Unlocking brand portfolio growth

In this episode, Adam and Laura welcome back Julian Gomez to the podcast to discuss portfolio strategy, focusing on his extensive experience as CMO of Unilever’s beauty and personal care business. The conversation deep dives into the importance of creativity and passion in building successful brands, how internal politics and emotions affect strategy, and the critical balance between logic and magic in decision-making.

For further reading on brand portfolio, check out: 

Why your portfolio could be getting in the way of your growth ambitions

Seven success factors for brand portfolio growth

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Transcript

Adam: This is the Persuasion Game, the Forge’s podcast all about the art of persuasion. Each episode we connect with marketers, business leaders and beyond to learn how they use persuasion to influence their customers, convince their stakeholders and drive their businesses forward.

Adam: Hello Laura.

Laura: Hello, how are you?

Adam: Very good thank you. Great to have you back.

Laura: Yes, I was listening with envy on the last one.

Adam: Well we’ve got Julian back today so that’s exciting — you get to talk to him today.

Laura: Excellent.

Adam: And today we’re talking all about — now don’t turn off if you’re listening —

Laura: this is going to be really good.

Adam: We are talking about portfolio strategy. And as much as it sounds like it might be in a marketing textbook, we’re going to be talking about it today with someone that’s passionate about it and has been managing one of the biggest beauty portfolios — Unilever’s.

Laura: Exactly. I think the fact that it’s beauty, the fact that it’s so dynamic, and the fact that Julian is as creative a thinker and strategist as he is, will mean it’s a really illuminating discussion. Let’s get into it.

Laura: During Julian’s 26 years at Unilever he led global and regional strategy, M&A and global brand expansion for Unilever’s beauty brands, before acting as EMEA and ANZ CMO for its €1 billion beauty portfolio. Having looked at this ever dynamic and expanding category from multiple different angles, he’s the perfect person to talk to us about creating and growing a winning portfolio. Welcome Julian.

Julian: Hello,

Laura: so great to have you here.

Julian: I’m happy to be here, thanks for having me again.

Adam: Welcome back — you’re the first returning podcast guest so congratulations.

Julian: Yeah!

Laura: So Julian, today we’re talking all about portfolio. You spent a long time at Unilever looking after the beauty portfolio. In your view, how high up a CMO’s agenda should setting the portfolio strategy be?

Julian: I think portfolio management should be a top priority for any CMO. At the end it’s about defining the way you are going to play with your different brands — your ammunition — in order to deliver the ambition that you have set up for your company, for your business. So I think it’s important that you are clear on what is the specific role that each of your brands is going to play in your strategy. And you need to be able to communicate that as well. So the sharper the strategy, the simpler it will be to communicate this with everyone — internally and externally, with your team, with your partners, with your investors. So portfolio management or strategy — I think it’s critical.

Adam: And there’s a sort of perception isn’t there that it’s actually one of the hardest things that you can do. Would you say that’s true — or if not, why does that myth prevail?

Julian: Well I’m not sure if it’s a myth, because in fact it can be hard. Because at the end, some people might have it super clear — “this is what we need to do, I have all the information, and even if I don’t have the information I’m making the bet because I have the authority to do it.” But normally speaking, sometimes you don’t have enough data, you need to play a bit with your gut feeling, you need to consider not just what is right for you at that moment in time but what is right for the future.

Some portfolio decisions are not only impacting your current or next fiscal year — they can impact the value of your business. If you think that maybe a brand is not playing any role anymore in your portfolio and you might need to dispose of or discontinue that brand, well, it’s not an easy decision. Also emotions — I think they are very important. Not just your own emotions, how confident you feel to make a decision, but also others’ emotions and points of view. Political games, right? At the end, we know that every single company — regardless of the size or the complexity — there’s a political discussion. Not everyone will have the same point of view.

But something I really like to help everyone understand is that strategy is not a democracy. Someone should make a call, and the rest just need to align as much as possible and execute it. So going back to your question — no, it’s not always easy or straightforward, because there are a lot of different elements from a rationality perspective and an emotions perspective that you need to consider.

