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Unilever’s Universe



This multibillion-dollar global business, born of soap bars and margarine, reaches millions of consumers each day. As it moves into its third century, Unilever is focused on doubling revenues while simultaneously decreasing its impact on the Earth’s resources.



By Christine Esposito , Associate Editor



Published February 12, 2013
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Unilever’s Universe

If the creators of the hit TV series “Downton Abbey,” the PBS drama set in the early 1900s England, were looking for product placement deals, they couldn’t find a better suited match than Lever Bros and Margarine Unie —the firms that would one day merge to become Unilever. Their products could have easily been staples in the kitchen and laundry room where handmaids cook meals and wash clothes as well as in the luxurious upstairs bath where Lady Mary Crawley readies for gala dinners.
 
In the 1890s, William Hesketh Lever, founder of Lever Brothers, came up with the idea for Sunlight Soap, a revolutionary product that helped popularize cleanliness and increase hygiene in Victorian England, while in The Netherlands, Dutch firm Margarine Unie NV found success as producer of margarine—a new product used as a butter substitute. When the two firms signed an amalgamation agreement on Sept. 2, 1929, it marked the starting point of Unilever, which would grow to become one of the world’s largest and most powerful CPG companies.
 
Today, millions of consumers around the world use and consume Unilever products on a daily basis, resulting in annual sales that topped $68 billion (€51.3 billion) in 2012.

 
Dove is a big brand for Unilever, selling across multiple categories from hair care to deodorant.
Unilever’s household and personal care offerings range from heritage products like Sunlight, Lifebuoy, Lux and Cif to recently acquired lines such as TreSemme and Alberto-V05 to powerhouse personal care brands that include Dove and Axe, which have international reach and enjoy leadership spots in multiple categories.

Like many long-running and successful firms, Unilever has taken the steps necessary to keep its business moving forward, from R&D (creating its first purpose-built research laboratory in 1911) to marketing (airing its first commercial TV ad in 1955 for Gibbs toothpaste) to manufacturing, which included buying a sizeable chunk of land in Cheshire back in 1887 to expand its soap making capabilities. That 56-acre parcel would become Port Sunlight, encompassing manufacturing as well as village where Lever would house employees. Between 1899 and 1914, 800 houses were built at Port Sunlight to house a population of 3,500 (and as recently as the 1980s, all residents of Port Sunlight were employees of Unilever and their families). Lever also built public buildings such as the Lady Lever Art Gallery and a concert hall, schools, a hospital, church and even a temperance hotel.
 

Since its founding in 1929, Unilever’s business became increasingly diverse, as it rolled out its own products and acquired others across a wide range of categories from household staples like soap and detergent to personal care (shampoo and toothpaste) to food and chemicals—and there’s even been a shipping line and a fish farming business on the roster.
 
Paul Polman, head of Unilever

The 'Happi' Years

After Happi first came on the scene (as Detergent Age) in 1964, Unilever’s activities in the household and personal care sector included the rollout of Cif (1965) and the 1971 debut of Impulse, a deodorant that would make its way to 30 countries by 1985. Also in 1971, Unilever launched Mentadent, a toothpaste with an emphasis on gum health.

 
In the 1980s, Unilever embarked on a rationalization plan that would lead to large acquisitions and divestments, both of which were significant to its presence in the household and personal care marketplace. During this decade, the firm shed businesses that didn’t fit, such as animal feed, packaging, transport and fish farming, but launched Axe (known as Lynx in the UK), acquired Chesebrough-Pond's (owner of Pond's and Vaseline in the US), relaunched Dove in Europe and acquired Calvin Klein and Elizabeth Arden/Fabergé.
 
Surf is a Unilever detergent brand.
The transformation of Unilever has continued for the past 30 years, as the company continues to sell and withdraw brands as it focuses on four areas—Home Care, Personal Care, Foods and Specialty Chemicals. By 2001, Unilever had slimmed down to 900 brands from 1600, and among the businesses cast off were its I&I unit DiverseyLever and Elizabeth Arden. In 2005, the firm sold its global prestige fragrance business to Coty. It shed its North American laundry care business in 2008 and acquired Sara Lee’s personal care brands and professional hair care company TIGI the next year. Yet another significant purchase was announced in the fourth quarter of 2010 as Unilever made a bid for Alberto Culver —the US hair care company that owned TreSemme and VO5. That $3.7 billion deal was Unilever’s largest acquisition in 10 years and added more than 1% to the firm’s turnover in 2011.
 

