This week in FMCG Weekly, we cover three newsworthy developments in the FMCG world: Unilever's unexpected CEO change, why promotions are more important than innovation in Germany’s breakfast category, and Procter & Gamble’s use of AI to optimize advertising effectiveness.
First, Unilever’s CEO Shake-Up: A Sudden Exit and a New Leader
In a move that shocked analysts and investors, Unilever has announced the resignation of its CEO, Hein Schumacher, after just 18 months in the role. Schumacher, who took over in July 2023, was praised for implementing a strategic reset that delivered Unilever’s best financial results in over a decade. Under his leadership, the company improved margins, increased underlying operating profits by 15%, and saw a 15% rise in share value.
However, his tenure was not without turbulence. Earlier this month, Unilever’s stock dropped 6% in one day following a warning about a slow start to 2025. Despite similar challenges faced by global competitors, the Unilever board has opted for a change at the top, appointing current CFO Fernando Fernandez as Schumacher’s successor.
Industry experts speculate that Schumacher’s outsider status—he previously led dairy giant FrieslandCampina—may have contributed to internal friction. RBC analyst James Jones notes that there were concerns about how Schumacher’s restructuring efforts impacted morale, suggesting that insiders may have pushed for his removal.
Fernandez, a Unilever veteran with 37 years in the company, is seen as a natural successor. He previously led Unilever’s beauty and wellbeing division and has extensive experience in emerging markets, particularly India, which is central to Unilever’s growth strategy. Analysts believe his appointment signals a push to accelerate Unilever’s transformation, particularly in portfolio restructuring.
One key question remains: what does this leadership change mean for Unilever’s food brands? Schumacher had indicated that legacy food brands like Marmite, Colman’s, and Pot Noodle could be sold off to focus on globally scalable businesses. With Fernandez’s background in personal care and beauty, he may move even faster in that direction. While Unilever’s stock dipped 2% on the news of the CEO change, analysts see this as a relatively mild reaction, signaling confidence in Fernandez’s ability to drive the next phase of growth.
The Breakfast Market in Germany: Promotions Are King
Germany’s breakfast market experienced a shake-up in 2024, with promotions playing a critical role in determining product performance. Categories such as yogurt, sweet spreads, and peanut butter saw strong sales growth, while traditional cereals continued to decline.
Yogurt, in particular, benefited from a 2.5% price decrease, leading to a 4.2% rise in sales volume and a 1.6% increase in sales value. Sweet spreads experienced an 11.8% revenue jump, despite a 9.2% price increase. Analysts suggest that new product innovations and increased promotional activities contributed to this growth.
In contrast, traditional cereals struggled, with sales declining by 1.9% in value and 1.8% in volume. The delisting of certain cereal products from major retailers exacerbated this trend. Private-label cereals fared slightly better, growing by 1.3% in revenue and 3.1% in volume, mainly due to aggressive promotional support.
Interestingly, within the cereal category, sugar-free and organic products showed positive growth, as did vegan-friendly options. This aligns with broader consumer trends favoring health-conscious and plant-based choices.
The role of promotions cannot be overstated. Muesli, for example, saw its promotional share rise to 23.4% of total sales, while frozen baked goods, including croissants and rolls, saw a promotional sales share of 33.1%. This suggests that brands are relying more heavily on discounts and promotional tactics to drive demand, as price sensitivity among consumers remains high.
The key takeaway from this data is clear: for brands competing in Germany’s breakfast market, promotional strategy is just as important—if not more so—than product innovation. Without sufficient promotional backing, even well-established brands risk losing shelf space and sales momentum.
Procter & Gamble Relies on Generative AI for More Effective Advertising
Procter & Gamble (P&G) is leading the charge in AI-driven advertising, as highlighted by Chief Brand Officer Marc Pritchard at the recent ANA Media Conference. Pritchard revealed that AI and proprietary algorithms are now central to P&G’s marketing strategy, enabling the company to optimize ad targeting, creative testing, and media planning.
P&G has shifted away from broad-reach advertising toward precision marketing, leveraging first-party data to reach consumers more effectively. Pampers, for example, has developed a proprietary algorithm that segments consumers based on their stage of child development. By using tools like a due date calculator and a baby name generator, Pampers collects data that allows for highly targeted advertising.
In creative testing, P&G employs a neural network AI trained on decades of consumer research. This system predicts ad performance and suggests real-time optimizations, such as altering images, music, or copy to maximize engagement. Pampers alone has optimized over 140 different ads annually across platforms like TikTok, YouTube, and e-commerce, leading to a 10% sales increase and a 17% boost in ROI.
The impact of AI extends to media planning as well. Tide, for instance, uses AI-driven scheduling algorithms to place TV ads more effectively, reducing redundancy and maximizing reach. This strategy saved P&G $65 million in media costs last year. Additionally, P&G is testing an automated bidding system for retail media networks, adjusting ad spend every 15 minutes to optimize performance. Early results show a fourfold increase in return on brand sales.
As P&G continues to refine its AI capabilities, the role of traditional advertising agencies is shifting. Pritchard emphasized that agencies must now provide forward-thinking insights and “see around corners” to remain valuable partners in an increasingly automated marketing landscape.
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