Laura: I love that — “strategy is not a democracy.” I think that’s a really interesting way to cut through that challenge. And probably especially prevalent at Unilever, where not only did you have a huge multiplicity of brands but also really different strengths in different markets. So I can imagine brands sitting in a lot of different positions and people feeling very differently about which should be the hero and which should perhaps fall by the wayside. How do you manage that kind of internal politics?

Julian: Well you nail it. This is one of the day-to-day challenging conversations that any global company is having — local boys versus the global boys versus the regional boys. How to navigate that.
And I think you always need to think about what’s best for your company, for your brand and for your investors. You need to get to some commitments. Ideally, where possible, it is amazing to have global brands with global mixes. But that’s not always easy. There are some industries where it’s probably a bit easier — beauty is probably one of them. But then you have foods, which is totally different. You might have a global brand, but the local flavour, the local preferences — this is something that you need to consider. So it’s always about finding the right balance in terms of what’s best.

Laura: That’s interesting — that kind of cultural nuance of how much does that actually impact what you put into the market versus beauty, which you could argue is very personal but actually probably has some more universal needs.

Just thinking about beauty specifically — because that’s obviously your world of expertise — it’s a really challenging category isn’t it? It’s enormously competitive, and there’s probably a perception that more is more, there are so many different brands that could play different roles. Can you tell us a little bit about your beauty category experience?

Julian: Beauty is a very complex category, but it’s also a growing category. It’s true that it’s suffering a bit now, but there are always pockets of growth. And the point is that the category is expandable — because you will always have new consumers that you need to persuade, you will always have new needs, new formats, new benefits. So it’s always expanding.

I think the challenge from a portfolio perspective is that, especially if you have a big corporation, you might have more than one or two brands. So you need to be very choiceful on what you are going to do. Because — surprise — you cannot do everything. You cannot support properly every single brand in your portfolio, from an innovation perspective, from a brand building perspective. You need to have some prioritisation.

So going back to the initial conversation on strategy — you need to have clarity on what is the expected future for your business, where you think you can capitalise on growth. Then you need to check what’s the ability of each of the brands in your portfolio to capitalise on that future. Some brands are perfect and ready to win — these are the brands where you probably need to focus. But you might have some brands where the proposition is still relevant but there is a job to do on the storytelling — the how, where and to whom you tell the story. And sometimes they might not be relevant anymore, because they were designed to cover a need — functional or emotional — that is not a need of the future anymore. If you think about stock cubes or Bovril for instance, these are brands from the past. So you need to make sure that you evolve as your consumers are evolving. But the moment you see a significant gap from a proposition perspective, that’s where you are in trouble.

Laura: This is an interesting discussion about being prepared to let brands that were no longer relevant go. But that obviously creates a gap, and there are different ways to fill that gap in a portfolio aren’t there. Can you tell us a little bit about your experience of that?
Julian: Once you identify your opportunities to go, and the spaces where you want to go because the future is going in that direction — you need to understand if your current portfolio is fit to win, or if you need to acquire a brand for instance, or even to create a new brand. There aren’t many corporations building new brands these days because it’s quite resource-consuming, time-consuming and risky as well. And you don’t always have the right capabilities. That’s why a lot of corporations decide to acquire brands. In fact in the last 10 to 15 years we’ve seen a lot of different movements in the market — a lot of different brands in different industries being acquired, because this is a perfect solution. Once you identify the gap and you identify a potential brand that is doing the job and can do the job in the future as well — why not acquire it?

Laura: Obviously Unilever had a lot of brands with a lot of history. How did you balance that kind of need for old and new in your portfolio?

Julian: My personal view is that your brand heritage is your brand heritage — you just cannot delete it. It’s there. You just need to not reinvent the story, but find a new way to tell the story, to make the story relevant for your new consumers and to speak as much as possible their language. And even tell the story where it matters for them — to make it visual.

The story of a brand that was successful in the 80s but is not connecting with Gen Z — you cannot do the job from TV, telling the same story with the same tone of voice you were telling 40 years ago.

Laura: That was just a terrifying moment for me.

