Soup to Soap! Unilever Plans Food Biz Exit as Beauty Bets Rise

Unilever, the British consumer goods giant behind household names like Dove, Vaseline and Knorr, is in talks to sell its foods business to American spice maker McCormick & Company, in a deal that could mark a significant shift in the company's strategy.

Unilever confirmed on Friday that it had received an offer from McCormick. The US company, in turn, confirmed it was in discussions with Unilever over a potential deal involving the foods business, according to Reuters. Both sides, however, were careful to note that there was no certainty a transaction would actually go through.

A Company Reinventing Itself

The potential sale is part of a broader strategic pivot by Unilever away from food and toward health and beauty products, according to Bloomberg.

The company has been steadily reshaping its portfolio, most recently spinning off its ice cream business, which includes the Magnum brand, as it shifts focus toward what may be seen as higher-growth, higher-return personal care and beauty categories.

Unilever reportedly described its foods business as "highly attractive with a strong financial profile" and said it remained confident in its future as part of the group.

The talks come at a difficult time for the global food industry. Major players like Unilever and its Swiss rival Nestlé are finding it increasingly hard to grow as consumers, squeezed by the rising cost of living, cut back on spending and cheaper supermarket own-brand products instead of established names.

There is also a longer-term threat on the horizon. The rising popularity of GLP-1 weight-loss drugs, like Ozempic, which are causing users to eat less overall or gravitate toward lower-calorie foods, potentially shrinking the market for traditional food brands, the report added.

Beauty, by contrast, has been a bright spot. Younger and older consumers alike are spending more on skincare, fragrances and personal care products, making it an attractive growth area for multinational companies.

Meanwhile, closer to home, Unilever's Indian arm, Hindustan Unilever Ltd (HUL), moved quickly to distance itself from the developments. HUL on Thursday released a clarification, stating that its foods business remains "an important and attractive segment". It further mentioned that it is "not in any discussions regarding divestment of the Foods portfolio."