Unilever announced on Friday it is in talks with US-based McCormick & Company about selling its foods business, in a potential deal that would bring together its Hellmann’s, Marmite, Colman’s and Knorr brands with McCormick’s iconic Cholula hot sauce.
Unilever, the global firm headquartered in the UK, said it has received an inbound offer for the business, which made up about a quarter of its total sales in 2025, generating more than €12.9bn (R250.89bn) last year.
The talks mark a potential acceleration of CEO Fernando Fernandez’s strategy to reposition Unilever towards higher-margin beauty and personal care categories after the spin-off of its ice cream business last year.
The companies confirmed the talks on Friday after the Wall Street Journal broke the story late on Thursday.
Meanwhile local subsidiary Unilever SA — which also makes household brands such as Handy Andy, Lux, Omo and Domestos — wants to double its locally sourced materials and products.
The company makes about 95% of its products locally at its six factories, including in Durban and Johannesburg.
“We’ve been rebuilding our capability as an organisation to drive innovation … the lifeblood of an organisation.
“While the one big innovation is new products, I think also a lot of innovation in localisation is a big drive for us,” said Unilever South Africa CEO Justin Apsey.
In 2019, Unilever sourced 40% of its material locally, but its operations were negatively hit by Covid-19 when import supplies were halted.
“Hopefully by the end of this year, we will have 85% local inclusion across our organisation. And that requires a lot of innovation, because you’ve had to think a little bit, how do you generate manufacturers?
“How do you create more inclusive supply chains in what you’ve done? And how do you change your spend in areas you’d traditionally spend with global suppliers into local suppliers?”
Over the years, the company has spent about R3bn on small, medium and micro enterprises.
Unilever produces household brands such as Shield, Vaseline, Knorr and Rajah. Apsey said some of its products, especially in personal care, face stiff competition.
“We have parts of our business where we’ve made fantastic gains … and parts where we struggled against some good local and global competitors that have done different things.”
The food care categories were moving in the right direction, Apsey said, while “we’re seeing home care, like washing liquids and washing powders, a little more subdued, and people moving and dropping down to probably smaller pack sizes, dropping down in price points.
“The categories are not growing and are changing in how they’re structured.
“The middle of the market is getting smaller, the bottom is getting bigger, and the top, actually premium, is getting better.
“Brands in the middle are under pressure, but we’re getting a lot of traction with stuff at the top.”
The Vaseline Cera-Glow and Dove ranges of body moisturisers and deodorants are performing well, while Dawn body lotion in the middle segment is under pressure as consumers opt for bottom-end lotions such as petroleum jelly.
“The biggest challenge in our country at the moment, which worries me the most, is GDP growth. The second-biggest thing for me is talent supply, which remains constrained.”
Unilever’s sales and marketing have been hardest hit due to competitors poaching each other’s employees, Apsey said.
“Sales and marketing is where I’m the most focused at the moment, because that’s the lifeblood of the business going forward, so we need a much stronger pipeline.
“And that’s where the youth can be very involved ... the way things are changing with e-commerce, there’s a lot more we could do in that space.” Reuters-Business Times