Today, a much more streamlined Unilever has 400-plus brands and breaks its businesses into the following sectors which operate on a global scale:
• Personal Care, sales of €18.1 billion in 2012
• Home Care, sales of €9.1 billion in 2012;
• Foods, sales of €14.4 billion in 2012; and
• Refreshment, sales of €1.8 billion in 2012.
 

Growing Sales, Shrinking Footprint

 
While Unilever traces its history back centuries, the firm’s principals have recognized the importance of safeguarding resources to insure a solid future, and have firmly latched on to the concept of sustainability. While the first focused on sustainability of vital resources in its food business, it has also expanded those eco-minded pursuits to its household and personal care manufacturing and production practices. For example, Unilever in 2006 rolled out Small & Mighty, the first super-concentrated liquid laundry detergent, which used one-third the packaging, one-third the water and one-third of the transport of dilute liquids.
 
Among Unilever’s most significant sustainability initiatives was its 2008 commitment to move to sustainable palm oil sourcing by 2015. At the end of 2011, 64% of its palm oil purchases came from sustainable sources, up from 37% in 2010. Moret recently, Unilever pledged to phase out the use of plastic micro beads as a “scrub” material in its personal care products by the deadline.
 
Unilever is also increasing its positive social impact by modifying consumer behavior—and has rolled out a number of initiatives. For example, Lifebuoy promotes hand hygiene practices and Domestos works with the World Toilet Organization to aid in sanitation. Unilever has also worked to encourage water consumption, exemplified in a tongue-in-cheek manner last year with Axe’s “Showerpooling” campaign. Designed to educate men and women on the importance of water conservation, it featured animated videos, an online pledge and a tour of US colleges during which the brand distributed 7,000 water-efficient Delta showerheads. (The science behind all this fun: in 2011, Unilever conducted a Sustainable Showering Study in which researchers used sensors to monitor 2,600 showers by 100 families for a 1,000 days to see how showers were being used and for how long).

These moves others like them fit in lockstep with Unilever’s grand plan: to double the size of the CPG giant from €40 to €80 billion while reducing its environmental impact.

The execution of that plan, so far, garnered Paul Polman accolades from First, a multidisciplinary international affairs organization that bestowed the Unilever CEO with its “Award for Responsible Capitalism.”


Unilever's household care brands.
The award, which has been presented since 2000, honors business leaders who have excelled by both commercial success and social responsibility. According to First, judges look for a business leader who has consistently demonstrated social responsibility as an integral part of commercial success examining, in particular, the manner in which their business interacts both with the environment and the communities in which they operate; someone who has run a company in a clearly responsible way.

In his Nov. 12, 2012 award acceptance speech, Polman told the audience that it takes more than acts of corporate social responsibility to build a sustainable and equitable future for all.
 
“We need to fundamentally re-evaluate the way in which we do business. We cannot be by-standers any more to the system that gives it life in the first place. We need to move from a license to operate to a license to lead,” he said.

During that speech, Polman highlighted the Unilever Sustainable Living Plan, and spoke of the power this current business model has through“an issue that would have found resonance among Unilever’s founding fathers.”

 
The Axe brand often takes a tongue-in-cheek approach to marketing and promotion.
According to Polman, back at the turn of the 20th century, Lever was “a pioneer” in bringing hygiene to a country crippled by the spread of diseases and child mortality. “Thankfully, those are challenges of the past....at least they are here in the developed world; but sadly not everywhere. It cannot be right, surely, that in this day and age two million children a year under five die from preventable diseases. And a child dies every six seconds from hunger. Diarrhea alone claims the lives of 3,000 children—a day. That tells us everything we need to know about a system that isn’t working. These are lives that can be saved through the simple act of handwashing,” Polman said.

Through initiatives like Global Handwashing Day, Polman said the Lifebuoy brand is impacting the lives of 250 million people across Africa, Asia and Latin America.
 
“And it is harnessing social media to help galvanize change,” Polman said, noting that more than 6 million people pledged action on handwashing on the Lifebuoy Facebook page.

“Suddenly this isn’t just a brand, it’s a movement for change. And it’s not just about washing hands, it’s about saving lives. And do you know what? Lifebuoy is one of Unilever’s fastest growing brands…I think William Lever would be proud to see the role it is playing today.”
 
 
 


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