SUSTAINABILITY
CPG Innovation Profile
Unilever Makes Sustainability Its Business HOW INNOVATIVE PRODUCTS AND PROCESSES AND CHANGED CONVERSATIONS WITH RE TAILERS ARE HELPING ONE OF THE WORLD’S L ARGEST CPG COMPANIES CHANGE THE WORLD. By Mike Troy nilever published its first corporate social responsibility report in the late 90s, and the London-based multinational company, with U.S. headquarters in Englewood Cliffs. N.J., has been expanding its sustainability efforts ever since. That strategy has worked: Unilever’s annual sales are nearly $58 billion, its products are sold in 25 million retail outlets in 190 countries, and 13 of its brands have sales greater than $1 billion. Playing a key role in advancing the company’s sustainability-driven growth strategy is Jostein Solheim, EVP of foods and refreshment for North America. Solheim assumed that role in 2018 after an eight-year stint as CEO of Unilever’s Ben & Jerry’s brand. He spoke with Progressive Grocer about leading with purpose, taking on big problems and having new types of conversations with retailers. Progressive Grocer: Unilever’s purpose is to make sustainable living commonplace. What does that mean for consumers? Jostein Solheim: The fundamental belief behind Unilever’s purpose and mission is that by connecting sustainability and social responsibility with our business, internally and externally, we perform better as a business and deliver better results to shareholders. The magic of our strategy is to connect the two, connect the performance of the business with a bigger mission of doing the right thing for the planet and communities. And through that leverage, we get top-level performance. If you disconnect it, it doesn’t work. The leverage comes through the engagement of the whole team, the whole community. About 2 billion portions of Unilever products are consumed every day, so we need communities that are stable and thriving. PG: How does that philosophy come to life in conversations with senior retail executives? JS: The conversation is about moving from a relationship which has traditionally been grounded in negotiation to a relationship that is more grounded in innovating together. PG: Are you structured in such a way internally that teams working on these things come together with trading partners? JS: If we start with the big picture, on the customer side and retailer side
28
progressivegrocer.com
and on our side, what we are seeing is that the silos of the way the organizations have been classically built have evolved. One simple example is our customers have become our media partners, and our marketing folks have to integrate their campaigns with the retailer’s platform. We’re getting a lot of data and information from this, which drives our innovation. We can work with our customers to look at the data and say, “There looks to be an interesting space here.” Then we bring our cross-functional team in to deliver on that in what the tech industry refers to as “agile ways of working.” PG: Are there certain areas you are focused on? JS: There are two main types of sustainability-based innovations. One is consumer-led. It’s what we are seeing with a huge trend towards flexitarianism. People are balancing out their diets and choosing to avoid some meat and dairy products, and that’s created a boom in vegan products. We see that in the ice cream category and nondairy ice cream. Ben & Jerry’s is now the No. 1 nondairy ice cream, and it’s a huge growth area. So is vegan mayonnaise, with Hellmann’s. Ben & Jerry’s nondairy has a 40% lower carbon footprint than a dairy equivalent, but it is still a fully indulgent product. That’s what I call consumer-led, where there is a trend and we meet it. The other part is what I call driving loyalty and connection with consumers. That is something like PCR [post-consumer recycled] packaging. Hellmann’s is now at 100% use of post-consumer recycled plastic. Most people don’t run around the store and look for PCR packaging, but when they realize slowly over time that it is used, people say: “This is a good company. These are people that care.” It builds loyalty. PG: And you’ve got data that validates that? JS: Ben & Jerry’s is a great example. I was CEO for eight years, and what you can see very clearly is consumers that bought Ben & Jerry’s and were aware of our initiatives were twice as loyal as the people who just thought about the brand as being good ice cream.