Julian: I know, I was shocking myself as well. But you are correct. Good Lord! But is that brand relevant anymore? Maybe it can be, but you need to translate your story to the language of Gen Z. And in the media of Gen Z — it might not be TV, it might be social. And probably it’s not even yourself telling your story, it might be a content creator. So I think you need to be able to understand where your brand is, but also to be conscious of what’s the effort to migrate your brand — not from a proposition perspective, but from a storytelling perspective — on the how, where and to whom you tell the story.

Laura: So we could have a Maxwell House playing out on TikTok with two creators just getting together over a cup of coffee years and years later. But just going back to beauty — we do know that people have really specific needs in beauty, and you can go down an absolute wormhole of layers upon layers of very specific needs. That can be seen as a good thing — people look for very specific variants, very specific product offerings. But how do you balance that with the understandable drive, especially from retailers and shareholders, to have fewer, bigger, better brands?

Julian: Yeah, you are right. Normally speaking, all customers are looking for ways of simplifying and making the portfolio they have in their stores a bit more efficient. But somehow I think that specifically in beauty they are aware that they need a broader portfolio, because it’s a more complex category. If you want to persuade the different shoppers, you need to offer them everything they might need.
But you really need to understand what the shopper is looking for in your store — what’s the shopper mission. If they are there to discover, or if they are there just to buy quick and fast — in fact, this is probably content for another full episode: shopper missions and how to connect strategies and portfolios in store.

But still, the challenge for all the brands is about making efficient whatever you have. And for big corporations, that’s again about the choices in portfolio. You might be lucky and have a brand that has the power and the ability to connect with different target audiences and can offer all the solutions for all the needs. Let me put an example in face care — L’Oréal or Nivea. These are very generic brands — they are engaging with different target audiences from an age perspective but also from a face and skincare needs perspective. But it’s not the case for all brands. So then if you are the owner of different brands, you need to understand if they are generic or very niche or very specific, and you need to play with that in order to make sure you have the best portfolio to compete today and in the future.

Adam: Can I ask you a question about customers and retailers? It’s a question I’ve wondered for a while. Is it a benefit to have — in the case of Unilever, say in deodorants — three big brands like Axe, Rexona and Dove taking up more shelf space and therefore getting more eyeballs on Unilever products? Or is it better being a Nivea with one product on the shelf at that time? What’s the sort of balance there — fewer bigger better, or more opportunities to be bought in that moment?

Julian: I would say it depends on what your ambition is and what your strategy is. Also, we tend to think that in the case of Beiersdorf they only have Nivea — but no, they have Nivea, they have Labello, they have Atrix. So they have a portfolio of brands, but it’s a bit more focused on one specific category, playing at different price points and targeting different consumers.
In the case of Diageo or Unilever, that’s pretty similar as well. You are having different brands targeting specific audiences, also at different price points — because you have Dove which is a bit more premium, then you have Rexona, then you have Axe which is a bit more male-oriented. So I guess it depends on your ambition, it depends on your portfolio choices. Sometimes you might think that with just one brand you are able to capitalise all the potential. Sometimes you might need two or three. And if you’re lucky and you have four or five and you can support them — perfect. But yeah, that’s quite difficult.

Laura: One thing you were saying about categories — I started thinking about how, as you look at health and wellbeing, conflating categories like deodorants start to get very close to skin care. And in fact you kind of enter a bit of an interesting mix where you’re not even saying “oh, this is my beauty category and this is my deodorant category” but this kind of hybrid world where ideally your brand is present everywhere. But it can also create a bit of competition even between categories, I would guess.

Julian: Yes, right. So that’s one of the challenges for the marketeers responsible for all these different categories — they can easily overlap each other because the boundaries are blurring. The benefits of a shower gel under a brand like Dove are quite high, right? So people might choose A or B. Of course the challenge and the creativity of the marketeers is to make sure that you convince them that no, in reality, they need A plus B plus C.

Laura : Welcome to capitalism.

Julian: Welcome to capitalism, welcome to marketing. At the end it’s about making sure the customers or consumers are aware about their needs, and you offer them your best solution. You can solve the pain they have.

Laura: But that’s a really interesting challenge isn’t it — where you think not only am I having to think about multiple potential different brands, but I’m also having to think about how to be additive across categories. So yes, the shower gel works, but then the skin care afterwards works in complement to what I’ve just offered you.

