Making our products more affordable
Unilever’s products are sold in over 190 countries and on any given day 2 billion consumers worldwide use a Unilever product. Consumers buy around 170 billion Unilever packs every year. People have different lifestyles, tastes, preferences and budgets. By providing high-quality, innovative brands that offer value for money, we aim to meet the different needs of consumers around the world.
Some groups suggest that people living on low incomes should not seek to buy global brands. We disagree. Our research and experience have shown us that poorer consumers are often the most discerning. When spending from a limited budget, they cannot afford to waste money on products they do not trust to be effective. The Unilever brand gives them the confidence to know that the product will deliver on its promise, so their money will be well spent.
Whether it is through new distribution channels, using smaller formats or creating new products, we are trying to develop business models to reach people on low incomes. This makes business sense and enhances our ability to improve lives in some of the poorest communities.
The emerging market opportunity
Population (billions) in developing and emerging markets, based on Unilever's estimates of income at purchasing power parity exchange rates.
Small pack sizes
In several markets our brands are available in small sachets, offering a small amount of shampoo or detergent at a low cost. This makes our quality brands attainable by people with low or irregular incomes.
In many countries, small sachets of shampoo or washing powder cost less than the equivalent of 10 US cents, and their sales can account for a significant proportion of turnover. For example in Africa we sell Royco soups, Close Up toothpaste and Omo laundry powder in small pack sizes. In India our Shakti entrepreneurs sell one-rupee sachets of Clinic Plus shampoo and five-rupee (less than €0.10) sachets of Pepsondent toothpaste, Brooke Bond Red Label tea and bars of Lifebuoy soap. In Indonesia, small sachets of deodorant sell for 15,000 rupiahs (less than €1.50).
As well as small pack sizes we are developing new products. For example in 2012 we launched a quality, low-cost toothbrush called Pepsodent Triple Clean which is priced at just 13 rupees in India (less than €0.20).
Replicating this approach across a broader range of brands is a much bigger task. And there are some trade-offs in trying to meet all our social, economic and environmental commitments.
For example, making products available in small-pack sizes and single-dose sachets brings quality brands to some of the world's poorest consumers, but it also contributes to litter in markets where waste management infrastructure cannot always provide facilities for reuse and recycling. We are working with stakeholders on how best to solve this dilemma without affecting the affordability and accessibility of our products.
See Tackling sachet waste for more.
Safe drinking water – Pureit
One of our Unilever Sustainable Living Plan targets is to make safe drinking water available and affordable to 500 million people through our Pureit in-home water purifier.
We have produced several different models of Pureit to appeal to a range of consumers – from those on low incomes to wealthier consumers.
The most affordable model costs €20 in India (1,400 rupees) with an ongoing running cost of just one euro cent for about 2 litres of safe drinking water. This is lower than the cost of boiling water and significantly less than buying bottled water.
Following a successful launch in India, Pureit has been rolled out to Bangladesh, Indonesia, Mexico, Brazil, Sri Lanka and Nigeria. Forty five million people in total have gained access to safe drinking water from the brand since its launch in 2005.
We are working with a range of microfinance and NGO partners in India to improve the affordability of the purifier for those for whom the price remains a barrier to purchase.
See Providing safe drinking water for more.
Affordable toilet provision
We are looking at how we can promote affordable toilet provision and good toilet hygiene for millions while growing business for our Domestos brand. We are working with partners such as UNICEF and the World Toilet Organization to develop appropriate models to create and fulfil demand for toilets.
See Better sanitation for more.
There remain many less affluent consumers in emerging markets who can benefit from our affordable brands. However, our approach is not simply about expanding into these markets; it is also about offering affordable products to shoppers struggling in tough economic conditions across Europe and the US. In 2012, for example, 46 million people in the US used food stamps.
‘Local jewels’ are offering good value to consumers and our business. Responding swiftly to the economic crisis in Greece, we launched Elais, a new value-for-money food brand, after less than six months in development. This offers consumers a high quality product range positioned for lower incomes.
A tailored approach to meeting local needs
We also seek to tailor our brands to meet the specific and varying needs of our consumers. Tea, for example, is drunk in different styles around the world and we offer varieties to suit local tastes and customs. Likewise, everyone needs to wash, but they do it in various ways. Much depends on the availability and cost of water, as well as the affordability of soap.
We need to be sensitive to such local conditions when designing our soap bars or shower gels. We use our global knowledge and marketing experience to address local issues, and deliver local solutions at an affordable price.