The great consumer goods reset: Why Unilever, Procter & Gamble, and Colgate are trimming portfolios in 2025

Why Are FMCG Giants Restructuring Their Brand Portfolios in 2025?

In 2025, three of the world’s most influential fast-moving consumer goods (FMCG) companies—Unilever (LSE: ULVR), Procter & Gamble (NYSE: PG), and Colgate-Palmolive (NYSE: CL)—are leading a sweeping reset of their global brand portfolios. Amid economic pressures, evolving consumer behavior, and structural inefficiencies, these household-name companies are refocusing their operations around a smaller number of high-performance brands while streamlining or divesting underperforming assets.

This strategic shift reflects a common goal: to simplify bloated product lineups, boost margins, and respond more nimbly to external shocks such as inflation, tariffs, and supply chain disruptions. Executives across the board have emphasized a sharper focus on category leadership, data-driven growth, and long-term shareholder value creation.

What Is Driving These Decisions Across the Consumer Goods Sector?

The restructuring wave has been triggered by a convergence of operational stressors and long-term industry shifts. Among them, persistent inflation across packaging and input costs, tariff exposures (especially in U.S.–China trade), and increasing promotional intensity across global retail channels have forced FMCG giants to rethink cost structures.

In parallel, consumer preferences have shifted toward cleaner labels, fewer SKUs, and trusted, value-driven brands—pressuring legacy companies to jettison underperforming or region-specific assets. Retail shelf space is tightening, private-label competition is intensifying, and supply chain efficiency has become a central pillar of strategic transformation.

The playbook being executed in 2025 mirrors a pattern that emerged in the post-pandemic years but has gained renewed urgency amid capital market expectations for leaner, more profitable operating models.

How Is Procter & Gamble Simplifying Its Global Operations?

Procter & Gamble, the Cincinnati-based consumer goods behemoth, announced in June 2025 that it would lay off approximately 7,000 non-factory employees—around 15% of its corporate workforce—over the next two years. The company, known for brands like Tide, Pampers, Gillette, and Old Spice, has launched a broad restructuring program to streamline functions, reduce management layers, and reallocate resources to core growth categories.

The company expects to incur between $1 billion and $1.6 billion in restructuring charges, with 25% of that tied to non-cash write-downs. A key driver of the cuts is a $600 million projected pre-tax hit from tariffs on Chinese-sourced materials in fiscal year 2026, compounding already elevated raw material and logistics costs.

As part of the portfolio realignment, Procter & Gamble has already divested or deprioritized several non-core assets, including the Vidal Sassoon brand in China, and is sharpening its marketing focus on fewer, globally scalable brand franchises.

What Transformation Is Unilever Undergoing in 2025?

Unilever has launched one of its most aggressive overhauls in years. Under the leadership of CEO Hein Schumacher and Home Care chief Fernando Fernandez, the company in March 2025 announced it would cut 7,500 jobs—mainly in white-collar and office-based roles—while restructuring around five product-focused business groups.

This effort is projected to deliver €800 million in cost savings by the end of 2025. As part of the reset, Unilever will spin off its entire ice cream division, which includes brands like Magnum and Ben & Jerry’s, creating a standalone company.

The realignment also includes a laser focus on its top 30 “power brands,” which account for roughly 70% of total revenues. These brands include Dove, Lifebuoy, Sunsilk, Rexona, Hellmann’s, and Knorr. In parallel, Unilever is divesting underperforming food brands in its Europe division worth €1 billion, signaling a retreat from slow-growth, low-margin categories.

This transformation is backed by digital reinvestment and supply chain automation, as the company seeks to improve speed-to-market and reinvigorate volume growth amid flat developed-market demand.

What’s Colgate-Palmolive’s Approach to Portfolio and Growth in 2025?

While not engaging in large-scale layoffs, Colgate-Palmolive is actively reshaping its leadership and execution model to drive growth and adapt to market shifts. Under CEO Noel Wallace, the company announced in early 2025 the creation of two new Chief Operating Officer roles—one focused on growth, the other on enterprise transformation.

Colgate is also accelerating its digital investments and expanding in emerging markets with strong tailwinds, such as Latin America and India. The company’s oral care and pet nutrition divisions remain strongholds, while skincare and personal care lines are being evaluated for margin improvement opportunities.

Management has signaled that the second half of 2025 will bring stronger growth and better pricing power, aided by structural changes and efficiency programs initiated in late 2024.

Why Are Power Brands the New Core Strategy?

The shift toward power brands has become the dominant theme in global consumer goods strategy in 2025, driven by a need for operational focus, financial resilience, and brand equity leverage. In an era where consumers are overwhelmed by choice, retailers are demanding higher shelf turnover, and costs are rising across the board—from logistics to marketing—concentrating on fewer, high-performing brands has become not just desirable but necessary.

