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Last updated on: March 17, 2011 10:22 IST
The country's largest fast moving consumer goods
company, Hindustan Unilever, is using "out-of-
home" aggressively to grow its foods business. Out-
of-home means initiatives undertaken beyond just
selling products.

The move comes at a time when the over $50-billion
Unilever is looking to double its turnover in 10 years.

Foods business, which includes packaged foods,
beverages, ice creams, etc, would have to grow at 50 per cent per annum,
Unilever Chief Executive Officer Paul Polman had said during his India visit
last week, if the objective of doubling the turnover had to be achieved.

HUL's foods business is growing at 15 per cent per annum, according to
analysts tracking the company.

It constitutes 17 per cent of the company's Rs. 17,524-crore turnover,
according to 2009-10 Annual Report.

In contrast, Unilever's global foods business constitutes 52 per cent of its
turnover, growing at 10 per cent per annum.

Polman had said out-of-home had a key role to play in galvanising its foods
business in India.

HUL Managing Director Nitin Paranjpe agreed: "Out-of-home is a very
significant opportunity. And we will look to leverage that."

The company has taken few steps in that direction, with the launch of three
Bru cafes in three cities, including Mumbai, recently. Bru is the coffee brand of
HUL.

The move, say FMCG analysts, is to build traction for the brand on the ground,
something Paranjpe doesn't deny.

He said: "We will systematically approach the business of foods, enter
categories, take up initiatives, where Unilever has an advantage and where we
will be able to build the market for the long-term."

Even as it steps into the cafe space, HUL is also ramping up its Swirls ice-
cream parlours.

"At the moment, we have 130 of them," said Paranjpe.

"We will add rapidly to the number in 2011, possibly one a week."

On packaged foods, while there is no plan to do anything out-of-home, the
company has been using experiential marketing tools to increase awareness
and improve sampling.

During the launch of Knorr soupy noodles last year, vans dishing out portions
of it were posted at different locations in cities such as Mumbai.

As HUL attempts to push its foods business using out-of-home, analysts say
the success of it will depend on how much business these outlets can generate.

Paranjpe does not get into the details of how much these outlets, especially the
Swirls parlours, are generating at the moment.

But the service model has been a difficult one for other FMCG companies.
Amul, for instance, is looking to discontinue its pizza and ice cream parlours.

According to Shripad Nadkarni, director at Marketgate Consulting, the skill
sets for a retail business are totally different as opposed to an FMCG business.

"Quite often, the reason for stepping into the retail or out-of-home space is
more brand-building than for commercial purposes," he said.

WASTE & PACKAGING
OUR WASTE IMPACT PER CONSUMER USE HAS REDUCED BY
AROUND 11% SINCE 2010*
OUR COMMITMENT
Halve the waste associated with the disposal of our products by 2020.*
OUR PERFORMANCE
Our waste impact has reduced by around 11% since 2010.*
achieved: 2