Julian: But yeah, it’s a challenge but it’s also a positive challenge, because it sparks your creativity. I would not call it internal competition, but sometimes you need to think — okay, if my colleagues in that specific category are offering the same benefit I’m offering in my category, what am I going next? What is the new rationale, the new reason why, I’m going to give the consumers to make sure that they will use a shower gel but also a body lotion?

Laura: What I love about what you’re saying there is — I remember when I was a very junior brand manager, your KPIs are based on the success of your brand, and it can be tempting to look at another brand in the same category and be like “why have they got this benefit, we should have it” — almost feeling like you’re at war with each other. But I think what you’re saying is everyone has a job to helicopter up a little bit and look at how you can be additive across a portfolio, rather than just how can I win as my brand.

Julian: Yeah. And let’s not forget something which is critical — you need to have the internal discussions on what’s the right strategy for the group, what are the spaces that you want to occupy, because you need to join forces. But it’s true that in some companies in some specific moments in time, they might not have the conversations they need. And that’s why sometimes you see master brands that are struggling, or launching different messages depending on the category where they are communicating.

Adam: And then the other layer that’s so interesting about beauty is that people’s needs change over time. You know, it could be that you grow up for a long time — what you like in a food category is obviously informed by culture, but you’re not suddenly going to change your palette when you hit your 40s. Whereas, surprise surprise, your skincare regime is probably going to change quite a lot. How do you play a portfolio well to kind of address the fact that you might potentially lose some consumers purely because of the life stage they’ve moved into?

Julian: Yeah, indeed. The category is very dynamic and the consumer needs are evolving as the consumer is evolving. You don’t have the same face skincare needs when you are a teenager as when you are a senior. When you are a teenager you might be obsessed by acne or oily skin. When you’re a senior — well, your main obsession is with wrinkles. And the list is much longer.

But yeah, consumer needs are different. Not all the brands have the power to be a companion for a consumer from their teens to their 50s. Few brands might be able to — L’Oréal can do it, right, they’re the number one beauty brand. But beyond that, other brands need to make choices: what are the specific consumer needs I want to address, what are the different audiences I want to address, what are the right moments for me to engage with them? And you need to recognise that yeah, you might lose some customers, some consumers. But that’s why you need to be focused and always be reminding yourself what Byron Sharp is always reminding us — you need to continuously build penetration.

Laura: But what about brands like Drunk Elephant, where there’s been a very overt attempt — you could say they’ve done the Byron Sharp playbook — they’ve gone “we know who’s growing, let’s go after that audience.” But it sort of feels like perhaps it hasn’t quite landed in the way that they imagined. Although maybe they’re very happy with it.

Julian: Yeah, I mean, maybe they are already happy. But based on the conversations we’ve been seeing on social and elsewhere — it looks like maybe they were running too fast. Let’s not forget Drunk Elephant has been there for what, 10, 15 years? Not that long. So I think they tried to build penetration with the new generations — Gen Z — because they are quite engaged with the category, with beauty and skincare specifically. But maybe the way they were changing — not their storytelling but the tone of voice — or maybe they missed really understanding their core consumer’s willingness for them to go too fast. And maybe they weren’t being clear about what was their tone of voice.

Laura: I think it’s such an interesting example. I read a meme the other day which said “why are the people that want to go to bed putting the people that don’t want to go to bed to bed?” — talking about people with young children. And it feels a bit like that with Drunk Elephant — where it’s like “why are the people that have a lot of skin needs spending money on the people that don’t have any skin needs?” You know, it’s like the double resentment of the parent having to buy something for the kids when they just don’t need it.

Julian: Yeah. And the point is that sometimes as a brand, or as a marketeer, you feel yourself in the obligation of jumping — you see the opportunity. And that’s why I’m always going back to the strategy. Was there strategy in transferring from a more senior consumer to a teenager consumer? Because let’s not forget Gen Z and especially the target audience that Drunk Elephant was talking to — were teenagers. Are you sure this is your most strategic move? Of course you want to keep recruiting the younger generations. But maybe without sacrificing your storytelling and your tone of voice.

Adam: I think it goes back to your point about channels as well — maybe there was a lot of excitement about channels like TikTok as a new way of telling stories, but there wasn’t necessarily a thought about how strategically does that ladder up to the way we position ourselves.

