Almost six months into the job and it’s clear what Unilever CEO Alan Jope sees as the priorities for the Magnum ice cream and Dove soap maker.

Sales growth and sustainability.

And food will continue to have a role to play.

When Jope’s promotion was announced in November, the Scotsman said he would stick to Unilever’s target for its sales by 3-5% a year on an organic basis.

In 2018, Unilever’s sales rose 3.1% when excluding the contribution of the spreads business sold to private-equity firm KKR that July.

Reporting Unilever’s 2018 financial results was among Jope’s first market-facing tasks as the company’s new CEO and, addressing analysts on 31 January, he described the numbers as “solid” but added: “Looking forward, accelerating growth will be our number one priority.”

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By GlobalData

However, Unilever has forecast it expects its organic sales growth in 2019 to be in the lower portion of that 3-5% range.

This week in Paris, Jope provided analysts and investors with more detail on how he plans to get Unilever’s top line growing more quickly.

Speaking at the Deutsche Bank Global Consumer Conference yesterday (11 June), Jope said Unilever would be looking at three areas – its portfolio, the channels in which it does business and the countries in which it operates.

“There’s a belief that we can – and indeed should – deliver faster, market-beating growth,” Jope told his audience. “Our multi-year growth range is 3% to 5%. This year we’ve already guided that we expect to be in the lower half of that 3% to 5% range – but of course we aim to be firmly in the top half.”

Jope said Unilever is moving “our portfolio into higher growth segments”. Looking at the consumer-goods group from 30,000 feet, that shift is most apparent in the way Unilever is growing the division housing its beauty and personal care business. A live example is the acquisition Unilever announced on Monday of Tatcha, a “prestige skincare brand”.

The Unilever chief said: “We have consistently and strategically allocated more of our capital towards beauty and personal care.”

However, Unilever is making tactical moves within its lower-growth food and refreshment division, which comprises its ice-cream business, international food brand Knorr and its hot beverage brands, among others. And that was something Jope sought to emphasise in Paris.

“We also use M&A to shift our portfolio at a micro level and, by that, I mean within each division. So, for example acquiring into high-growth segments such as healthy snacking, vegan and organic foods and children’s nutrition,” Jope said. “Food and refreshment is not intrinsically slow growth; we just need to be in higher growing segments within food and refreshment.”

On channels, the Unilever chief underlined how the now (relatively) older retail formats of hypermarkets and supermarkets “remain very important to our business” but said the company is “strategically increasing our presence” in areas like e-commerce, foodservice (Jope described that as a “very significant opportunity”) and health-and-beauty. “These three channels today represent about 20% of our turnover and we expect them to grow at, at least 8% per annum for the next few years.”

And on geography, Jope, a 30-year Unilever exec who spent more than a decade working in Asia, highlighted the company’s presence in emerging markets. “You cannot understand Unilever by looking at us through a lens from London, Paris or New York. You have to get into the markets like Indonesia, India, Turkey, Brazil to really understand what Unilever is,” Jope told the conference. “Not only do we have the scale, we also have unparalleled breadth, which allows us to benefit from the growth opportunity, but with some risk diversification because of the breadth of our emerging markets presence.”

He added: “Please be in no doubt that setting up our growth is the most important priority that we have to ensure we continue to deliver superior long-term financial performance.”

Back in November, as well as sticking to Unilever’s target for organic sales growth, Jope also maintained the company’s goal, set out in 2017, of achieving an underlying operating margin of 20% by 2020. At the end of 2018, that metric stood at 18.4%.

Also in attendance in Paris yesterday was Jope’s fellow Scot Graeme Pitkethly, Unilever’s long-standing CFO. “We have a clear and sensible path as Alan and I talked about many times to reach 20% by 2020,” Pitkethly told the conference, before adding: “Now, this isn’t a precise 20.00%, you know, at midnight on the 31st December 2020 but it is one that can be delivered through the savings and reinvestment programs that we have, up and running already, and very well established in the business.”

While Unilever insists the margin target remains in place, the consensus estimate among analysts is for the company to hit 19.8%, so some in the investment community may have shifted their attention more towards the company’s plans for top-line growth. That said, if Unilever doesn’t hit that 20%, there will be some questions about what has stopped it from doing so.

For all that, in the round, the current demands of consumer-goods companies are for more balanced progress on sales and margins; gone (for now?) are the days when many investors (though there will remain exceptions) were looking for a significant up-tick in margins through wide-ranging actions on costs. The troubles at Kraft Heinz will have caused many to think again.

Away from sales and onto sustainability – though Jope believes the two are very much linked. When Jope replaced Paul Polman as Unilever CEO, there was some debate among analysts about whether the new man at the helm would dial down his predecessor’s corporate social responsibility agenda.

In many respects, it would be difficult not to be less focused on sustainability than Polman. However, Jope devoted a good chunk of his presentation to the performance of Unilever’s “sustainable living brands” – those the company says have an “environmental or societal” purpose and then back that up with action (indeed, ahead of the Paris appearance, Unilever’s press office issued a release detailing how those brands had grown faster than the rest of the portfolio).

“The differential between them and the rest of the portfolio seems to be widening,” Jope said in the French capital. “We believe very, very strongly – and increasingly have the evidence – that the purpose drives growth and so strongly do we believe this that we’re prepared to commit that in future every brand in Unilever’s portfolio will be a brand that competes on purpose.”

What could that mean for Unilever’s food business? More initiatives around environmental and societal impacts for existing brands are likely, as are more deals in areas like plant-based foods. “Plant-based is a mega-trend and so, in addition to things like acquiring The Vegetarian Butcher late last year, we’ve launched a number of vegan products,” Jope said. “I mean, who would have thought that a vegan Magnum, vegan Ben & Jerry’s even? 

“And Knorr recently launched a report in partnership with WWF, which has highlighted the 50 plant foods that we should eat for a healthier and better future. This mega-trend really is informing both our prioritisation, our acquisition and our innovation agendas.”