on-plan: 7

off-plan: 2

%of target achieved: 1
OUR PERSPECTIVE
Increasing resource scarcity means it is more urgent than ever to be efficient with
packaging and to find solutions to deal with post-consumer waste - packaging and
products thrown away after use by our consumers. We purchase over 2.4 million tonnes of
packaging a year and we are determined to reduce the absolute amount of materials we
use and to ensure they are reused or recycled.
We are on track to meet our 2020 commitment. Our total footprint from packaging waste to
landfill has reduced by 11%. Efficient pack designs and innovative use of materials, as well
as the disposal of sauce brands with large waste footprints, have been the main drivers.
We are deploying new technologies to lightweight packaging and cutting-edge techniques to
optimise material use across hundreds of different designs. We are also working with others
to stimulate recycling infrastructures, particularly for materials which are important to us but
which are more difficult to recycle or recover, such as sachets in developing countries or
aluminium aerosol sprays. This can take time but is crucial for the long-term.
Likewise, in our own operations, we are making strong progress against our targets. Our
manufacturing teams have already exceeded their 2020 target, reducing waste by 66% per
tonne of production since 2008. In 2012 we set a new target for all our sites to achieve zero
non-hazardous waste to landfill by 2015. Three quarters of our sites have now achieved
this, an increase of more than 50 sites compared to 2012. Since we launched the Unilever
Sustainable Living Plan we have got much better at sharing best practice across sites and
regions and this is accelerating progress. For example, in Latin America, we went from eight
sites sending zero non-hazardous waste to landfill at the start of 2013, to 33 sites by the
end of the year.
REDUCE WASTE FROM MANUFACTURING
By 2020 total waste sent for disposal will be at or below 2008 levels despite significantly
higher volumes.
This represents a reduction of around 40% per tonne of production.
Versus a 1995 baseline, this represents an 80% reduction per tonne of production and a
70% absolute reduction.
By 2015 all manufacturing sites will achieve zero non-hazardous waste to landfill.
All newly built factories will aim to generate less than half the waste of those in our 2008
baseline.
Approximately 97,000 fewer tonnes of total waste disposed in 2013 than in 2008. This
represents a 66% reduction per tonne of production.
Compared to 1995, this represents an 89% reduction in absolute terms.
75% (186) of our manufacturing sites achieved zero non-hazardous waste to landfill by end
2013, an increase of more than 50 sites compared to 2012.
New factories in India and Turkey started production in 2013. When fully operational each
aims to dispose of zero non-hazardous waste to landfill and generate less than half the
waste of those factories in a representative 2008 baseline.
REDUCE PACKAGING
By 2020 we will reduce the weight of packaging that we use by one third through:
o lightweighting materials
o optimising structural and material design
o developing concentrated versions of our products
o eliminating unnecessary packaging.
11% reduction in weight per consumer use in 2013 compared to 2010, achieved through a
combination of lightweighting, material design optimisation and compression.
RECYCLE PACKAGING
Working in partnership with industry, governments and NGOs, we aim to increase recycling
and recovery rates on average by 5% by 2015 and by 15% by 2020 in our top 14 countries.
For some this means doubling or even tripling existing recycling rates.
We will make it easier for consumers to recycle our packaging by using materials that best
fit the end-of-life treatment facilities available in their countries.
By 2020 we will increase the recycled material content in our packaging to maximum
possible levels. This will act as a catalyst to increase recycling rates.
7% increase in recycling and recovery rates in 2013, over the 2010 average Recycling and
Recovery Index (RRI), averaged across our top 14 countries.
3,204 tonnes of post-consumer recycled materials incorporated into our rigid plastic
packaging in 2013.
REUSE PACKAGING
We will provide consumers with refills in our home and personal care portfolio to make it
possible to reuse the primary pack.
In 2013 we extended some of our current portfolio and introduced new refills across
countries such as China, India, South Africa, Brazil, Argentina and the UK.
TACKLE SACHET WASTE
Our goal is to develop and implement a sustainable business model for handling our sachet
waste streams by 2015.
We are continuing to investigate the potential of new technology but progress is slower than
the time scale anticipated.
ELIMINATE PVC
We will eliminate PVC (polyvinyl chloride) from all packaging by 2012 (where technical
solutions exist).
9999% of PVC removed from our portfolio by end 2012.
REDUCE OFFICE WASTE
In our top 21 countries, at least 90% of our office waste will be reused, recycled or
recovered by 2015 and we will send zero waste to landfill by 2017.
By 2015 we will reduce paper consumption by 30% per head in our top 21 countries.
We will eliminate paper in our invoicing, goods receipt, purchase order processes, financial
reporting and employee expense processing by 2015, where legally allowable and
technically possible.
92% of our office waste was reused, recycled or recovered in 2013.
In 2013 paper consumed per occupant was 37% lower than 2010.
59% of our in-scope Business and Finance Services processes were completed
electronically.
Independently assured by PwC
* Our environmental targets are expressed on a per consumer use basis. This means a
single use, portion or serving of a product. We have taken a lifecycle approach with a
baseline of 2010.


Unilever takes HUL strategies like small packs,
cheaper variants to developed markets
Kala Vijayraghavan, ET Bureau Sep 28, 2012, 11.12AM IST
Tags:
Unilever|
unemployment|
personal care|
marketing campaigns|
HUL|
Hindustan Unilever Ltd|
disposable income|
developed markets

(Buyers in the west hit by)
MUMBAI: During a 2009 India visit, Paul Polman, CEO of Anglo-Dutch consumer goods major
Unilever, couldn't conceal his delight with the Indian subsidiary's strategy of offering brands with
multiple price and packaging options, helping consumers trade down or up depending on the
state of the economy.
"If we had that (such options) in the United States, there is no reason why we would be hit in a
recession. We have seen that we tend to do well in markets that have a wide portfolio of brands
in a category. So, we are trying to do the same in other markets," Polman had said.

