Why Unilever CEO Fernando Fernandez Wants an Influencer in Every Zip Code

**Fernando Fernandez** (0:00)
Strategy is the art of sacrifice. And you really, if you don't make tough choices, if you don't suffer when you make some of these choices, probably you are not really having a strategy.

**Alan Murray** (0:09)
The WSJ Leadership Institute Presents Leaders. I'm Alan Murray.
We live in a world that is noisier, faster, more complex than ever. So how do leaders stay focused on what matters most?
Unilever CEO Fernando Fernandez is tackling these questions at a massive scale. He runs one of the world's largest consumer products companies, serving nearly 4 billion customers in 190 countries with famous brands like Dove, Vaseline, Knorr, Hellmans. His path to the top is a testament to the power of working your way up from the inside. Born in Argentina, Fernandez joined Unilever as an analyst in the late 1980s, steadily climbed the ranks across three continents before stepping into the CEO role. Now he's tasked with transforming a century-old giant for a very new era. In this episode, he discusses the tough choices he's making to simplify the company's portfolio, like spinning off its famous ice cream business, and how he's using AI and an army of 300,000 influencers to change how consumers discover their products. My conversation with Unilever CEO Fernando Fernandez right after this break.

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**Alan Murray** (1:43)
Talking about transformation, you have been at the job for a year, you have in mind a pretty profound transformation. What's your theory of the case?

**Fernando Fernandez** (1:53)
Well, we are trying to really build a Unilever that fulfill the incredible potential of our brands, our people, our geographical footprint, our category footprint. We have been a bit of an inconsistent performer.
We have real pockets of excellence, but the performer has not been homogenous across our categories, our brands, our geographies. We are really sharpening the portfolio of Unilever, simplifying the company, making it easy to manage in a set of categories that really share significant foundations.

**Alan Murray** (2:29)
So, let's take a very specific example to explore that. Ice cream out the door.

**Fernando Fernandez** (2:34)
Yeah.

**Alan Murray** (2:35)
Both because it was not performing, but also because it didn't really have synergies with the rest of the portfolio.

**Fernando Fernandez** (2:40)
I feel like ice cream is a category that is fundamentally out of home channel, with significant seasonality, high capital intensity. It's very different to categories like home care, personal care, or beauty.
So, that's a clear example of a category that didn't have significant complementarity with our portfolio and require completely different capabilities and requires a business model that is tailor made for that kind of company. So, that's the reason that we separated ice cream around one and a half year ago.

**Alan Murray** (3:10)
Do you miss it? Did you have a favorite flavor?

**Fernando Fernandez** (3:12)
Well, I love ice cream.

**Alan Murray** (3:12)
Are you a chunky monkey fan?

**Fernando Fernandez** (3:14)
I love Magnum and some of our best innovation has been in the ice cream category. Some of our best brands are there. But you know, strategy is the art of sacrifice.

**Alan Murray** (3:25)
Yeah.

**Fernando Fernandez** (3:25)
And you really, if you don't make tough choices, if you don't suffer when you make some of these choices, probably you are not really having a strategy. So, we miss ice cream and I miss it at every dessert time.
But you know, we are really confident in the decision that we have.

**Alan Murray** (3:42)
And perhaps more significantly, you've made the decision to get rid of all the food and merge it into McCormick. Can you talk about that decision?

**Fernando Fernandez** (3:52)
Yeah. We announced on the end of March, the combination of our food business with McCormick. We are creating a large global flavor powerhouse of $20 billion revenue. I believe it's a company that will fundamentally have a scale and focus that is very difficult to find in the food industry.
We believe we are building a fabulous company in foods, and at the same time, we are really making Unilever a pure play, home care, personal care company that are sectors in which we live the competencies that the company has in terms of innovation, science, consumer understanding, key consumer dynamic. And we will feed better with our capabilities. So that's the reason of this big transaction. It's the fourth largest transaction in the history of consumer goods. We will close it in one year or so.