The fundamental rationale is rooted in economies of scale and marketing efficiency. Fewer brands mean concentrated advertising budgets, unified messaging, and deeper market penetration. Instead of spreading resources across dozens of mid-tier or niche offerings, multinational companies are now prioritizing the top 20 to 30 “power brands” that can command premium pricing, justify larger in-store footprints, and scale globally with minimal customization. These brands often enjoy higher consumer trust, stronger pricing power, and built-in resilience to market volatility—key traits during periods of economic uncertainty or cost inflation.

Categories like laundry detergents, baby care products, oral hygiene, and personal grooming are especially conducive to this model. These are high-frequency, low-loyalty categories where brand familiarity and perceived quality heavily influence repeat purchases. Brands like Tide, Pampers, Colgate, and Dove have become entrenched consumer choices, backed by decades of consistent advertising and functional performance. They are not only top-of-mind for consumers but also highly preferred by retailers, who favor fewer SKUs that move fast and are supported by strong promotional cycles.

From a portfolio management standpoint, power brands simplify logistics, enable smarter demand forecasting, and reduce inventory obsolescence. Supply chain executives can more easily scale manufacturing and distribution when dealing with standardized SKUs across geographies. This is particularly valuable in the post-COVID supply chain environment, where volatility in shipping lanes, commodity prices, and warehousing costs has made SKU proliferation an operational liability.

Power brands also act as modular platforms for innovation. Instead of launching entirely new product lines, companies can extend an established brand into adjacent categories—like launching Tide pods from Tide powder or Dove Men+Care from the base Dove line. This not only reduces the cost of brand-building but accelerates time to market. Moreover, new launches under a trusted power brand benefit from instant recognition and shelf acceptance, significantly increasing the probability of early adoption.

For Procter & Gamble, this strategy translates into focusing on global titans like Tide in laundry, Pampers in baby care, Gillette in grooming, and Head & Shoulders in hair care. The American consumer goods giant has significantly pared down its brand count over the past decade, shedding more than 100 secondary brands during its last major portfolio restructuring in the mid-2010s. In 2025, it is reinforcing this trajectory with its current job cuts and market exits, doubling down on proven winners that offer consistent margins and category dominance.

Unilever’s approach is similarly rooted in brand power concentration. With plans to divest its lower-growth food brands in Europe and spin off its entire ice cream business, the Anglo-Dutch conglomerate is squarely betting on its top 30 power brands, which collectively contribute approximately 70% of group turnover. Flagships like Dove, Lifebuoy, Hellmann’s, and Sunsilk are being prioritized not only for investment but for innovation cycles, ESG rebranding, and digital marketing pilots.

Colgate-Palmolive, while more compact in brand architecture than its peers, is also reinforcing its focus on a few high-impact franchises. Its flagship Colgate oral care line and Hill’s Pet Nutrition division are seeing the bulk of strategic capital allocation, with the company investing in premium extensions, therapeutic formulations, and global distribution channels. Even within its personal care and skin health segments, Colgate has opted for consolidation around brands with strong pricing elasticity and consumer loyalty.

Crucially, power brands also offer insulation from macroeconomic turbulence. During inflationary cycles or economic slowdowns, consumers tend to gravitate toward names they trust—often choosing them over lesser-known or generic alternatives even if prices are marginally higher. This brand stickiness enables companies to preserve margins even when passing through higher input costs. Additionally, retailers view these brands as volume drivers, further incentivizing strategic partnerships, promotional placement, and inventory prioritization.

In essence, the shift toward power brands is both a defensive and offensive maneuver. It reflects the reality of a more competitive, fragmented, and cost-sensitive marketplace. And as digital commerce continues to compress the traditional long-tail advantage once enjoyed by larger portfolios, the power brand strategy offers clarity, scalability, and lasting equity.

For investors, this evolution is a key lens through which to assess long-term value. Companies leaning into power brands tend to demonstrate better gross margin stability, more efficient marketing spend ratios, and greater agility in responding to channel shifts—such as the migration from traditional retail to omnichannel and D2C models. As 2025 unfolds, the success of this strategy will likely separate the FMCG leaders from the laggards.

What Does This Mean for Investors and the Industry?

Institutional sentiment appears cautiously optimistic. Procter & Gamble and Unilever have seen steady accumulation by long-term funds such as Norges Bank and Nuveen LLC, even as other institutions trim exposure in response to short-term restructuring noise. Analysts generally view these resets as margin-accretive in the medium term, even if Q2 and Q3 earnings reflect transition-related headwinds.

Investors are advised to focus on operational execution, divestiture pacing, and management communication clarity. Stocks of these FMCG leaders continue to offer defensive qualities, strong dividends, and brand equity, even if their near-term volume growth remains muted.

More broadly, this reset signals a permanent move away from the bloated, multi-brand models of the early 2010s. In their place: concentrated, data-driven, consumer-led portfolios built for speed, resilience, and precision.