Unilever Partners with Google Cloud, Unveils 'Desire at Scale' Strategy at CAGNY 2026

February 17, 2026 · by Fintool Agent

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Unilever unveiled a landmark five-year strategic partnership with Google Cloud and laid out its transformation playbook at the 2026 Consumer Analyst Group of New York (CAGNY) Conference in Orlando today. CEO Fernando Fernandez, presenting at CAGNY for the first time since 2022, declared the company has reached a "clear inflection point" under refreshed leadership, with 8 of 10 board members and 9 of 11 executive leaders now new to their roles. 1

The stock closed at $73.66, down 1.0% on the day but trading near its 52-week high of $74.98—a 20% gain from its 52-week low of $61.17.

The Google Cloud Partnership: Preparing for Agentic Commerce

The headline announcement came hours before Fernandez took the CAGNY stage: a five-year deal with Google Cloud to build what Unilever calls an "AI-first digital backbone" for the entire enterprise.

"Technology has moved to the core of value creation at Unilever," said Willem Uijen, Chief Supply Chain and Operations Officer. "As brands are increasingly discovered and chosen in environments shaped by AI, we must lead this shift."

The partnership focuses on three pillars:

1. Agentic Commerce & Marketing Intelligence: Building next-generation capabilities across brand discovery, conversion, and measurement as consumer journeys shift toward conversational AI assistants

2. Integrated Data & Cloud Foundation: Migrating key enterprise applications and data platforms to Google Cloud, creating a connected environment for scalable AI deployment

3. Advanced AI: Deploying Google's Vertex AI platform and Gemini models to accelerate R&D cycles and enable agentic workflows across business processes

"In the future, the consumer journey of discovery and shopping will be more conversational, will be done with much more presence of agents," Fernandez told investors. "This collaboration will help us in our marketing, but also in our modeling simulation in R&D, in order to shorten the innovation cycle significantly." 5

The deal follows Google's recent agentic shopping partnerships with Walmart and Target, signaling a broader industry shift.

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Portfolio Transformation: Beauty First, Volume-Led

Fernandez outlined a fundamental reshaping of Unilever's €51 billion business toward higher-growth, higher-margin categories:

"The times of Unilever buying a soap company in Colombia or a food company in Egypt or a home care business in Vietnam are gone," Fernandez declared. "We will concentrate the capital allocation of Unilever in building a portfolio for the future in the U.S. that can travel internationally." 5

The company has rotated 15% of its portfolio in the last year, including completing the Magnum ice cream demerger in December—a business Fernandez described as having "very low level of complementarity with our current portfolio." 6

Financial Profile: Record Margins, Strong Cash Returns

The transformation is delivering measurable results:

*Values retrieved from S&P Global

Gross margin expansion of 460 basis points over three years has been strategically deployed: two-thirds reinvested into brand marketing (now 16% of revenue), one-third flowing to the bottom line to reach a record 20% operating margin. 9

"If you compare with some of the HPC players in our space... they are significantly above us, and we really believe that we continue having significant scope in our gross margin to go up," Fernandez noted. 10

Return on invested capital stands at 19%, "definitely the top third of the sector." 11

'Desire at Scale': The Execution Playbook

Fernandez introduced "Desire at Scale" as Unilever's operating mantra—a framework for elevating brands through disruptive innovation and flawless execution.

The SASSY Framework drives product development:

• Science: 4,500 scientists, 500 PhDs, €1 billion annual R&D spend 1
• Aesthetics: Premium packaging redesigns across the portfolio
• Sensorial: Elevated textures and fragrances (€100 million fragrance house investment) 2
• Said by Others: Social validation and creator-driven marketing
• Young Spirited: Cultural immersion and contemporary brand positioning

Social-First Marketing has scaled dramatically:

• 300,000 content creators working for Unilever globally (180,000 in Beauty alone, up from 75,000 last year) 3
• 7x increase in content assets in Beauty division 4
• 2x increase in posting frequency 5
• Average video lifespan: 4 days 6

