Unilever Tried to Give Mayonnaise a Purpose. A Shareholder Called It Losing the Plot.

In January 2022, one of Unilever's largest shareholders read a sentence he could not unsee. Somewhere inside the company, someone had decided that Hellmann's — a jar of mayonnaise — needed a purpose. Terry Smith of Fundsmith, sitting on roughly £888 million of Unilever stock, put it in his annual investor letter with the bluntness of a man who had run out of patience: a company that feels it has to define the purpose of Hellmann's mayonnaise 'has clearly lost the plot.'³ It was a one-line demolition of a doctrine the company had spent years building. And the remarkable thing is that, within a few years, Unilever quietly agreed with him.

The official story is that purpose was Unilever's growth engine — that brands with a social mission grew faster, and the data proved it. That isn't what the record shows. Purpose was never the engine. It was a reputational moat that drew investor fire, forced two strategic U-turns, and finally gave way to a hard-nosed Power Brands playbook. The thing Unilever sold as an operating system was really a brand-marketing claim that couldn't survive being audited.

The data nobody could see

Here is the claim that started the fight. In January 2020, CEO Alan Jope told the world Unilever had 'extremely strong data' linking purposeful brand communications to both short- and long-term growth, and committed more marketing spend to 'explicitly purposeful' messaging.⁴ It was a confident, falsifiable assertion: purpose drives growth, and we can prove it. The trouble is what came next, or rather what didn't. The underlying dataset never appeared in the statutory filings. There was a conclusion without a workbook.

Smith's objection was not that purpose is bad. It was sharper and harder to dodge: linking purpose to brand growth, he argued a year later, 'confuses correlation with cause and effect.'¹⁰ Purposeful brands might grow faster because they were already the strongest, best-funded brands in the portfolio — the purpose riding along with the investment, not causing the growth. That is the kind of error a controlled study is built to catch, and no such study sat in the primary record. So you had a doctrine — invest behind purpose, across the portfolio — resting on an outperformance claim that could not be independently checked. A doctrine built on a number nobody else could see.

Why a moat looks like a target

The purpose doctrine did real defensive work, and that is exactly how it became a liability. A company with a loud social mission is harder to attack as a soulless commodity machine — and Unilever knew how an attack felt. In February 2017, Kraft Heinz arrived with an unsolicited approach, valued at roughly $143 billion with an 18% premium, the kind of cost-cutting roll-up that strips a business to its cash-generative core.² Unilever's board rejected it inside 48 hours, finding 'no merit, either financial or strategic,' and Kraft Heinz withdrew before any formal tender offer was ever filed — the whole episode lives in a single SEC withdrawal notice, not a hostile-bid document.¹ The lesson management drew was that a brand built on standing for something is a fortress against the spreadsheet.

But a moat that runs on visible virtue has a structural flaw: the more loudly you advertise the virtue, the more conspicuously you're not advertising the returns. The same purpose talk that fends off a corporate raider invites a different predator — the activist shareholder who reads 'sustainability credentials' as a polite phrase for 'not minding the shop.' Smith's letter wasn't an attack on Unilever's values. It was the moat working in reverse: purpose had become so prominent it was the first thing a critic could point at. The wall built to keep one kind of investor out was the same wall that drew another kind in.

Two U-turns, dressed as continuity

Watch how a doctrine dies in a large company — not with a confession, but with a reorganisation. In July 2022, Unilever announced the Compass Organisation, splitting itself into five Business Groups: Beauty & Wellbeing, Personal Care, Home Care, Nutrition, and Ice Cream. It was still framed in the language of purpose, a 'purpose-led, future-fit' structure.⁵ The vocabulary survived; the architecture began to change underneath it. Then in October 2023, incoming CEO Hein Schumacher introduced the Growth Action Plan and the pretence dropped. The new unit of attention was 30 Power Brands — about 75% of group turnover — judged on 'unmissable brand superiority' and multi-year innovation, not on a purpose statement.⁶

Notice what the Power Brands framing concedes. It segments the portfolio by investment and performance, not by purpose. There is no longer a company-wide mandate for every brand to stand for a cause; there are fewer brands, funded harder. That is the exact inverse of the Jope-era instruction to push purpose across the whole portfolio. Unilever never published a retraction of the outperformance claim. It simply stopped making it and changed the scoreboard — which, for a public company, is the loudest admission available.

The reframing wasn't just cosmetic — it was followed by numbers. Under the Growth Action Plan, full-year 2024 underlying sales grew 4.2%, with the Power Brands up 5.3%; gross margin expanded 280 basis points to 45.0%, the highest in a decade; and brand and marketing investment climbed to 15.5% of turnover, also the highest in over a decade.⁷ The doctrine that was supposed to deliver growth got quietly retired, and growth improved. That is not proof purpose hurt the business. But it is the opposite of the case its champions made for it.

But wasn't the critic just allergic to values?

The fair objection is that this reads like a victory lap for a cynic — that Terry Smith was a short-horizon investor hostile to anything that wasn't next quarter's margin, and that purpose-led brands genuinely do build durable equity. Both halves of that are partly true, and they don't rescue the doctrine. Purpose absolutely works at the brand level: a brand whose mission is authentic and specific can earn loyalty no discount can buy. The error was never purpose itself. It was the leap from 'this brand authentically stands for something' to a company-wide mandate that every brand must, and here is the proof — proof that, conspicuously, never made it into a filing.

And the recalibration that followed was not a bonfire of values. Schumacher's plan reset specific measurable targets rather than torching the framework; the company kept its sustainability commitments while recalibrating specific targets to more achievable milestones. The point isn't that purpose is fake. It's that purpose is a brand-level claim about authenticity, and Unilever tried to operate it as a portfolio-wide growth thesis. One of those is defensible. The other is a slide that asks you to take the data on faith. The strongest read isn't that purpose failed — it's that purpose was misclassified as strategy when it was really brand craft.

Even Unilever's successor strategy carries the same tension. Under Fernando Fernandez, who took over as CEO in March 2025 after Schumacher's reset, the company is chasing a 'social-first demand model' — pivoting a large share of media budget toward creators while still committing roughly $9 billion to brand and marketing in 2025, around $4 billion of it in traditional channels even after the shift.⁸⁹ The instinct to declare a sweeping new operating doctrine, then keep doing the old thing at scale underneath, has not gone away. It rarely does.

Unilever spent the better part of a decade insisting its brands needed a purpose, then quietly rebuilt itself around which brands made money. The doctrine didn't fail because purpose is worthless. It failed because a fortune in goodwill was bet on a single unproven sentence — that purpose causes growth — and the sentence was never allowed to meet the data. The mayonnaise never needed a mission. It needed to be the best mayonnaise on the shelf, funded like the company meant it. That, in the end, is the purpose Unilever rediscovered.