The Financial Times says Terry Smith has mayo on his mind — and presumably on his sandwiches and salads.
The investor is annoyed that Unilever’s management spends its time pondering the “purpose” of Hellmann’s mayonnaise instead of making more money.
Smith complained in his annual letter that the company’s management was “obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business”.
The broadside drew attention because it is so rare for an investor to challenge a company’s focus on environmental, social and governance standards.
Such monomania is unhealthy. The evangelists ignore the fact that US companies with high ESG scores performed worse than lower-rated companies last year, according to Credit Suisse research.
Smith’s mayo missile — “a company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot” — missed its mark.
Mayo sales fell 13.8 per cent in the US last year, according to data from Euromonitor International. Not only is the healthiness under scrutiny but dastardly millennials and zoomers are shunning it in favour of “seven sorts of salsa, kimchi, wasabi, relishes of every ilk and hue”, as one magazine article put it, worrying about the relative rise of “identity condiments”.