Three years on, the Unilever CEO's words are ringing true in developed markets. The home
& personal careand foods giant is now dipping into the sales strategies being deployed by
outposts in developing and emerging (D&E) markets, such as India's Hindustan Unilever
Ltd (HUL), to appeal to recession-ravaged consumers in the US and Europe.
These include selling smaller pack sizes, affordable variants of best-selling brands for the
developed world's bottom of the pyramid consumer, and single-serve sachet variants.
Company officials say consumers in developed
markets plagued by unemployment and shrinking disposable income are displaying similar
habits of thrift as those in developing markets.
The maker of brands such as Axe, Dove, Knorr and Lipton is selling small packs of its brands in
markets such as Spain, Greece and the US. In Spain, for instance, Unilever sells Surf detergent
in packs offering five washes, and offers mashed potatoes and mayonnaise in small packages
in Greece. It has also launched a low-cost brand for tea and olive oil for the euro markets.
Confirming the move, a Unilever spokesperson said: "We have 'reverse-engineered' products
from D&E markets - where we have big, long-established businesses - starting with a price point
that people can afford and then working our way backwards along the supply and manufacturing
chain to make sure that we can make it a profitable business model. We know that this works as
a way of meeting the needs and aspirations of consumers who struggle to make ends meet - be
that through low-price sachets of shampoos or basic bouillons."
Across Europe, Unilever has noted that the recession drives more consumers to packed
lunches and home-baking. The company has now introduced new baking products like Stork
baking liquid as an option to the more expensive butter as well as in packs that can be re-used
as lunch boxes.
The spokesperson also points out that Unilever runs marketing campaigns on mayonnaise that
seek to inspire people to make the most of their leftovers. "Groups of consumers see value
differently. The 'cash strapped' are really about spending the least out of pocket as possible;
whilst 'smart shoppers' might be looking for the best price per portion; and 'bargain hunters' the
best possible promotional deal," explains the spokesperson. One way Unilever is trying to meet
consumer needs is by positioning specific brands as value-for-money alternatives. Example: the
spreads portfolio has 'I can't Believe it's not Butter' in the United Kingdom, Homa in Germany
and Delma in Poland. Unilever is also rolling out Saga, a strong value-for-money tea brand in
central European markets.
The consumer goods giant has also dramatically increased the number of products that retailers
can choose to sell at euro 1 or 1. In tea, for instance, there's PG Tips One-Cup and in
dressings there's a 450-mg jar of Hellmann's Salad Mayonnaise.
Within the Knorr Bouillon range, Unilever has launched Knorr Economica with an entry-level
stock cube that's priced some 60% lower than the normal line. Another strategy involves
offering more at an affordable price: like ice-creams in mega packs, large jars of mayo, and PG
Tips in '240 Tea Bag' formats.
Much of what Unilever is replicating in the developed world has originated in India. For
instance, HUL had launched a sachet blitz across such power brands as Close-Up, Pepsodent,
Sunsilk, Ponds, Vaseline, Brooke Bond Taj Mahal and Bru to increase product penetration at
the bottom of the pyramid.

However, a relatively smaller player, CavinKare from the South, had a huge role to play in
ushering the sachet revolution as a strategy for low-unit pricing to drive sales at the low end.
Unilever is now busy taking such lessons from D&E markets - which contribute roughly 53% to
the global turnover - to a developed world that's teeming with bargain hunters and value
seekers.
Innovations that add value, particularly at the lower end of the price spectrum, are being
shipped to developed markets.
What we have been able to do better as a business is take some of the techniques we use in
one part of the world and apply them where they are appropriate elsewhere," adds the Unilever
spokesperson.
Kannan Sitaram, operating partner at India Equity Partners, a New York-based private equity
firm, says with Unilever adopting value-for-money strategies in the developed world, the bottom
of the pyramid term has now got a new dimension.
"Bottom of the pyramid does not mean poor consumers; it includes those who want a particular
value at a price, across categories."