---
title: "McCormick Integrates Unilever Foods, Betting on a New Health Track"
description: "In one of the most transformative deals in both companies' histories, the leaders of Unilever and McCormick have offered an in-depth 'unpacking' of the transaction. Recently, Unilever CEO Fernando Fernandez and McCormick Chairman, President, and CEO Brendan Foley each sat down for fireside chats with Barclays analysts, dissecting the latest deal and future plans. So, between McCormick and Kraft Heinz, why did Unilever choose the former?"
author: "潘娴"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2026-04-22"
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# McCormick Integrates Unilever Foods, Betting on a New Health Track

> In one of the most transformative deals in both companies' histories, the leaders of Unilever and McCormick have offered an in-depth 'unpacking' of the transaction. Recently, Unilever CEO Fernando Fernandez and McCormick Chairman, President, and CEO Brendan Foley each sat down for fireside chats with Barclays analysts, dissecting the latest deal and future plans. So, between McCormick and Kraft Heinz, why did Unilever choose the former?

In one of the most transformative deals in both companies' histories, the leaders of Unilever and McCormick have offered an in-depth 'unpacking' of the transaction.
Recently, Unilever CEO Fernando Fernandez and McCormick Chairman, President, and CEO Brendan Foley each sat down for fireside chats with Barclays analysts, dissecting the latest deal and future plans.
Leaders of Unilever and McCormick
So, between McCormick and Kraft Heinz, why did Unilever choose the former? Why act on the food business so soon after saying goodbye to ice cream? Is Unilever's transformation truly aimed at moving closer to Procter & Gamble and L'Oréal? Which segments in the Chinese market will become key investment targets?
'Completely Different'
As previously reported, Kraft Heinz and McCormick were both rumored to be in talks with Unilever about merging its food business. Ultimately, Unilever's food business 'teamed up' with McCormick. In the Chinese market, this means products like Knorr chicken bouillon and McCormick ketchup will become 'one family.'
To outsiders, Unilever's deal seems rather sudden. Although the possibility of spinning off the food business has been frequently raised over the past two years, senior executives' public statements have consistently emphasized the importance of this segment.
Moreover, less than six months have passed since Unilever divested its ice cream business, raising questions about the timing of this split.
'I'm glad the question has shifted from 'why not do it' to 'why do it now'—previously, I was often asked 'why not do it,'' Fernandez revealed. The opportunity for this split arose when McCormick proactively proposed an acquisition plan. In fact, when divesting ice cream, the company had already included spinning off the food business in its 'strategic thinking' and carried out some important preparatory work.
In explaining why Unilever chose McCormick, beyond the previously stated business complementarity, ease of passing antitrust review, and $600 million in synergies, Fernandez also cited other reasons, such as giving shareholders greater choice.
For years, Unilever has faced pressure from some shareholders to spin off the food business. The Financial Times this month, citing 'insiders,' reported that the split has the support of activist investor Nelson Peltz, who joined Unilever's board in 2022.
According to 'two insiders,' Hein Schumacher was dismissed last year partly because he opposed a full divestiture of the food division.
I also noticed that at yesterday's Barclays fireside chat, McCormick Chairman, President, and CEO Brendan Foley further revealed that recently, Unilever has more clearly expressed its desire to separate the food business from other operations. For McCormick, which has long admired and followed Unilever Foods, this is a 'once-in-a-lifetime opportunity.'
'We will give shareholders the option to continue holding the food business equity, or reduce or fully exit as they see fit. This is different from the current situation, because when the food business is part of Unilever, you don't have these options,' Fernandez said.
At the same time, he is optimistic about McCormick's business prospects, noting that flavor foods are one of the few areas in the industry where GLP-1 weight-loss drugs are seen as a structural tailwind rather than a headwind, and this area has not yet been impacted by retailers' private-label value brands.
With the rise of GLP-1, users' protein intake needs increase, which will drive up consumption of flavor foods.
