News Analysis: Unilever exposed as FitzGerald quits

As the FMCG giant prepares for life after its PR-friendly CEO's departure, and ploughs ahead with its 'Path to Growth' strategy, Ian Hall analyses the raft of comms challenges that lie ahead for the Anglo-Dutch group

It has been a busier than usual past few days at Unilever House, the building on the north bank of the Thames that houses the headquarters of the food and consumer products giant.

Financial results time for the Anglo-Dutch group, best known for brands such as Domestos and Dove soap, saw missed sales targets but profits at the top end of analysts' expectations.

There was a surprise, though, in the announcement that CEO and co-chairman Niall FitzGerald is to stand down, news that has thrown Unilever's future strategy into the analysts' spotlight.

FitzGerald, a 37-year Unilever veteran, will leave three months before the end of Unilever's much-touted five-year 'Path to Growth' strategy, which has cut costs and streamlined Unilever's brand portfolio.

FitzGerald has successfully integrated the Bestfoods business and slashed the brand portfolio from 1,200 to 400 'power brands', with more than 100 sites sold or closed and thousands of jobs shed.

Path to Growth remains ongoing

Although, as confirmed last week, Unilever has failed to meet targets - sales of diet drinks brand Slim-fast plummeted by 20 per cent last year as consumers turned to low-carbohydrate diets such as Atkins - FitzGerald insisted that all other aims have been achieved.

Unilever PROs declined to comment on how FitzGerald's exit might affect corporate communications strategy going forward, pointing out that Path to Growth remains ongoing.

They instead flagged up last week's mission statement, released by FitzGerald, which contained declarations such as: 'Our mission is to add vitality in life. We meet everyday needs to hygiene, nutrition and personal care with brands that help people feel good, look good and get more out of life.'

The emphasis on 'nutrition', reflected not only in company comms but also in the introduction of more nutritional food, fits industry trends.

The pressure to promote nutritional elements within corporate hampers are ever increasing, reflected at Unilever in last week's appointment of Weber Shandwick to handle corporate and consumer PR for its food portfolio (PRWeek, 13 February). WS refused to comment on its brief but Unilever's hiring of the agency is no surprise to one PRO, who says 'nutrition and obesity are the biggest issues for any food company right now'.

But Huntsworth business development director Alison Clarke, who has worked on Unilever business in the past, points out: 'Unilever has a heritage of innovation linked to health - it has more positive stories than most'.

Indeed the food that Unilever markets - it is particularly well regarded in respect of its low-fat spreads, such as Flora or Becel - is not, as one PRO points out, 'the worst in the world in respect of nutrition - although it does have some things covered in batter'.

Beyond nutritional concerns, though, Unilever is widely perceived as a good corporate citizen, a fact credited to not just the corporate communications function but FitzGerald himself. But as Joanne Milroy, who has worked on Unilever business in the past and is now a partner at corporate PR shop Eloqui, points out in reference to the group's global reach: 'You're only as strong as your weakest link and Unilever has the most extraordinary tentacles.' But she adds: 'The company has invested heavily in ensuring it has a good reputation'.

Unlike, say, rival food group Nestle, whose corporate brand is closely associated with its products, Unilever keeps its heritage in the shadows of its brands.

'I don't think it plans to "do a Nestle" and put its global brand on everything,' observes one PRO, adding: 'It isn't a Procter & Gamble, the sort of firm that's aggressive and smacks you in the face with its heritage.

Unilever's Anglo-Dutch, after all.'

FitzGerald will be replaced by company stalwart Patrick Cescau. But the jury remains out as to whether FitzGerald's high media profile may inadvertently spell future PR difficulties for Unilever if the media demand an equally ebullient successor.

The Independent business editor Jeremy Warner accepts that, saying: 'One criticism (of Unilever) is that Niall is very much the public face.

The cult of personality is not necessarily a good thing.'

'It has taken a lot of trouble to ensure its reputation is enhanced - Niall has worked very hard at it. Unilever has an image of integrity,' adds Warner.

There are some, however, who see Unilever's future corporate re-allignment - it was announced last week that sales targets will be replaced with broader objectives to boost cashflow and returns to shareholders - as potentially having negative consequences for the sort of corporate comms and CSR work for which Unilever has forged a good reputation.

Warner adds: 'The edges may be rougher from here on in. If you're focused on bottom-line returns, investment in the arts and such things are one of the first things to be chopped.'

With the focus turning to shareholder dividends, PROs at Blackfriars Bridge are well aware that corporate developments will be very much in the media spotlight as FitzGerald prepares to hand over the reins.

WHO'S WHO IN UNILEVER CORPORATE AFFAIRS

- PLC

Mandy Cormack head, corporate relations London and vice-president

corporate responsibility

Constance Kann head, corporate relations Rotterdam and vice-president

global public affairs

Howard Green senior vice-president investor relations

Mike Haines head, corporate media relations

Trevor Gorin corporate media relations manager

- UK

Cliff Grantham director of UK corporate affairs

Patrick Kerr head of UK communications

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