LONDON/ROTTERDAM: FMCG giant Unilever says it is innovating faster than ever before and that its pipeline is getting stronger, thanks to restructuring aimed at engendering greater agility.
Much of this centres around the Connected 4 Growth programme announced in late 2016. “This is raising our innovation capabilities to unprecedented levels to meet consumer trends with speed and scale, both locally and globally,” said CEO Paul Polman, during a fourth quarter earnings call.
The creation of Country Category Business Teams is a case in point. “Our local teams are now empowered to deliver local innovations,” he explained, “allowing our global divisions and R&D team to fully focus on the bigger strategic global launches, leading to larger projects with more benefits.”
In India, for example, the local team has created the Lever ayush range of Ayurvedic products in response to the challenges posed by the likes of Patanjali.
As well as giving licence to the Country Category Business Teams, Unilever’s Partner to Win programme encourages external links and permits more use of third-party. The business is also exploring how it can use brand licensing to enter new segments at low cost and with little risk.
“And we are creating new opportunities through new business models, often helped by the Unilever Foundry,” Polman added. “This allows us to collaborate with start-ups, matching our brands to leading technologies.”
The outcome of all this activity, he said, is that not only are innovations going faster to market, “our innovation pipeline is getting stronger, and I would actually argue the strongest it has ever been”.
“It’s really unprecedented that we have launched five new brands ourselves [in 2017],” he added.
Media and in-store spending, meanwhile, increased by some €250m over the year, although CFO Graeme Pitkethly argued that the actual impact of the increase was even greater as it was offset by efficiencies, largely in advertising production from Zero Based Budgeting.
“We're now making fewer adverts and reinvesting the savings, ensuring the best ones [run] for longer, while stepping up our investment in digital media,” he said. “As a result, we continue to be very competitive in our media share of voice.”
Sourced from Seeking Alpha; additional content by WARC staff