Our brands in society

Consumer trends & market opportunities

The world is experiencing unprecedented social, economic and environmental change. The global challenges of poverty, malnutrition, poor health and disease are becoming more acute and more complex, while the effects of climate change are being felt on every continent.

For some companies this represents a threat but for others it provides a huge opportunity for innovation and growth.

Many of the world's social and environmental challenges are felt most acutely in developing and emerging countries. For example, it is these countries that will suffer the worst effects of climate change. However, given their rate of economic development, these are also the very markets that will be the main source of growth for Unilever in future.

Companies that can develop products that meet the functional needs of consumers while taking into account these social and environmental challenges will be better placed to grow than those that do not.

Another significant trend in recent years has been the emergence of 'conscience consumers' – people who want to make a positive difference to the world through the brands they choose to buy. From being a minority group of consumers seeking out a small selection of mostly niche brands, this has become a more mainstream movement, with large numbers of people now actively seeking out products with a positive social or environmental benefit or avoiding those that are perceived as having a negative impact.

Our approach

Anticipating that this would become a big trend, the Unilever Executive decided in 2005 that social, economic and environmental factors should be integrated more deeply into the development and innovation plans of our brands. This is now a core element of our corporate responsibility strategy.

To help evaluate the risks and opportunities presented by this agenda, we developed an approach called Brand Imprint. This provides our brand teams with a 360º scan of the social, economic and environmental impact that their brand has on the world.

Making progress

The first brands to conduct a Brand Imprint were Dove and Lipton in 2006. By the end of 2007, 14 of our global and regional brands had been through the process and we are aiming for all our major brands to complete a Brand Imprint by the end of 2008.

Brand Imprint is about new product development, so results will not always be immediate, as it often takes time for innovations to reach consumers. But it is equally about better managing our impacts. When innovations do emerge, we want to be sure that they are underpinned by credible action, evidence and performance. Therefore, factoring in the views of external stakeholders, NGOs and opinion formers is a key part of the process.

What we are already finding is that the process is creating greater connectivity between brands, their supply chains and their consumers. It is also helping to integrate our work on greenhouse gases, water, packaging and sustainable agriculture more effectively into our marketing plans.

Lipton leads the way on tea

In spring 2006, representatives from different parts of Unilever, including marketing, supply chain, R&D and agronomists, met at our tea estate in Kericho, Kenya. For months previously, data on tea sourcing, tea pricing and research into tea drinkers' concerns as citizens had been gathered, ready to be analysed and debated.

This group decided that the low prices being paid to millions of tea growers and pluckers was unacceptable and that Unilever, as the world's largest buyer of black tea, should lead the industry in finding a solution. The tea industry has been suffering for years from oversupply, causing the price of tea to drop by 35% over 25 years. As a consequence, up to 2 million tea growers and pluckers, including an estimated 1 million in sub-Saharan Africa, have been living on extremely low incomes.

Research showed that consumers are also concerned about the environmental impacts of tea cultivation and production.

A ground-breaking commitment

Unilever's contribution to the solution was to commit to purchasing all our tea from sustainable, ethical sources. After evaluating several certification routes, we decided that the Rainforest Alliance's certification was the most appropriate because of its comprehensive approach towards sustainable farm management, covering social, economic and environmental aspects. This is very much in line with the way we have been managing our own Sustainable Agriculture Programme over the years.

Lipton is the world's best-selling tea brand, available in over 110 countries and with sales of around €3 billion. By 2010, we aim to source all the tea used in Lipton Yellow Label and PG Tips tea bags sold in Western Europe from Rainforest Alliance Certified ^TM farms, and by 2015 this will apply to all Lipton tea bags sold globally. This is the first time a major tea company has committed to introducing sustainably certified tea on such a large scale, and the first time Rainforest Alliance has audited tea farms.

We expect that certified tea, both from large tea estates and from small farmers, could command a 10-15% higher price at auction and we estimate we will be paying farmers €2 million more per year for our tea by 2010 and €5 million more per year by 2015.

A strong beginning

The first tea farm to meet the standards required for certification was our own tea estate in Kericho, which has pioneered sustainable tea production for many years. Other tea farms in Kenya, Tanzania, Malawi, Indonesia, India, Argentina and Sri Lanka are following. Eventually certification will extend to thousands of farms in Africa, South America and South East Asia, improving the crops, incomes and livelihoods of around 2 million people on three continents.

The first certified tea was sold to restaurants and the catering trade in Europe in August 2007. In early 2008 it became widely available across Europe under our PG Tips and Lipton brands and in Japan as Lipton Goryoku.