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Graham Cross
Director of Innova3on Accelera3on and Commercial Alliances: Unilever
October 2011
Unilever is a global company
with operations in over 100 countries and sales in 172
People know us by our brands
Savoury and Dressings
Spreads
Weight Management
Tea
Ice Cream
World Number 1 World Number 2 Local strength
Home & Personal Care Foods
Laundry - #1 in D&E
Daily Hair Care - #1 in D&E
Household Care
Oral Care
Skin
Deodorants
Strong Category Positions
Mindset For a Better Future
From Grower to Farmer
Campaign for Real Beauty
Shared Mealtimes
Cage Free Eggs Global Handwashing
Day Peace, Justice and
Fair Trade
€89 M Invested in Community Programs Worldwide in 2009
Sector leader of the Dow Jones Sustainability Index
11 Years in a row
They are used by 2 billion consumers – both rich and poor – every week
Consumption on this scale has environmental consequences –
consumers are aware of this
We work to create a better future every day.
We help people feel good, look good and get more out of life with brands and services that are good for them and good for others.
We will inspire people to take small, everyday actions that can add up to a big difference for the world.
We will develop new ways of doing business that will allow us to double the size of our company whilst reducing our environmental impact.
Compass: Our Vision
Decouple business growth from
environmental impacts
Our vision
We will double in size... ...while reducing our environmental impact
Total value chain impacts
Since 1995 CO2 from
energy - 41%
Water -65%
Waste -73%
Raw materials
Unilever’s direct impacts are 3% of total footprint
Distribution & retail
Consumer use & disposal
Business Case for Sustainability
Unilever Sustainable Living Plan
Roadmap for sustainably growing our company and our brands.
ENHANCING LIVELIHOODS
REDUCING ENVIRONMENTAL
IMPACT
IMPROVING HEALTH
& WELL-BEING
Small Actions / Big Difference
USLP launch: Reaction
“The best Plan out there for big global companies.” Jonathon Porritt, Forum for the Future"
“This a defining moment in
the sustainability revolution.”
Matthew Gitsham, Ashridge Business
School
“Few major companies have made such concrete commitments on environmental policy as Unilever, or been so vocal in championing the importance of sustainability to long-term growth.”
BBC "
“Big, broad and bold”
Reuters
What are consumers saying? (in market research)
What are consumers doing? (in the supermarket)
Although consumer opinions are changing, they don’t always translate into action
Source: 2009 Global Edelman goodpurpose™ Study
What are people saying?
• They are not saying “sustainability” • Only half are familiar with the term • Few can define it.
• The issues of concern vary across countries : • Climate change • Poverty • Water • Excessive packaging • Food safety
• Consumers continue to claim that: • It is important that a company is “green” • >30% plan to spend more on green products in the future
Sources: - PWC ‘Sustainability: Are Consumers Buying it?’; - Deloitte Touche/WEF; - Unilever/The Futures Company - Image Power Green Brands Survey: WPP/Esty and Partners – 9000 respondents in 8 countries
% ‘Concerned and affects me or my family directly’
TOP 5 CONCERNS BY COUNTRY
86% 86% 74% 74% 71%
Global Warming Air Pollution Toxins in food, drinks Water Pollution Wealth inequalities, crime
77% 75% 73% 67% 66%
Air pollution Water pollution Water shortages Global Warming Toxins in food, drink
66% 55% 54% 48% 44%
Global shortages of fossil fuels Toxins in food, drink Air Pollution Global Warming Water Pollution
44% 42% 38% 38% 37%
Global shortages of fossil fuels Toxins in food, drink Wealth inequalities, crime Poor Healthcare Global Warming
Source: The Futures Company, Global SEE Monitor 2008
Concerns are highest in developing countries, where people have more direct
experience of environmental issues
What are they saying? (in market research)
What are they doing? (in the supermarket)
Home Shopping
There is a big disconnect between consciousness of the environment at home and when shopping
Consumers generally don’t take their environmental concerns into the
supermarket
Source: Unilever/The Futures Company Qual. Research 2009
There are many barriers to action Price
48% unwilling to pay the premium
Confusion Uncertainty about what is good and what is bad
Trust • 50% say they trust NGOs on issues of sustainability • Only 9-16% accord same level of trust to companies/ retailers
Lack of time Average dwell time at the point of purchase is < 8 seconds
Sense of hopelessness My actions won’t make a difference to the huge problems faced by the world.
