Nipped by Upstarts, Unilever Decides to Imitate Them

Manila Bulletin, January 10, 2018 | Go to article overview

Nipped by Upstarts, Unilever Decides to Imitate Them


By Saabira Chaudhuri

(The Wall Street Journal)

The world's biggest brands are under siege from an army of insurgents. Unilever Plc, the maker of Dove soap and Hellmann's mayonnaise, is fighting back with guerrilla tactics of its own.

The Anglo-Dutch packaged-goods giant resorted to a marketing prank last year to try to outflank new competitors of its TreSemme and Suave shampoos. In July, it launched a copycat high-protein, low-sugar ice cream after a startup usurped its brand, Breyers, as America's favorite pint. And in India, executives sought out Ayurvedic doctors to help whip up a turmeric face wash and a clove-oil toothpaste to compete with a celebrity yogi's line.

"We have to match them in terms of insight, speed and the ability, frankly, not to be 110% sure all the time that what you've got is going to work," said Unilever Chief Financial Officer Graeme Pitkethly, who is helping to spearhead the company's globe-spanning reorganization to respond to the new, local competition.

The success of that effort is far from assured. The world's biggest brands are facing a broad-based revolt among shoppers, threatening a business model that has served them, and their investors, for decades. Consumers in rich countries once embraced the consistency, convenience and affordability of their offerings, from disposable razors to ready-to-boil ravioli. In other parts of the world, a growing middle class clamored for many of the same trusted, Western brands.

Investors loved these standbys, too, for their dependable if modest growth. Consumers needed these home, personal-care and food staples in good times and bad, the thinking went. In past sales downturns, companies ratcheted up research and development - rolling out "new and improved" versions - and tapped their vast marketing budgets.

Today, that isn't good enough. Shoppers have gravitated in droves toward smaller, niche or locally made products. In many cases, they are seeking out healthy alternatives and more natural ingredients. Manufacturing costs have fallen, allowing small players to seize quickly on trends. Social media and e-commerce have made marketing and distribution easier.

"Basically there are no entry barriers," says Peter Ter Kulve, a 20-year Unilever veteran tapped as its "chief transformation officer" to lead the counterattack.

More than a decade ago, he said, Unilever centralized decision making, believing consumers in similar income brackets, from Miami to Mumbai, would be drawn to the same global brands. …

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