Unilever hunts for new CEO as Alan Jope retires end of 2023

Unilever CEO Alan Jope (pictured) will be retiring from the company in December 2023, after five years in the role.  The company's board will now proceed with a formal search for a successor and will consider both internal and external candidates.

Unilever chairman, Nils Andersen said Jope’s retirement next year will mark the end of a career with Unilever. Under his leadership, Unilever made critical changes to its strategy, structure and organisation that position it for success. "The company has seen improved performance, enabled by its clear strategic choices and a significant company transformation. The board will now conduct an orderly succession process and support Jope and the management team in further driving the performance of Unilever," Andersen said. 

“As I approach my fifth year as CEO, and after more than 35 years in Unilever, I believe now is the right time for the Board to begin the formal search for my successor. Growth remains our top priority, and in the quarters ahead I will remain fully focused on disciplined execution of our strategy, and leveraging the full benefits of our new organisation,” Jope added.

Jope was appointed chief executive officer in January 2019. As CEO of Unilever, he is responsible for leading one of the world’s largest and most geographically diverse consumer goods businesses, with presence in 190 countries, serving 3.4 billion people every day.

His career with the company spans 37 years with Jope joining in 1985 as a marketing trainee. He also worked in leadership roles in North America for 14 years and Asia for 13 years. When leading Unilever's business in China, Jope was credited to have doubled its size and laid important foundations for future success. Before being appointed as CEO, he served as president of the Beauty & wellbeing and Personal Care Division.

Not the easiest rule

According to WSJ the change comes as the company looks to reinvigorate growth. Post the announcement by Unilever, the company’s shares have gained just over 10%.

Meanwhile Jope’s leadership at the company has also been tumultuous. Earlier in the year,  he was judged harshly for strategic missteps resulting GlaxoSmithKline’s consumer healthcare arm listing on the London Stock Exchange with Haleon instead of Unilever. Last year the company also sold its global tea business housing iconic brands such as Lipton for SG$6.9billion.

Unilever is also currently in a legal dispute with the founders of Ben & Jerry’s who have accused the brand of breaching the terms of the contract made two decades ago after Unilever decided to sell the ice-cream operations in Israel to the local licensee. This comes after Ben & Jerry’s announced it would stop selling ice cream in the Occupied Palestinian Territories. This year, Ben & Jerry’s took to the courts to then sue Unilever, claiming the sale of the Israel operations violated the original merger and shareholder agreement.

Marketing spend this year

Meanwhile, Unilever increased its brand and marketing investment during the first half of the year. CFO Graeme Pitkethly said during the earnings call that its brand and marketing investment in constant currencies was about US$3.7 billion, up by approximately US$202 million versus the previous year.

"We're continuing to invest behind our brands. We think it's extremely important to do that in driving growth and keeping that brand equity high. The reason for being early and pricing proactively is to protect the shape of our P&L in order that we can invest back in our brands," he explained.

The FMCG giant plans to invest competitively in marketing, R&D, and capital expenditure in the second half of the year. Its full year underlying operating margin expectation remains at 16%, which is within Unilever's guided range of 16% to 17%.

"As far as the second half is concerned, we'll continue to invest more in brand and marketing investment. In terms of the basis points, it's hard to say because a lot depends on the pricing and what happens with the top line in terms of what the actual basis point movement will be. But you can expect that we'll continue to invest more behind our brands," Pitkethly said.

Additionally, Unilever also raised its prices by 11.2% in recent months and plans to do so again for the remainder of the year. In the majority of markets in which Unilever operates, market growth was driven by price which had an impact on market volumes. The price increase allowed the FMCG giant to report sales growth of 8.1% in the first half of 2022, compensating for the decreasing volume of goods sold.

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