Unilever’s Sustainable Living Brands: Why Doing Good Is Good For Business

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Unilever Sustainable Living consumer

Unilever CEO Paul Polman has led a transformation of the company over the last few years, a journey that has led to the sale of some of its iconic CPG/FMCG brands, ranging from Country Crock to Slim-Fast to Ragu, and the acquisition of fast-growing brands including Seventh Generation and Dollar Shave Club.

In addition to trying to generate better sales and profitability, Polman has been pushing the company to invest in better-for-you CPG products and supply chain practices as part of its Sustainable Living platform. The goal—to do business and grow in a way that’s good for the people and the planet.

This values-based approach of “making purpose pay” has put Polman in opposition with some investors, such as when he suggested that boards of directors needn’t be “slaves” to Wall Street’s quarter-to-quarter short-term thinking and singular focus on financial performance.

But there’s another way to look at Unilever’s 2017 progress against its goals, and that’s by comparing the financial performance of its sustainable brands last year against the rest of its business.

By that measure, Polman’s strategy is working: Unilever just announced that its 26 Sustainable Living brands (including Dove, Lipton, Hellman’s and Seventh Generation) grew 46% faster than the rest of the business and delivered 70% of its “turnover growth.” 22 of Unilever’s 26 Sustainable Living brands are in its top 40 brands.

Clearly, Unilever is delivering on its sustainability promises set forth in 2010 in the Unilever Sustainable Living Plan (USLP) roadmap for accelerating growth while reducing environmental footprint and increasing positive social impact.

“All of Unilever’s brands are on a journey of reducing their environmental footprint and increasing their positive social impact,” the company stated in a press release. “Sustainable Living brands are those that are furthest ahead on the journey to achieving the company’s ambitious sustainability goals.”

New entrants to Unilever’s Sustainable Living brand portfolio since last year include Vaseline, Sunsilk, Wall’s and Sunlight. The company’s top six brands are also sustainable brands: Dove, Lipton, laundry brands such as OMO, Rexona, Hellmann’s and Knorr. Unilever includes its brands certified as “B” corps, for “benefits,” such as Ben & Jerry’s, Seventh Generation and Pukka Herbs.

Unilever is on track to meet around 80% of its targets for its Sustainable Living Plan, launched in 2010 to “set ambitious targets to decouple Unilever’s growth from its environmental impact, while increasing the company’s positive social impact.”

Those commitments include improving health and wellbeing for one billion people, reducing environmental impact by half and enhancing livelihoods for its millions of employees, suppliers and retailers. “The fact that our sustainable living brands are continuing to deliver growth,” Polman stated, “shows that this is a business model that works.”

To compare with Unilever’s progress reported a year ago, in 2016 (as reported in May 2017),  the company’s portfolio of ‘sustainable living brands’—defined by their contribution to one or more of the USLP targets—delivered over 60% of growth year-on-year and grew more than 50% faster than the rest of the company’s brands.

Every day, 2.5 billion people use Unilever products to feel good, look good
and get more out of life. Our range of world-leading, household-name brands includes Lipton, Knorr, Dove, Axe, Hellmann’s and Omo. Thirteen of the world’s top 50 brands are owned by Unilever, up from twelve the previous year, with its nearest competitor owning just five, according to Kantar’s brand footprint report in May 2017.

In 2017 Unilever owned 13 billion-euro brands. In addition its portfolio also includes trusted and iconic local brands designed to meet the specific needs of consumers in their home market such as Bango in Indonesia, Pureit in India and Suave in the United States. Unilever’s geographic reach gives it an unparalleled global presence, including a unique position in emerging markets, which generate 58% of its turnover.

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