Unilever turns to former Heinz exec to steer new course
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LONDON, Jan 30 (Reuters) – Incoming Unilever chief executive Hein Schumacher is getting seasick, according to his former boss at food group Heinz, but that never stopped him from joining executive cruises and sticking it out.
“Every year I brought nine of our most promising drivers to Florida – just me and them, not their bosses. One year we were on a catamaran in Naples Bay and Hein started to turn green,” said Bill Johnson, former Heinz- chief, told Reuters in an interview. “The water was only four feet deep and 30 feet from shore and he was hanging over the side of the boat.”
“But even though he knew he was going to be miserable, he kept going. He was willing to go anywhere and work any hours. Just the most adaptable person I’ve ever worked for.”
Schumacher, 51, is likely to need all his determination – as well as the experience he gained in food at Heinz and in retail at Dutch grocer Ahold – when he takes the helm at Unilever from Alan Jope in July.
The Dove soap for Hellmann’s mayonnaise giant must revive its underperforming food business while also managing difficult price negotiations with retailers feeling the pinch of inflationary pressures and a cost-of-living crisis.
Encouragingly for Schumacher, who worked as a finance manager at Unilever more than 20 years ago before heading to Ahold, he was warmly welcomed by activist investor and Unilever board member Nelson Peltz – who has a long record of shaking up consumer goods companies, including Heinz.
“I first met Hein when I served as a director at the HJ Heinz Company from 2006 to 2013 and was impressed by his leadership skills and business acumen,” said Peltz.
“I was delighted to hear that he was among the top candidates to become the next CEO of Unilever.”
Johnson told Reuters that Peltz and Schumacher “get along pretty well” and that Peltz reached out to Johnson last year, around the time Schumacher joined Unilever’s board.
“Hein gets to the heart of issues very quickly – which is like Nelson. They will get along very well, I have no doubt. Nelson respects ability, honesty, objectivity and results,” Johnson said.
British businessman Allan Leighton, who also worked with Schumacher, described him as “very calm, sure, clear and a good listener.”
“He’s ideal for Unilever,” said Leighton, a former chief executive of British grocer Asda who has served on the boards of several retailers and consumer companies.
Reuters Graphics FOOD SPIN-OFF?
One of the world’s biggest consumer companies with more than 400 brands ranging from detergent to ice cream, Unilever has been trying to win back investor confidence after years of its stock underperforming rivals, and after a failed bid to buy GSK’s consumer health business. a year ago
Analysts said Schumacher’s appointment signaled that Unilever would not for the time being spin off its food business, which makes Colman’s spices and Knorr stock cubes, given his experience at Heinz as well as dairy firm FrieslandCampina.
“Why hire a food manager if you plan to sell the food business?” Bernstein’s Bruno Monteyne said. “The sale of the food business will always be on the cards, but I doubt it is top priority in the short term.”
The food business, worth 20 billion euros ($22 billion) according to Unilever’s most recent annual report, has for years grown at a slower pace than other divisions and has lower margins than beauty and personal care.
In 2021, the food unit’s operating profit margin was 14.7% compared to 20.4% in beauty and personal care. Historically, food sales have grown 1-3% versus 3-5% in personal care, said Tineke Frikee, a fund manager at Waverton Asset Management.
“Unilever’s valuation multiples will rise if food is sold,” said Frikee.
Schumacher’s experience at Ahold – now Ahold Delhaize ( AD.AS ) – and more than a decade at Heinz – now Kraft Heinz ( KHC.O ) – could also help Unilever in price negotiations with grocers such as Walmart ( WMT.N ), Tesco (TSCO.L) and Ahold itself.
“He’s been given a very difficult assignment, but I have every confidence that if anyone can move Unilever in the right direction, it’s Hein,” Johnson said.
($1 = 0.9183 euros)
Reporting by Richa Naidu Editing by Matt Scuffham and Mark Potter
Our Standards: The Thomson Reuters Trust Principles.
Richa Naidu
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