consumer world, Schumacher’s track record shows him to be ruthless.

At the Dutch dairy cooperative FrieslandCampina, he implemented a restructuring that involved asset sales, factory closures and job losses.