Julian: Yeah, yeah. And at the end you need to make sure that everything you do as a brand is coherent — coherent across the different touchpoints with a consumer or shopper — but also consistent over time.

Laura: I suppose the interesting thing as well is that I think in beauty, people feel very emotionally attached to brands that they feel work. So there’s almost a sense of — repulsion is too strong a word — but rejection or frustration.

Adam: “Why have you abandoned me at my —”

Laura: You know, that sort of feeling. And perhaps that’s why this conversation has played out as much as it has in this category.

Julian: Yeah, probably. And again, in the case of Drunk Elephant, some consumers were putting their faith and their hope in that specific brand because they thought “this is going to work for me.” The moment they are addressing teenagers — well, they don’t have the same skin. They have a different skin. So then I can understand that some consumers started to think “well, if they are the best brand to address the teenage skincare needs, they might not be the best brand for me, because they have a very different skin.”

Adam: Quite right. So just zooming back out to the wider world of FMCG — we hear a lot about the squeezed middle, where there are lots of brands in the kind of middle of portfolios that are losing market share or losing customers. But the premium brands and some of the value brands or own-label brands are potentially doing quite well. So what’s your perspective on that, and is there a kind of shift in how you would want to set up your portfolio for growth?

Julian: I think again this goes back to the point of what’s going to succeed in the future. Somehow you need to do your best in understanding where your consumers are going, what are the needs that they might have in the future, and make sure that you can play that game — that you are going to be able to connect with that future consumer and address the need they might have. If you miss that understanding, you might be a bit lost. And then that’s when you start to be squeezed in the middle.
Also because, as you said, there are a lot of private labels and value brands that are doing quite well — the main driver potentially being distribution and price. But if you want to win in terms of value and in terms of volume, you need to do something a bit more creative.

So the premium brands are growing, but also there are a lot of niche brands that are joining. And why is that? I think it’s because they are in their sweet spot. They’ve been able to understand where the consumer is going and they are focusing their efforts — their creativity, their resources — and they are also very passionate about what they are doing. Something that perhaps in the middle, and in some cases the brands at the top, they are missing. Because the market is not growing — and this is partly because the brands at the top are not doing the right job in stimulating demand. If you want to stimulate demand, you need to be a bit more creative and you need to be passionate about what you are doing.
So if I need to summarise it — I’m sure that every single brand that is as creative as they can be and as passionate as they can be is winning.

Laura: You raised such a good point there. Because it’s a bit like luxury fashion — in beauty you can have a hero product that is absolutely front and centre of the whole brand proposition. I know every single brand talks about their hero product, but really — people will care passionately. Let’s say Erborion — when they talk about their CC cream, they use that to ladder to all sorts of associations that can then extend into skincare and cleansing and moisturising. But it’s often rooted in this deep credibility of one product. And that’s a lot harder to do when you’re a well-established brand with mass distribution and potentially a lot of different SKUs.

Julian: Yes, I think it’s challenging, because it is doable. It depends on how much time you have to be creative. I mean, the other day I was having a really good conversation over lunch about what is the available time that marketeers have these days to be creative, to think — because you have a lot of internal processes, a lot of bureaucracy, a lot of conversations. But you don’t have time to think. And marketing is about creativity — and not only the creativity that you are empowering others to do on your behalf. It’s also about the creativity that you need to bring to life. And not just thinking about “what’s the next campaign idea?” — but what’s the right strategy. Defining strategy is about creativity as well, because you need to think. You need to be visionary. No one is Nostradamus. Because no one is going to tell you that’s how the future will look — “let me decide what to do.” No. You need to guess what the future will look like, you need to understand where your consumers and customers are going.

Laura: What sources would you tell people to look for in terms of that inspiration about where things are evolving to? Because it is so hard to get that external perspective. But as you say, it’s so critical to shaping your thinking about where the category might be going. What tips would you give to people listening?

Julian: They can connect with the Forge. Just saying —

Laura: end of podcast.

Julian: No — I mean I’ve always been obsessed with being externally oriented, which is something that everyone’s been told and everyone keeps telling everyone. But we don’t allow ourselves the time to do it.

