Dive Brief:
- Unilever Plc saw a 1.4% increase in sales for the food unit in the first six months of the year.
- Starting July 1, Unilever made baking, cooking, and spreads a standalone unit, a move that Unilever CEO Paul Polman said during a conference call will "bring a lot more focus to our strategy of repositioning that part of the business to a more attractive segment."
- The company also strengthened its R&D efforts "by embedding it within the categories" to improve effectiveness, Polman said on the call. "This has allowed each category to allocate resources across discover, design, and deploy to meet their specific needs."
Dive Insight:
Some investors see putting spreads in a standalone unit as a potential hint of divestiture to come. However, "Unilever has said it has no immediate plans to sell spreads but said the new structure will help it increase the speed with which it rolls out innovations and will help it cut costs," The Wall Street Journal reported.
Unilever's refreshment unit, which includes its ice cream brands like Ben & Jerry's and recently acquired Talenti, increased 2.7% thanks to the strength of its premium brands. Polman said on the conference call that the company's priorities are to "step up cash flow in ice cream and move to more value-added premium segments."
Unilever is one of many food industry companies turning to R&D as a strategy to combat tumbling sales and profits as consumers venture away from the product selections that many of these larger companies offer, particularly processed foods. Diamond Foods recently opened up an innovation center, and Nestle opened its own global frozen foods R&D center earlier this week.