'The food industry is full of companies with sluggish growth, underinvestment in brands, and structural headwinds. But McCormick's situation is completely different,' Fernandez said. McCormick's uniqueness lies in its presence in a highly attractive vertical market, and therefore its potential is higher than most food companies.
Among GLP-1 users, some may experience reduced taste and appetite, and muscle loss. When eating less but more selectively, they tend to choose foods that are intensely flavored and protein-rich.
As a company focused on seasonings, especially spices used in cooking meat, McCormick's products have a natural advantage. According to its official website, McCormick is the world's largest spice and chili sauce company.
Beyond the promising outlook, he also noted that McCormick has extensive acquisition experience and can properly integrate and grow brands, with a typical case being its purchase of Reckitt's food business.
According to public data, in 2017, McCormick acquired Reckitt's food division for $4.2 billion, securing North American well-known products such as Frank's RedHot sauce and French's mustard. It is said that this deal propelled McCormick from tenth place in the U.S. seasoning industry to a 'leading position.' At the time, it was also McCormick's largest acquisition ever, completed in just one month from announcement to closing.
In March this year, Reuters cited analysts saying that McCormick has built a reputation as a 'savvy acquirer' over the past decade, with previously acquired brands like Frank's RedHot and French's turned into growth engines, accounting for a 'significant portion' of its $6.8 billion annual sales.
Reassurance
However, compared to integrating Unilever's food business, the scale and complexity of McCormick's past acquisitions are not on the same level.
Previously, McCormick's acquisition targets were much smaller than its own size, but Unilever Foods is nearly twice the size of McCormick, and the integrated business will be led by McCormick's senior management. This brings new uncertainty for Unilever shareholders and employees.
Fernandez admitted that while investors recognize the long-term value of the deal, they also worry about short-term risks.
'They worry that the split process will disrupt Unilever's momentum, and they also worry about how much effort McCormick will need to integrate a business twice its size. We and McCormick's management are fully aware of this, and plans are already in place,' Fernandez said.
'In the new company, Unilever will hold 10%, and company shareholders will hold 55%. It is our responsibility to support McCormick in completing the integration, and we will do it, and do it well,' he added.
McCormick's CEO Brendan Foley said in the Barclays chat that the two sides will set up a dedicated team and a joint leadership committee to coordinate the integration. Unilever will need time to handle back-end legal and financial matters to complete the divestiture.
Both sides are currently preparing regulatory filings as planned, which is the key factor determining the overall timeline. During this period, both companies will continue to develop their core businesses with high discipline, and one of their top priorities is to achieve their 2026 targets.
Additionally, after successfully spinning off the ice cream business on schedule, Unilever plans to replicate that success in this deal. Fernandez revealed that in addition to using the same professional team, the company is also controlling stranded costs (costs that cannot be transferred to the buyer with the divested business) through a hiring freeze.
According to a Reuters report last month, Unilever has implemented a hiring freeze for 'all levels' of positions globally, lasting at least three months. The company responded that this is due to the expanding impact of the Middle East conflict and external environmental uncertainty.
According to Fernandez, this move is not only to respond to market volatility but also to reduce the impact of the food business split on financial statements. 'One of the key factors in the successful ice cream split was that we used natural attrition and a hiring freeze to control stranded costs and prevent them from affecting the P&L,' he said.
While offering reassurance, Fernandez also mentioned that the food business split will be easier than before.
'We have done some important preparatory work in this regard. Now, nearly 80% of the food business's revenue comes from a separately operated entity, and the Food Solutions business is also a fully independent entity. In our top 24 markets, the food business has independent sales teams, and its production, regulatory, and R&D structures are also fully independent,' he said.
As expected, the integration of Unilever Foods and McCormick is expected to be completed by mid-2027. Foley revealed that when thinking about the business and advancing integration, the U.S., China, the UK, France, and Mexico will receive more attention because these are major markets for both sides, and the five markets contribute about 50% of the combined new company's sales.
