Unilever CEO, Paul Polman, says that businesses would be “stupid” not to lead on purpose-driven products and campaigns and those who don’t “won’t make it”.
Speaking on a media call this morning (19 July) following the company’s quarterly results, he explained: “In all our launches purpose is becoming more important. If you look at plastics, consumers led that. You would be stupid to not be a forerunner [on the need to be responsible].
“If you’re not a desired employer brand or your employees are unhappy and your innovations aren’t relevant you won’t make it.”
He was also adamant that sustainability would stay at the core of the business, no matter who his successor is, adding: “It’s bigger than one person. It’s so ingrained in our business model now.”
Polman cited a waterless toilet cleaner and a growing vegan ice cream business as innovations that are responding to consumer-led trends on health and climate change.
The FMCG giant reported lacklustre results with a fall in pre-tax profits for the first half of 2018 to €3.2bn (£2.85bn), down from €3.3bn (£2.94bn) for the same period in 2017.
Polman said the business has driven growth through a mixture of “strong innovation”, selling its spreads business and investing in beauty and personal care. Unilever will continue to focus on its “prestige” businesses, especially in personal beauty and skincare, and will continue to follow trends in organic, vegan and ‘natural’ products.
Premium beauty in particular is driving growth, with Polman saying he is pleased with acquisitions in this area and development of brands such as Hourglass, REN and Dermologica.
He explained: “We have built quite quickly a formidable beauty and personal care business from €12bn to €22bn a lot of which has been organic and prestige brands. These brands will de facto stay smaller so you need multiple, but they are an important drivers of business.”
The threat of direct to consumer
Taking a question from Marketing Week on Unilever’s approach to direct-to-consumer, Polman said: “Every shopping journey now has a digital component. If you look at ecommerce, we have grown that at a 60% to 70% rate, well ever the 30% to 40% rate that the trend is growing.”
The company acquired direct-to-consumer shaving brand Dollar Shave Club in 2016, which launched in the UK this year.
“We’ve learnt a lot from Dollar Shave Club. We’ve been able to take that knowledge and expand it to other parts of the business like our premium tea business, T2,” Polman added.
He added direct-to-consumer worked well for “prestige business” such as beauty and health and although it is growing direct-to-consumer it is only doing so “where it’s sensible will always have it next to our other channels.”
Polman also noted: “The company is changing our innovation programmes quite significantly with bigger global innovations as well as putting out local innovation such as our premium shower gels.”
He also explained that Unilever is digitising operation model and “embracing AI to engage with consumers”. The company uses Amazon Alexa to give recipes for its cooking products and instructions.