Like rivals Procter & Gamble and Nestlé, Unilever was once able to expect that consumers in established markets would continue to buy its products because of their consistency and convenience, while consumers in emerging markets would prefer Western brands over less reliable domestic variants.
But the rapid rise of disruptive brands, such as Patanjali Ayurved in India or the Halo Top ice cream brand in the US, which from almost nowhere replaced Ben & Jerry’s as America’s best-selling ice cream pint last year, has forced Unilever to respond.
As reported by the Wall Street Journal, the company has made a series of acquisitions and investments, including skincare brand Carver Korea and Pukka Herbal, a British herbal tea brand, and it also increased the number of product launches for local markets by more than 50% in 2017.
But perhaps its most intriguing efforts involve Unilever’s willingness to take on the disruptive brands at their own game.
For example, in response to the challenge posed by Halo Top, the company realised that Ben & Jerry’s could not compete directly with Halo Top’s USP of using sugar alcohol as a sweetener.
Instead, Unilever turned to its lower-priced Breyers brand and then rolled out Breyers Delights, which also uses sugar alcohol, while mimicking Halo Top’s packaging that emphasises its calorie and protein content.
Also in the US, Unilever found its low-price Suave shampoo brand under pressure from new, speciality brands and decided to pull a stunt in the knowledge that women tend to be sceptical of shampoo quality if the price is low.
Unilever’s Suave marketing team repackaged the product into a small, understated bottle, renamed it “evaus” (Suave spelt backwards) and forwarded it to beauty bloggers.
They then staged a casting call to advertise the “new brand” and filmed the reaction of the bloggers when they were told the true provenance of what they thought was a new boutique and high-end product.
The footage was used as part of an online campaign, which resulted in a “significant improvement in quality perception” among millennials, Unilever later claimed.
“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 Graeme Pitkethly, Unilever’s Chief Financial Officer, as he explained Unilever’s approach to its new competitors.
“Unilever was never mindlessly global, but we’ve realised that we need to get much more fast, much more agile,” he added. “There’s nothing that Patanjali does, or any local competitor does, that’s not replicable.”
Sourced from Wall Street Journal; additional content by WARC staff