Unilever has set out plans to make €1 billion in productivity savings by 2029 amid a major organisational restructuring as it continues the sale of its food business.

The bulk of the savings will be made by addressing €400 to 500 million of stranded costs associated with the $44.8 billion sale of its food business to McCormick, agreed earlier in the year.

It will seek a further €500 to €600 million in cost savings through its corporate restructuring, which will streamline the company into six regional units across three categories: Beauty & Wellbeing, Personal Care and Home Care.

The UK-based packaged goods giant said that these categories will share a demand creation model, common science and technology foundations, and routes to market.

Regional units will still be responsible for commercial operations, supply chain and marketing, it added, with the transformation grounded in its marketing and growth model Desire at Scale.

The restructure will be implemented throughout 2027, with completion expected after it finishes the food group sale. The firm added that it expects this to take place in mid-2027.

On 28 October, Unilever that there has been progress on obtaining regulatory approval, adding that closure is also predicated on McCormick shareholder approval.

In a statement, Unilever chief executive Fernando Fernandez said: “Unilever is becoming a sharper, more focused home and personal care business, with power brands and a global footprint that provide significant opportunities for growth.

“Through Desire at Scale, we are elevating our brands, bringing together better innovation and execution excellence. Our new operating model will combine a centralised global strategy with excellence in local execution, aiming for portfolio convergence and simplification, leveraging our market leading brands and premium digital disruptors.”

In its third quarter results, published last week, Unilever reported underlying sales growth of 5.2 per cent and a 6.7 per cent year-on-year rise in turnover to €13.3 billion.

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