Unilever aims for Africa growth

06 July 2012

JOHANNESBURG: Unilever, the consumer goods group, is ramping up its focus on Africa, an area where it remains in "learning mode".

The company – which manufactures brands like Knorr, Lipton and Ben & Jerry's – has traded in Africa for more than a century, and currently operates in 15 regional markets.

However, Frank Braeken, Unilever's executive vice president in Africa, told CNN that multinational corporations have typically treated the continent in a noticeably "monolithic" way.

"The African consumer has been underestimated, underserved and underserviced," he said. "What I mean is we have looked at it a little bit generically, like 'the Africans,' a little bit patronising generically. Now we start to take the African consumer seriously.

"I'm almost somewhat ashamed to admit that we are still very much in learning mode about what the differences are within Africa."

In an effort to enhance its own position, Unilever is taking an approach characterised by considerably heightened rigour, with market research playing a vital role in this process.

"It is more about how you define the brand mix, how you bring it to the consumer, that we localize and that we make it relevant for the local consumer," said Braeken.

"What we now increasingly do is we think much more in terms of sub-clusters, where you have east Africa, where you have west Africa, where you have southern Africa."

McKinsey, the consultancy, has predicted that household spending in Africa will reach $1.4tr in 2020, measured against the $860bn recorded across 2008 as a whole.

In a bid to tap this trend, Unilever has doubled the number of stores selling its products in the last few years, a figure today standing at over 400,000, aided by launching various low-cost lines.

"By having a product that is more affordable you reach down, so certainly you have more consumers in your catchment area," he said. "So certainly your products can be found in more places in Africa, so you expand your catchment area - that to us is the real story of our growth in Africa at this moment."

Although Braeken is "very optimistic" about the region, he named numerous "real challenges that are still ahead", including issues surrounding infrastructure, governance, corruption and competition for talent.

Data sourced from CNN; additional content by Warc staff