The consumer-goods sector is undergoing its biggest management shakeup in decades — one that could transform the makers of everything from Vaseline to vodka.
During the past six months or so, there’s been a raft of leadership changes at some of the world’s biggest brand manufacturers. But not all
opportunities are created equal. For all its recent turbulence, Unilever Plc’s new chief executive officer stands the best chance of creating value.
The revolving doors swung open last September, when Reckitt Benckiser Group Plc CEO Laxman Narasimhan quit to join Starbucks Corp. The maker of Nurofen painkillers and Dettol disinfectant is still searching for a replacement.
Just a few weeks later, Unilever announced that Alan Jope, the boss who had been under pressure after last year’s botched £50 billion ($62.4 billion) bid for GSK Plc’s consumer arm (now listed as Haleon Plc), would retire this year. He will be succeeded in July by Hein Schumacher, who joins from Dutch dairy cooperative Royal FrieslandCampina. Meanwhile, Unilever chairman Nils Andersen has been on the board since 2015 and is approaching the point where he would no longer be considered independent under UK governance rules. That could mean a change of chairman once Schumacher is settled in.
More recently, Cees ‘t Hart, who has successfully steered Carlsberg A/S for the past eight years, decided to retire and will be succeeded by 45-year-old Jacob Aarup-Andersen, who has led ISS A/S for the past three years. And two weeks ago, Diageo Plc announced that Ivan Menezes would retire after 10 years as CEO to be succeeded by Chief Operating Officer Debra Crew.
Of all the newcomers, Schumacher at Unilever looks best placed to succeed. Despite the company’s scale and that it generates 60 percent of its sales from emerging markets, Unilever underperformed during Jope’s tenure.
If Unilever proves to be too cumbersome and improvement fails to materialize, there is another obvious route: a breakup. In simple terms, this would be a split between Unilever’s food and non-food operations. But with the five business units, Unilever could be sliced and diced in different ways, and much of the groundwork for separation has already been done.
There is one big strategic move Diageo’s Crew could make: Sell Guinness. But it’s hard to see this happening without having something to spend the proceeds on. Perhaps if LVMH Moet Hennessy Louis Vuitton SE were to bid for Chanel or Cartier-owner Cie Financiere Richemont SA, then it might look to sell its 66 percent stake in Moet Hennessy. Diageo, which owns 34 percent, could sell Guinness to help it buy out LVMH. But that’s a lot of ifs and coulds.
He said in November that 2020’s almost $2 billion deal to buy the shares in Aimmune Therapeutics that Nestle didn’t already own hadn’t lived up to expectations. He is now exploring options for Aimmune, the developer of the Palforzia peanut allergy treatment. And investors have begun to ask questions about the level of sales growth, margins and investment.
For now at least, Nestle’s continuity stands out against the rest of the sector’s musical chairs.
Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Views are personal and do not represent the stand of this publication.
Credit: Bloomberg
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