The synergy lies in sales and marketing, not production.
They've amassed their portfolio by slowly buying up local producers and their brands, and keeping the production facilities. There might be some synergy to be had by letting former separate production facilities learn from each other.
However, almost all of their products are sold in grocery stores, and there has to be enormous efficiencies there by newly acquired brands getting into a large existing distribution network. Instead of each product being distributed and marketed separately, Unilever can simply dump a couple of pallets of all their goods at once, and they can easily introduce new products by just dumping it on the grocery stores complete with marketing materials as part of a normal delivery.
> Instead of each product being distributed and marketed separately, Unilever can simply dump a couple of pallets of all their goods at once, and they can easily introduce new products by just dumping it on the grocery stores complete with marketing materials as part of a normal delivery.
Is that how it works? I always assumed grocery stores give shelf space to what they themselves pick, not "whatever you multinational corps want us to advertise today". (?)
Depends on the grocery store and how large of a player it is, and how well it thinks it can anticipate consumer demand, and cross-market across the entire store, etc. Both the distributor and the grocery stores have sales figures for the products, per-store, so it's a matter of who is best at crunching the numbers.
When I used to live in Stockholm, my closest grocery store was one of the big two chains in Sweden, and they had "outsourced" part of their shelf re-stocking to the distributors, so if you went there in the mornings, you could have one or two people from a big bread producer/distributor restocking half the bread section, and you'd have someone from a different producer/distributor doing half the candy section (probably someone from Mondelez). I don't know this for sure, but I would bet that the distributor had a lot of leeway on how to restock the shelves using their own sales data.
Right now, my local Safeway has a bunch of shelves of deli products, but it's all Boar's Head products. Five bucks says that Boar's Head is choosing how to stock those shelves, and not Safeway. They also sometimes have a little floor display promoting new products from Boar's Head, that's also something that the local Safeway didn't do, they were just served up with some ready-to-go marketing, and they're okaying it.
Also, you have to keep in mind the relative size of the players.
If the grocery store is small, and Unilever, for example, is responsible for 10% of the inventory, but they're not happy with what the store is doing, it's probably really easy for them to say "Our delivery trucks only come every other week now, because you're not profitable enough. But, hey, if you let us decide what you should stock, the trucks will be there exactly when you need them."
It's not just grocery stores, it's a lot of retail. Manufacturers of some products literally rent shelf space and provide the product for those shelves. The store doesn't own the product, the manufacturer does. The store just takes a cut of the sale price, provides checkout services, space, attracts customers, etc.
One of the most obvious places this happens is at Home Depot. The tools department is almost entirely manufacturer-rented. If you buy a drill or such and take it apart you'll find that the anti-theft magnetostrictive tag is actually inside the tool, not just stuck on the box!
They've amassed their portfolio by slowly buying up local producers and their brands, and keeping the production facilities. There might be some synergy to be had by letting former separate production facilities learn from each other.
However, almost all of their products are sold in grocery stores, and there has to be enormous efficiencies there by newly acquired brands getting into a large existing distribution network. Instead of each product being distributed and marketed separately, Unilever can simply dump a couple of pallets of all their goods at once, and they can easily introduce new products by just dumping it on the grocery stores complete with marketing materials as part of a normal delivery.