Source: PWC ‘Sustainability: Are Consumers Buying it?’; University of Manchester Sustainable Consumption Institute ‘Consumers, business and climate change, Boston Consulting Group 2008, Southerton, 2003
How should companies respond?
1. Find the consumer sweet spot – Detergents in India 2. Personalise the issue – Detergents in Turkey 3. Build trust with a third party endorser
• Lipton Tea • Ben and Jerry’s
Surf in India: Hitting the consumer sweet spot
" Surf Excel Quick Wash, launched in India in 2004
" Low Lather formulation saves two buckets of water per wash
" 14 BILLION litres of water can be saved a year
Omo in Turkey: Personalising the Issue…
….and at the same time offering a financial benefit
Sustainable Tea: Building Trust with a third party endorser
……..and overcoming the sense of helplessness small actions can make a big difference
Bigger, Better, Faster Product Innovation
Disruptive Technology
Leveraging across categories
Bigger, Better, Faster Innovation
Launched in 2010 and rolled out to over 30 countries delivering over €120 million in sales
The first ever golden ice cream on a stick. Magnum Gold?! was launched in 29 countries in 2010
Sunsilk’s biggest ever launch, ‘Co-Creations’ was rolled out to over 50 countries in less than 12 months.
Roll-out of our brands into more markets
Clear – Mexico Café Zero – Benelux, Spain, Greece Axe - China
Recent innovations with proprietary technology
Close Up – Fire Freeze
Brazil, India & Phillippines
Lipton – Sun Tea
France
Differentiating and Transforming Critical Functional Capabilities
Incl: Open Innovation
One Unilever R&D - 4D model
Fast, Large Scale
Deploy
Brilliance In Product
Design
Priori9se in Define
Breakthroughs From
Discover
Want
Capability Needs
Strategic Needs
We can’t do it alone
Raw materials
Unilever’s direct impacts are 3% of total footprint
Distribution & retail
Consumer use & disposal
Adopt Open Innovation models
Want Find
Capability Needs
Capable Partners
Strategic Needs
Strategic Partners
A wide range of partners and Open innovation models
University/ Contract Research"Suppliers"
JV’s Alliances"
Science Parks"
Entrepreneurs"
SME’s"
Scouting Networks"
Unilever Corporate Ventures"
NGO’s"
Portfolio of Intim
ate Strategic
Partners
Leverage Partnerships
Supplier Partnerships 48% of Unilever pipeline leverages Open innovation 31% of new products in consumer staples contain external technology in 2010*
Open innovation
* Corporate Executive Board -The Research and Technology Executive Council 2010 Budget, Spend, and Performance Survey
New businesses unit DIRECTED energy
Partner relevance
Routes to Consumers and Markets Hard Assets Access to use intellectual property Access to use skilled hands ! Suppliers
• commercial materials • commercial materials for other industries • Supplier’s STRATEGIC pipeline • commercialization capability for our materials • exclusive developments in unique areas
Want Find Get Manage
How We Work
Capability Needs
Capable Partners
Balanced Alliances
Value creation
Strategic Needs
Strategic Partners
Strategic Alliances
EnduringValue creation
Some Open Innovation Results
Traditional Business models
Open Business
models
Supply Chain
R&D
Branding
Main Partner capabilities employed:
Lipton-Pepsi
● We are poised to deliver growth
● But success means business goals must be met while also taking into account environmental, social goals.
● We know we can’t do it alone
● We will achieve through Partnership what we cannot achieve alone
Summary
