Unilever To Increase Spend On Social Media Marketing And Accelerate Pace Of Food Brand Disposals

Unilever’s new Chief Executive has revealed that the business is planning to recruit more social media influencers to market its products because consumers are “suspicious” of corporate branding.

According to the Financial Times, Fernando Fernandez told Barclays analyst Warren Ackerman in an interview last week: “Messages of brands coming from corporations are suspicious messages,” adding: “Creating marketing activity systems in which others can speak for your brand at scale is very important.”

He said Unilever was switching to a social media-first advertising model, increasing its investment on such platforms from 30 to 50% of its total advertising spend. The company has increased its overall marketing spend from 13% of turnover in 2022 to 15.5% in 2024.

In the past, Unilever has attracted the ire of investors 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 FT noted that the tactic has lost traction i.e. 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.”

Meanwhile, Fernandez told Ackerman they were sticking to his predecessor’s plan to only carry out bolt-on acquisitions and would accelerate the pace of disposals of smaller regional food brands.

“Every brand in our portfolio, every category 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.”

Analysts and investors have suggested that Unilever’s food business no longer fits with the rest of the company’s faster-growing product portfolio.

While Fernandez did not rule out a separation of the entire food portfolio, he said the division’s two leading brands – Knorr and Hellmann’s, 60% 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.

NamNews Implications:

• On this, the fifth anniversary, it could be said that trust was the biggest casualty of Lockdown…
• With consumer “suspicion” of corporate branding an example of the damage at brand level.
• Third-party recommendations patently can have more pulling power with consumers.
• And given its potential reach, in the right hands, social media is becoming more powerful.
• i.e. this Unilever change has to be a pointer for others...