Unilever – Brands, competition and more

unilever office
Unilever office in Rotterdam, Netherlands

Its 6 am in the morning and the wife wakes up to her alarm set in her iPhone. She is able to hear her husband already in the kitchen as it’s his day to do the daily chores. She goes to the washroom takes up her “Pepsodent” toothbrush, puts some “Close up” gel on it and starts brushing. Meanwhile her husband is preparing coffee by adding “Bru Instant” coffee powder inside the coffee mug.  Then after taking bath with her “Lux” soap, which is kept next to her husband’s “Lifebuoy” and her daughter’s pears soap. She enters the dining room and she’s able to see that the breakfast is ready. Toasted bread and “Kissan” jam and “Knorr” tomato soup. She curses her husband for the bread jam breakfast and crams some to fill her stomach. Meanwhile, their son sprays some “axe deodorant” hoping that at least today a few girls would follow him to his college while he walks past them. In the working area the servant maid is pouring some “surf excel matic” washing powder inside the washing machine and starts the machine. As the machine starts spinning, she moves on to wash vessels with “Vim lemon” dish wash gel. As their daughter enters her office, her colleagues are able to smell her Dove deodorant. Suddenly a pack of girls swarm around her to check the flavor she has sprayed. The crowd starts to disperse as their boss enters the ODC (Offshore Delivery Center). If you had noticed one common factor in the above story it will be the brands of Unilever, known as Hindustan Unilever Limited (HUL) in India. This might not be the typical scenario of every household, but to say Unilever has all the brands that a family uses in a day is an understatement.

HUL
Array of Products

Unilever is a Dutch-British transnational FMCG (Fast moving consumer goods company) co-headquartered in Rotterdam, Netherlands and London, United Kingdom. It has a variety of product range which includes food, beverages, cleaning agents and personal care products. It is the world’s largest consumer goods company measured by 2012 revenue.

On any given day, 2.5 billion people use Unilever products

Every 6 seconds, somewhere in the world a person buys a unilever product. Unilever has over 400 brands many of which are household names in several countries. It has 1600 brands in 1999. The bottom 1200 of the 1600 brands contributed to only 8% of the company’s sales in 1999.

Hindustan Unilever Limited (HUL) is an Indian fast moving consumer goods (FMCG) company based in Mumbai, Maharashtra, India.  Unilever owns a 67% controlling share in HUL as of March 2015 and is the holding company of HUL.

A few brands of Unilever that we most often use, but don’t know that it is from the HUL family

  • Fair and Lovely
  • Knorr
  • Annapurna atta
  • Axe
  • Ponds
  • Dove
  • Kwality Wall’s
  • Magnum
  • Sunsilk
  • Clear
  • Bru
  • Kissan
  • Huggies
  • Pepsodent
  • Close up
  • Surf
  • Tresemme’
  • Wheel
  • Vaseline
  • Brylcreem

If you notice such FMCG companies, they will have two or three washing powders or a few different brands of shampoos or ice creams. Pepsodent and Close up both are tooth pastes under HUL. People might think that this might lead to cannibalization of sales. Why would HUL have 2 tooth pastes and make people choose from them? Won’t it eat away each other’s market share? Yes it is possible. But these two brands are aimed at different audiences. They compete against different competitors or fight for different markets. At the end of the day, yes both fall under the tooth paste category or oral care, but it is important to be in both the markets or it is a lost opportunity. While the advertisement of Close Up says fresh breath, great smell, Pepsodent ads talk about cavities and germs. Most often you will see kids in Pepsodent ads. But in Close up ads, we usually see couples who try to smell each others’ mouth. Suddenly there is a blast of fresh breath from the guy’s mouth and the lady falls for him (sigh).

The same is the case of Sunsilk , Tresemme’, Clear, Dove etc.

nitinparanje ex CEO
Figure 1: Ex CEO of HUL alongside the Kwality Walls trolley

Unilever

They have renamed several of the products to suit the country and the people. For example the cleaning agent cif is called as jif in many countries. Some brands share the same logo or the same design. Domex (also called as Domestos) is a strong competitor of Harpic (From Reccket Benkizer) in the toilet cleaners or disinfectant market in India.

The other side of the coin 

Enviornmental issues

Unilever has been criticized by Greenpeace for causing deforestation; Unilever was targeted in 2008 by Greenpeace UK, which criticized the company for buying palm oil from suppliers that are damaging Indonesia’s rain-forests. By 2008, Indonesia was losing 2% of its remaining rain forest each year, having the fastest deforestation rate of any country.

Kodaikanal mercury dumping issue

Kodaikanal is a hill station located 7,000 feet above the sea level in the high ranges of Palani Hills in the Southern Indian state of Tamil Nadu, often referred as Princess of Hill Stations.

HUL kodai

Kodaikanal mercury poisoning is a proven case of mercury contamination by HUL in the process of making mercury thermometers for export around the world. The exposure of the environmental abuse led to the closure of the HUL factory in 2001.

Hindustan Unilever Limited (HUL) finally entered into a settlement to provide “undisclosed” ex-gratia amount to the victims consisting of future health care benefits.

Underpayed third world employees

Multinational corporations usually take the major chunk of the profit pie, and leave the crumbs for the small producers/farmers in the Third World. It is of course the latter that are providing the real core value of a product. Outsourcing has actually affected the employee strength of unilever in developed countries like USA and UK.

Rising competition and challenges

With rising competition from local players like Patanjali in India, Unilever is launching products in the “natural” space like never before. Ayush is one such brand being promoted in a big way to compete with other aryuvedic swadesi brands. Indulekha is also one such brand that is there in the natural space for hair oil.  But it won’t be easy to take away market share from Patanjali, which enjoys huge popularity and loyalty among middle-class India. It will be interesting to watch how HUL and unilever as a whole fights this battle.

The Free Mind Confluence

 

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16 thoughts on “Unilever – Brands, competition and more”

    1. Good job Ashwin. I would like you to suggest a suitable strategy for Unilever to maintain or improve their market share in the present scenario considering the new entrants.

      Like

  1. Very well written. The flow is appealing. Highlighting the flip side was the best part. Good job Ashwin 🙂
    Keep it up!

    Like

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