The drum beat of calls for change from investors in food to household goods conglomerate Unilever (ULVR) seems to be growing louder by the week if not by the day.

The Financial Times reported over the weekend that after the firm’s failed £50 billion bid for GlaxoSmithKline’s (GSK) consumer health business, two major shareholders are demanding a shake-up.

German absolute return investor Flossbach von Storch, a top 10 shareholder in the Anglo Dutch concern which prides itself on ‘investing robustly’, has reportedly told Unilever management it should break the business up into three separate divisions, beauty, food and household products.

Meanwhile, an unnamed shareholder – believed to be amongst the top 20 investors in Unilever – has asked management to replace the current chairman Nils Anderson with someone from outside the board.

This follows the publication of a highly disparaging ‘post-mortem’ on the firm’s attempt to buy the Glaxo healthcare unit by long-standing top 10 shareholder Fundsmith, and the news that US activist firm Trian Partners, co-founded by Nelson Peltz, had taken a sizeable stake in the company.

Having engineered corporate change at Heinz, Proctor & Gamble and Cadbury Schweppes, where Trian pushed for the break-up the business, a move which eventually led to Cadbury being bought by Mondelez, Peltz has serious pedigree and is expected to attempt a similar transformation at Unilever.

According to fellow activist Bill Ackman, manager of Pershing Square (PSH), Peltz is ‘a thoughtful investor with good operating chops’. Others praise his ability to understand businesses and engage with management to bring about change, primarily by increasing sales and lowering costs.

In January 2022, Unilever presented its own plan to make it a ‘simpler, more category-focused business’, resulting in a loss of up to 1,500 middle management roles.

The new, more streamlined company will be built around beauty and wellbeing, personal care, home care, nutrition and ice cream.

Notably, food and refreshment was not mentioned as a key business area, which suggests pressure to restructure the firm is already having an effect.

Meanwhile, consumer and household goods rival Reckitt Benckiser (RKT) is reported to be weighing up options for its infant nutrition unit according to Bloomberg.

Chief executive Laxman Narasimhan has apparently been sounding out buyers informally for the division, which turned over around £3.3 billion in the year to February 2021 but has seen a sharp decline in its Chinese business.

Investors would likely breathe a huge sigh of relief if the unit were sold as it would finally draw a line under the disastrous $18 billion acquisition of Mead Johnson Nutrition five years ago by previous boss Rakesh Kapoor.

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