But stay aware about what’s happening around you. Find your sources — depending on the industry where you are, the sources might be different. Try to understand the macro politics — what’s happening in the world. And then the micro. And even think not only about what’s happening now but what will happen in the future. I mean — think about the evolution of the age pyramid. Clearly in the future we will be a much more senior population. Despite Gen Z being here and quite strong and quite vocal — they might be a minority in the future. So you need to understand: should I find a way to engage with the seniors? Should I find a way to engage with the juniors?

Talk with people. And even if you don’t have time to talk with people — just follow them on social. Social is an amazing window to understand what’s happening in the world, in your industry, for your consumer. Try to even follow people that yourself would perhaps not follow, because you don’t sympathise with them or they don’t have anything relevant for you — but they might have it for your consumer.

Adam: And finally Julian — you’ve talked previously about the importance of both logic and magic when setting strategy. Can you just share a little bit more about that?

Julian: Yeah sure. I think from my perspective — not just when defining your portfolio strategy, but for nearly everything — you always need to balance the logic and the magic. The logic is everything that is fact-based, process-oriented, a bit more rational. Magic is about the emotions, it’s also about the creativity, it’s also about the human connection.

So in terms of portfolio — logic is about having the data that will give you sufficient insights to make a decision. It’s also the possibility to estimate the impact from a financial perspective of some of the decisions. Magic is more about how you deal with the emotions of the people involved in decision-making or in the execution of the decisions. This is always for me the balance between these two elements. At the end it’s always linked back to the brain and System 1 and System 2. So for every single decision you always need to consider both.

Laura: Fantastic. We’ve really enjoyed this. I didn’t know portfolio could be so creative, so thank you so much for inspiring us.

Adam: Yeah, thank you.

Julian: Thank you both.

Laura: So Adam — even more pearls of wisdom from Julian there. What was your takeout?

Adam: Well first of all we’re so lucky to have him on this podcast. His experience is really shining through in what he’s done in building those brands.

Laura: And the most thoughtful guest —

Adam: and well prepared, we must say as well. Look, I really loved how many times he talked about creativity and about that very human skill of being able to take the time to think through a problem, come up with a solution and work out what it is you’re going to be doing and how you do it. And there’s no real substitute for that in this time-pressured world that we live in. You can’t shortcut that particular bit of it. So that I think is really important — a really key learning. For me — I love “strategy is not a democracy.” I mean,

Laura: I love anything not being a democracy, apart from politics.

Adam: But it’s so true — you can’t crowdsource a strategy.

Laura: It’s about accountability, about “this is how we’re going to get consensus, these are the big bets.”

Adam: Yeah

Laura: And on that note, I thought what was really inspiring about hearing this from him was — as you say — creativity, but also the future-facing nature of it. That this is really about imagining future scenarios that people are going to be playing with and then placing your bets accordingly.

And I think the other thing that was really interesting was — I guess I’d always seen it as brand versus brand. But actually Julian took it a step further and said “look, the way things are evolving — you need a category additive strategy. You could have your skin care sitting alongside your skin cleansing, and that is not a distinction a consumer is making. They’re actually seeing all of these needs as kind of interrelated.” So you really need to think holistically about how all of your brands in all of your categories are playing an additive story where you keep buying more. That’s a big challenge but it’s a fascinating and very motivating one for marketeers.

Adam: Yeah. And I think it’s really motivating — that point he made about how any brand at any point in the price hearing can do it if they’re close enough to the consumer and passionate enough about the needs, understanding enough about the journey the consumer is on and what they’re trying to solve. Any brand within that portfolio can grow. So I think it’s really really exciting and quite inspiring to listen to him talk.

Laura: Great stuff. See you soon.

Adam: See you soon.

Adam : Thanks for listening. If you’d love to hear more from marketers, entrepreneurs and business leaders about how to use the art of persuasion to drive your business forward, then make sure you’re following the podcast in your favourite podcast app. And just one last ask from us — this is a new podcast and we’d love it if you could be persuaded to help us spread the word by telling somebody else about it, leaving us a review, or even better sharing an episode on social media. Search The Forge on LinkedIn.