Unilever Exits Food to Become HPC Pure Play, Sharpening Rivalry with P&G

On the last day of March 2026, Unilever quietly closed a chapter that had been open since the company's founding. The Anglo-Dutch consumer goods giant announced it would merge its entire foods business — Knorr, Hellmann's, Colman's, Marmite and the rest — with McCormick & Company, the spice and condiment firm best known for the red-capped tins in every American pantry. The combined entity would carry revenues of $20 billion and, in McCormick's own telling, become a global flavor powerhouse. For Unilever, the deal meant something more fundamental: after nearly a century in the food business, it was getting out.

The financial terms were substantial. Unilever and its shareholders would receive equity representing 65% of the combined company, with Unilever itself retaining a 9.9% stake — one it intends to sell off gradually, no sooner than a year after the deal closes. On top of that, Unilever would pocket $15.7 billion in cash at closing. McCormick shareholders, for their part, would hold the remaining 35%. A handful of food assets are excluded from the arrangement: Unilever's food and beverage operations in India, Nepal, and Portugal stay put, as do its Lifestyle Nutrition business, its Buavita juice brand in Indonesia, and its Lipton Ready-to-Drink line.

This transaction is the capstone of a divestiture campaign that has been building for years. In July 2022, Unilever sold its tea business, Ekaterra, to CVC Capital Partners for €4.5 billion. In December 2025, it spun off its ice cream division — home to Magnum and other brands — as a standalone public company called The Magnum Ice Cream Company. Smaller brands like Graze and The Vegetarian Butcher were sold along the way. The McCormick deal is the last and largest piece of that unwinding.

What remains is a company CEO Fernando Fernandez describes as a home and personal care pure play, with revenues of roughly €39 billion, or about $46 billion. Beauty, wellbeing, and personal care will now account for approximately 67% of Unilever's revenue, compared to 51% in 2025. Fernandez has been direct about the logic: these categories grow faster, command premium pricing, and are far less vulnerable to private-label competition than food. In the US alone, store-brand products capture more than 20% of food retail dollar sales — a share that keeps climbing. In beauty and personal care, the equation is different. Efficacy, science-backed formulation, and brand equity create a moat that a supermarket's own label struggles to cross.

The growth numbers bear this out. In 2025, Unilever's personal care segment grew underlying sales by 4.7%, beauty and wellbeing by 4.3%, and home care by 4.7%. Foods, by contrast, grew at 2.5%. The direction of travel was already clear before the deal was announced.

The strategic consequence that analysts are watching most closely is what this means for the rivalry with Procter & Gamble. P&G has always been the dominant force in global HPC — its fiscal year revenues came in at $84.3 billion, against Unilever's $59.3 billion total. Strip out the food business being sold, and the continuing Unilever is roughly 52% of P&G's size. That's a meaningful gap, but it's a gap on a shared battlefield. Both companies compete across personal care, beauty, and home cleaning. Both are betting on innovation and premiumization as the engines of growth in a market where unit sales have been stubbornly flat and price increases have done most of the heavy lifting in recent years.

At the Consumer Analyst Group of New York Conference in February 2026, Fernandez laid out Unilever's innovation framework under the acronym SASSY — Science, Aesthetic, Sensorials, Shared by Others, and Young-Spirited. The framework is meant to guide product development toward sensory superiority and premium positioning. Herrish Patel, who leads Unilever's US personal care business, told the same conference that the company's innovation pipeline heading into 2026 was the strongest it had ever been in the American market. P&G's CEO Shailesh Jejurikar, speaking at the same event, framed his company's priorities in strikingly similar terms: restoring growth, transforming brand building, and mining consumer insights to drive new product development.

The broader CPG industry is in the middle of a deconglomeration wave. Haleon was spun out of GSK. Kenvue was separated from Johnson & Johnson. Kellanova was split from Kellogg's before being acquired by Mars. Kraft Heinz announced a split in 2025, then suspended the plan in 2026. The logic is consistent across all of them: focused companies, the thinking goes, allocate capital better, move faster, and tell a cleaner story to investors. Unilever's move fits squarely in that current.

Even as it sheds legacy businesses, Unilever is still buying. On April 9, 2026 — just days after the McCormick announcement — the company said it was acquiring Grüns, a nutrition supplement brand founded only in 2023. The message is deliberate: Unilever is not simply shrinking. It is reshaping itself around categories where it believes the next decade of growth will be won. Whether it can close the gap with P&G, or at least hold its ground, will depend on whether that bet proves right.