Once integrated, this will create a 'new giant' in the food industry with annual revenue exceeding $20 billion. In the future, McCormick, as the main 'operator,' will focus on several key synergy opportunities, such as strengthening the foodservice business.
'McCormick's foodservice has strong capabilities in North America and also has strong influence and high penetration in markets like China, but we can still strengthen the Food Solutions business globally, and Unilever provides exactly that platform,' Foley said in yesterday's Barclays chat.
Boosting Health Business
If the food business is successfully spun off, Unilever will become a more focused FMCG company.
'Unilever has been criticized for years for being too complex and too slow, and I think that's very fair,' Fernandez said. After divesting food, Unilever will become a home care and personal care company with a leaner structure and clearer product lines.
According to the plan, Unilever will focus on four categories: Beauty, Wellbeing, Personal Care, and Home Care. Fernandez said that under this portfolio, nearly 80% of Unilever's revenue comes from 25 brands, with combined revenue close to €30 billion and a compound annual growth rate of 7% in sales and 4% in volume over the past three years.
Currently, many of Unilever's power brands are in personal care and home care, such as Dove, Vaseline, Comfort, Cif, Lux, Clear, and Pond's, as well as beauty and skincare brands like Hourglass and Dermalogica. This composition has led outsiders to wonder whether Unilever is trying to move closer to P&G or L'Oréal.
'I don't shy away from admitting I admire both companies, but we have our own path to follow,' Fernandez said. Unilever has a diverse portfolio, with a focus on driving premiumization in categories like home care, while also boosting premium beauty and health products, with the goal of achieving annual volume growth of over 2%.
He also clarified that Unilever's food split is not to free up funds for large acquisitions; organic growth and productivity improvements remain the primary investment directions. 'We are focused on driving organic growth and ensuring that we continue to shift the portfolio toward high-growth areas through bolt-on acquisitions, focusing on the U.S., India, Beauty, Wellbeing, and Personal Care.'
Regarding the Chinese market, Fernandez said Unilever is investing in several brands, including Dove, Vaseline, OMO, and Olly. At the same time, the company needs to build a premium product portfolio. 'It's neither too late nor too early to enter now.'
'The Chinese market is very important, and our operations there have improved significantly. We expect good performance this year,' Fernandez said.
As for the investment approach in key businesses, this has been validated in Unilever's latest acquisition.
Last week, the company announced the acquisition of Grüns for $1.2 billion (approximately RMB 8.2 billion). Grüns is a U.S. nutritional supplement company founded in 2023, mainly selling nutritional supplement gummies. Each serving is said to contain over 60 ingredients, including more than 30 organic fruits and vegetables, 21 vitamins and minerals, and 6 grams of prebiotic fiber, with daily gummy shipments reaching 10 million pieces.
Bloomberg commented yesterday that this move comes at a time when the supplement market is growing rapidly, with consumers, especially younger groups, preferring convenient forms like gummies.
Despite the industry's loose regulation and questionable product efficacy, Unilever's move aims to capitalize on the current gummy craze, hoping to replicate the success of previous acquisitions like Liquid I.V. and reshape its footprint in personal care and health.
As previously reported, the health business is a segment Unilever began building in 2018, with brands primarily acquired, including OLLY, Liquid I.V., SmartyPants, Onnit, Nutrafol, and Welly. Although its €2 billion annual revenue is not prominent within the company, it represents a new growth curve Unilever is betting on.
For the health business plan, Unilever currently adopts a 'deep segmentation' approach.
'I would rather dominate a niche than be weak in multiple areas. Liquid I.V. has over 40% share in powder hydration, Nutrafol has nearly 80% share in oral hair loss care, and OLLY has a similar dominant position in melatonin gummies.'
Fernandez said that in the health field, Unilever will continue to look for quality acquisition targets, but they must meet three conditions: be in a high-growth industry, have clear category boundaries, and be able to establish leadership.
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- Author: 潘娴
- Published: 2026-04-22
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