Unilever is exploring a potential separation of its food division in a move that would mark one of the most significant strategic overhauls in its modern history.
According to reports, the FMCG giant is in early-stage discussions with advisers about options that could include spinning off most, or even all, of its food business.
While no decisions have been made, any deal is unlikely to materialise before 2027, and the company may ultimately retain its current structure.
A portfolio under transformation
The review is the latest step in a sweeping reshaping of Unilever’s portfolio under CEO Fernando Fernandez, who has accelerated efforts to pivot the business towards higher-growth, higher-margin categories.
Over the past 18 months, the group has made a series of decisive moves. In late 2025, it completed the demerger of its ice cream arm into The Magnum Ice Cream Company, while also offloading brands including Graze and The Vegetarian Butcher.
Other food assets, including Marmite, Colman’s and Bovril, have also reportedly been under consideration for sale.
This marks a dramatic shift for a company where food once dominated. The division now accounts for roughly a quarter of group revenues, down from around 60 per cent in the 1990s.
Despite generating €12.9bn in turnover in 2025, the food arm has delivered relatively modest growth, with underlying sales rising just 2.5 per cent.
Within that, a handful of core brands, most notably Hellmann’s and Knorr, account for around 60 per cent of sales, a figure Unilever has been actively trying to increase through further consolidation.
Doubling down on beauty and wellbeing
The potential separation reflects a broader strategic recalibration. Under Fernandez, Unilever has been leaning heavily into beauty, personal care and wellbeing, categories offering stronger margins, greater pricing power and more robust long-term growth.
In 2025, these divisions generated €26bn in revenue, more than double that of food, underlining where the company sees its future.
Peers including Kraft Heinz, Nestlé and Coca-Cola have all undertaken significant portfolio reshaping in recent years, reflecting a broader shift away from legacy food assets.
For now, however, Unilever’s plans remain exploratory. The company is still weighing its options and whether food, in any form, continues to fit within its long-term vision.
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