Customers and sustainability
We work hard to continually expand our retail network to allow us to reach a wider, and increasingly diverse, shopper base. With our existing customers we seek to improve the way we work together to make our joint operations more efficient and effective.
In recent years sustainability has become a much bigger part of our relationship with all of our retailers. We have found many opportunities, both through industry programmes and through one-on-one activities, to improve the sustainability of our business and to help shoppers adopt more sustainable lifestyles.
Our network of retail customers
Our products reach shoppers through a network of customers, from multinational retailers, wholesalers and distributors to small independent shops.
International retailers such as Walmart, Tesco, Carrefour and Metro have market leadership in the US and Europe and also have a growing presence in developing markets. Around a fifth of our worldwide sales are channelled through ten major retail chains but we also sell products through a more diverse group of distributors, wholesalers and millions of small independent outlets and kiosks, particularly in developing and emerging countries.
Unilever has a long history of working in both developed and developing markets and our combination of global scale and local market knowledge positions us well to help all retailers, large and small, to meet the needs of their shoppers.
Our approach
Unilever is now in the second year of a five-year strategic plan for working better with retail customers. Our aim is to work with the best retailers across our markets, to help build mutual, sustainable growth and to meet the needs of our consumers.
The importance of retailers is recognised at all levels of the company. Our CEO Paul Polman regularly meets with the CEOs of our major customers.
The strategic plan for working with retail customers addresses our engagement with customers as well as our internal capabilities and organisation. Some examples of activities that are included in the plan are:
Creating channel differentiation
Consumer buying patterns around the world continue to change, reflected in the growth of ‘discount’ retail channels and the emergence of ‘e-commerce’.
Addressing the needs of different types of retail channels requires us to take a flexible and responsive approach. To do this we have developed channel-specific strategies.
Sharing insights & innovations
The success of our first Customer Insight and Innovation Centre (CiiC) in New Jersey has led to the establishment of six more state-of-the-art centres in London, Paris, Singapore, Shanghai, Sao Paulo and Mumbai.
These centres provide the opportunity to work more closely with retailers around the world to trial new strategies for merchandising, displays and packaging without having to run in-store pilots which are costly and time consuming.
In 2011 we hosted over 300 meetings with retail customers at these Centres.
The Perfect Store
Our Perfect Store programme is based on the concept that for every variation in geography and outlet size, from a US superstore to a small-town independent in China, there is an optimal merchandising layout for best meeting shoppers’ needs and presenting Unilever brands.
Working with our customers on sustainability
An increasing number of our retail customers, both large and small, are now working to embed sustainability into their business.
They are setting ambitious targets in areas such as energy use, greenhouse gas emissions and waste. These targets impact their suppliers, including Unilever. This in turn has an impact on our own suppliers.
We welcome this increased focus on sustainability from retailers. Retailers can be powerful drivers for improving sustainability knowledge and performance across a wide range of companies and sectors.
Our long-standing activities in the area of sustainability give us an opportunity not only to respond to the growing requirements of retail customers, but to share our expertise and explore opportunities for joint initiatives. We are increasingly engaging with retailers (and with our peer companies) on sustainability, sharing our knowledge in areas such as sustainable agriculture, and measuring the lifecycle impacts of products. We work together to deliver innovative in-store programmes that help to educate and engage shoppers.
Some recent examples of how we are working with retailers include the following:
We have a long-standing relationship with Walmart on growing our joint understanding on how to tackle some of the challenges of sustainability. In 2011 we were recognised for the second year running by Walmart in Mexico and Central America as a Supplier of Sustainability Excellence.
We jointly developed a programme with Tesco that aimed to help consumers adopt a more sustainable lifestyle by offering advice and tips that also provide financial savings. The programme, called A Better Future Begins at Home, was launched in the UK in 2011. Our research showed that 85% of shoppers were supportive of the campaign. Following the UK launch it was rolled out in Hungary and Turkey. We intend to take the programme to countries in 2012.
In Taiwan Unilever worked with Auchan subsidiary RT Mart to increase recycling rates among consumers. The programme, linked to World Earth Day, rewarded shoppers who recycled bottles, batteries and bulbs in the store. The results were encouraging with 23% of RT Mart shoppers participating in the programme.
We joined with WWF and retailer Migros in Turkey to raise awareness of environmental issues with shoppers through a wide range of in-store and online programmes and promotions. More than 500,000 Migros shoppers have participated in the programme.
Working as an industry on sustainability
We actively engage in industry programmes at national, regional and global levels to help the industry as a whole bring about positive change.
The Consumer Goods Forum
The Consumer Goods Forum (CGF) is an industry association that brings together over 400 retailers, manufacturers, service providers and other stakeholders across 70 countries.
The CGF is governed by a board of 50 CEOs from the most important retailers and manufacturers in our industry. This includes major companies headquartered in Europe and America as well as companies headquartered in Asia, Latin America and Africa. The companies range from global businesses, such as Carrefour, Walmart, Coca-Cola and Unilever, to national leaders such as Sobeys from Canada and Pick ‘n Pay from South Africa.
The CGF aims to help the industry improve the way it meets the changing needs of the world's consumers. It does this through increasing industry collaboration on non-competitive matters, to bring efficiency and simplicity for our consumers and through supporting the exchange of knowledge and good practices.
Unilever CEO, Paul Polman sits on the board of the CGF and co-chairs the Board Strategy Advisory Committee and the Sustainability ‘Pillar’.
Taking action on sustainability issues
Sustainability is one of the Forum’s focus areas and the CEOs of Unilever and Tesco are co-sponsors of the sustainability programme.
At the end of 2010, the board of the Consumer Goods Forum announced two major commitments:
The first was to eliminate deforestation from the supply chains of all member companies by 2020.
The second was an agreement to begin phasing-out hydrofluorocarbon (HFC) refrigerants from 2015 and to replace them with ‘natural’ refrigerants that have a much lower global warming potential.
The Forum will work to achieve both goals using a combination of individual company initiatives and by working in partnership with NGOs.
In addition, the CGF sustainability programme, under the leadership of Unilever and Tesco has released a Global Packaging Protocol, which provides companies with a framework and common language to discuss the role of packaging in sustainability. A glossary of commonly used sustainability terms was published in early 2012.
GS1
GS1 is a global federation of national organisations that support our industry through setting standards and supporting services that improve efficiencies in our cross-industry supply chain. This includes, for example, the standards used for product identification through the on-pack barcode system.
Unilever actively supports the work of GS1 through participation on the board of many of the national organisations. At a global level, Pier Luigi Sigismondi, Unilever Chief Supply Chain Officer, represents Unilever on the GS1 Global Management Board.
The Efficient Consumer Response (ECR) Movement
The ECR movement started in the mid-1990s to help our industry collectively improve our service to consumers. Unilever has actively supported the ECR movement since its inception.
In March 2012 Jan Zijderveld, President of Unilever Europe, was appointed as co-chair of ECR Europe. Responsible business will be a cornerstone of the new strategy that Jan Zijderveld and his co-chair, Thomas Hübner from Carrefour will bring to ECR.