On any given day, 3.4 billion people use Unilever products in around 190 countries and, in each market where we operate, the emphasis is on selling our core brands to mainstream consumers.
But it was becoming clear a decade or so ago that trends like globalisation, migration, travel and digital commerce were creating new segments that were underserved by Unilever. So, in 2012, we set up Unilever International (UI) to serve these emerging – and fast-growing – geographies, consumers, customers and channels worldwide.
The unique model proved successful. In just under four years, the business more than doubled its inherited turnover and crossed the billion-euro mark in less than a decade, becoming one of Unilever’s fastest-growing businesses globally.
To mark ten years of operation, we take a look under the bonnet of this phenomenal growth engine for Unilever.
Thriving in an increasingly fragmented world
UI works alongside Unilever’s category and country teams to identify segments that are too niche, small or hard to serve, or that are non-strategic for the mainstream business. UI’s role is to fill these white spaces. Specifically, to develop and incubate brands and then, when the time is right, hand back the scaled-up businesses for the category and country teams to manage and grow further.
“Every aspect of today’s FMCG environment is fragmenting, from channels to consumer base to consumption moments,” explains Unilever International CEO Umesh Shah. “Business is growing at the edges, like discounters and super premium. To service those edges – to thrive in today’s fragmented world – you need different models to co-exist in market at the same time."
A wide-ranging remit
UI serves over 100 million consumers in small or challenging geographies like Mongolia, East Timor and Maldives. These hard-to-reach markets are served via UI’s agile supply chain and supported by in-store activation and digital marketing to help build leadership positions. Through UI’s international network, it’s able to quickly and efficiently set up distribution routes to remote locations like the North Caribbean or Pacific Islands.
The business caters to millions of diasporas and expats who crave the ethnic brands they grew up with and shoppers who want halal or kosher products. For instance, these include Bru coffee from India, Marmite from the UK and Lady’s Choice from the Philippines, as well as halal ranges from North Africa and kosher products from Israel.
UI has created a specialist multi-channel distributor network to supply to Fortune 500 companies, global hospitality and travel businesses, government institutions, military contractors and non-governmental organisations like the United Nations Development Programme and the Red Cross.
The business takes brands like Pears, St Ives, Maille and Brut outside their ‘home’ markets, as well as managing the international expansion of acquired brands such as Horlicks, Simple and Shea Moisture.
It also specialises in incubating core brands when they are new to a market. For example, in Korea, UI built winning positions for brands like Dove, Vaseline, Lipton and Ben & Jerry’s.
Diverse business models
To serve the hugely diverse nature of its consumer base, UI manages an equally diverse range of business models. Some markets it operates in are mature, others are in their infancy.
A good example of this is the Pacific Islands. Spanning Guam to New Zealand, East Timor to French Polynesia, the 30,000 or so islands in the region cover an area about two and a half times the size of Europe. Every market is different and even within markets, no product segment is the same.
UI leverages different business models to service different markets. This ranges from working with 500+ chosen professional distributors to going direct to key retailers like FairPrice in Singapore and Watsons in the Netherlands.
Power of digital transformation
UI’s complex global business model means it leverages technology across its value chain, from customer and supplier interfaces to digital commerce and direct-to-consumer models. Its small marketing team deploys digital expertise and assets from the main offices in Singapore to nearly 100 countries globally.
As Aseem Puri, UI’s Chief Marketing Officer, explains: “We launch all our products through digital. You can target a consumer in Papua New Guinea sitting here in Singapore. When a homemaker opens her Facebook page, she will see an Omo ad. When a millennial woman goes to Facebook, she sees a Lux ad. Digital has helped us build our brands fast and remotely.”
A launch a day
UI has perfected the art of maintaining a steady stream of launches from our top brands. In fact, it has launched between 300 and 350 products a year over the last few years – that’s almost one a day.
To make that possible, it uses an agile innovation process that uses external partners to craft new and consumer-relevant products at speed. Its New Product Distribution and Procurement teams – who manage beauty and personal care products – have landed over 1,000 innovations in the last three years alone.
As Amit Mohta, UI’s Supply Chain Head, says: “This agile development–production–launch cycle is a great way for brands to test new products that can be scaled up or simply launched faster.”
Partnerships with purpose at their heart
In the weeks after Covid-19 took hold, UI mobilised resources to scale up hand sanitiser production capabilities significantly to supply millions of Lifebuoy sanitisers, handwashes, wipes and masks to government institutions and NGOs to protect the health and hygiene of millions of people around the world.
More recently, UI’s dedicated partnerships team has built a global infrastructure to supply a range of beauty and personal care products to leading hospitality and travel players such as Intercontinental Group, Uber and Singapore Airlines. These partnerships will also help reduce our plastic footprint by replacing miniature single-use plastic amenities with our refillable large packs.
What does the future hold?
“There’s an intrinsic culture of agility, speed and can-do mindset that runs through the 400+ UI employees from 35 nationalities across its seven hubs. It’s not uncommon for millennials to manage businesses worth €15-20 million before they develop into next-generation leaders,” says Nguyen-Tam Trang, UI’s Head of Human Resources.
At the heart of everything is UI’s aim to grow white space opportunities, be it through brands or geographies – to a substantial size, then hand them over to the main business to own and scale up. And while the past ten years have seen exceptional growth, Umesh (Unilever International CEO) believes the best is yet to come.
Main photo at top of article shows launch of Horlicks in Nepal.