"The times of lazy marketing, a couple of ads a year for a couple of innovations, are gone. Marketing today is hard work," Fernandez stated. 7

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US Business: The Proof Point

Herrish Patel, Head of US operations, presented the US business as validation of the strategy. Key highlights:

• 4%+ volume growth for three consecutive years 1
• 77% of US revenue from Personal Care, Beauty, Health & Wellness (vs. 51% globally) 2
• $15 billion capital deployed in US over five years (M&A + supply chain) 3
• Dove franchise: $3 billion, double-digit volume growth in 2025 4
• 25% growth on platforms like Walmart.com and Amazon 5

"In Q2, this company, Unilever USA, will launch its biggest activation that it's ever done in the history of the US," Patel announced, referring to a FIFA World Cup 2026 campaign spanning deodorants, haircare, and skin cleansing. "Every single retailer is with us." 6

The Dove transformation exemplifies the SASSY approach:

• Bio-protein technology in haircare (10x hair strength)
• Nanoemulsion in skin cleansing (4x moisturization)
• Strategic partnerships with Crumbl and Bridgerton driving 30% Gen Z new-to-brand penetration 7

India: The Exponential Growth Opportunity

CFO Srinivas Phatak presented India as Unilever's second growth engine, calling it "probably the biggest exponential growth opportunity that you can find in the world now in terms of potential volume growth." 8

India metrics:

• €7 billion revenue, second-largest operation 9
• 85% of business holds #1 market position 10
• Hair: 55% share (3.5x nearest competitor)
• Skin cleansing: 37% share (2.5x nearest competitor)
• Dish: 51% share (4x nearest competitor) 11
• Quick commerce: 3% of revenue, growing 100%+ 12

"Our profitability in modern trade is higher than our profitability in general trade. Our profitability in premium is higher than our profitability when it comes to mass. So as consumers continue to move up, we are actually very well positioned," Phatak explained. 13

The Minimalist acquisition was highlighted as an example of organic capital deployment to fill portfolio gaps in India's premium segment. 14

Organizational Overhaul: Leaner and More Accountable

The transformation extends to Unilever's organizational structure:

• 17% white-collar workforce reduction since March 2024 15
• 50 basis points overhead improvement in 2025 16
• Differentiated rewards: Only 55% of employees receive annual bonus between 80-120% of par (down from 90%), with 45% below 80% or above 120% 17

The company now operates through five P&L pillars: four business groups (Foods, Home Care, Personal Care, Beauty & Wellbeing) covering 85% of revenue in the top 24 markets, plus a "One Unilever" organization for markets 25+ that grew 5.2% with 250+ bps margin expansion and 35% less headcount. 18

"Being consciously uncompetitive is a criminal act," Fernandez told employees in a recent town hall. 19

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2026 Outlook: Bottom of Guidance Range

Management guided to:

• USG (Underlying Sales Growth): 4-6%, likely at the bottom of the range given "relatively soft" markets 1
• UVG (Volume Growth): 2%+ 2
• Margin: Modest improvement 3
• Share buyback: €1.5 billion starting Q2 4

Consensus estimates project:

*Values retrieved from S&P Global

"We see markets as relatively soft. That will require that we outperform market as we did in 2025, but we are very confident that we can do it," Fernandez stated. 5

What to Watch

1. Q2 FIFA Activation: Unilever's "biggest activation in US history" will test whether the Desire at Scale model can drive step-change volume gains across multiple categories

2. Google Partnership Milestones: Look for early announcements on AI-powered brand discovery tools and R&D acceleration benefits

3. India Quick Commerce: With 100%+ growth from a 3% base, trajectory here could accelerate the India anchor market thesis

4. Gross Margin Progression: Management sees runway above current 45% level—watch for continued reinvestment vs. flow-through decisions

5. M&A Pipeline: With €1.5 billion annual bolt-on budget focused on US premium plays, acquisition activity could accelerate the portfolio shift

Related Companies: Unilever · Alphabet/google · Procter & Gamble

Conference: CAGNY 2026 - Consumer Analyst Group of New York, Signia by Hilton Orlando Bonnet Creek