Affordability

Making our products more affordable

Every day around the world, 160 million people choose a Unilever brand. 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.

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.

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. In Iceland, 70% of people use a bath; in Israel, 82% use a shower; in Iran, two-thirds use a shower too, but another third use a mug; in Cambodia, half use a klong jar (a water container), and the rest use the river; and in Ethiopia, 69% use a bucket.

We need to be sensitive to such local conditions when designing our soap bars or shower gels. We use our global knowledge and experience to address local issues, and deliver local solutions at an affordable price.

It is sometimes suggested that people living on low incomes should not seek to buy global brands. We disagree. Our research and experience has 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.

Small pack sizes

In several markets our best-known 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.

Examples of small pack sizes costing less than 10 US cents include:

• Royco soups, Close Up toothpaste and Omo laundry powder in Africa

• One-rupee sachets of Lux and Sunsilk shampoo in India

• Our 30g pack of Pepsodent toothpaste in India – enough for a family of five to clean their teeth once a day for ten days – costs just six rupees (around €0.11).

As well as small pack sizes we are developing new products. Launched in early 2006, the Pepsodent Fighter toothbrush is a quality, low-cost toothbrush which brings better oral care within the reach of low-income consumers. Priced at 20-70 euro cents, in 2007 we sold 40 million of these toothbrushes in 30 countries across Asia, Africa and Europe.

Understanding affordability

In order to understand better the affordability of our products, we have compared the cost of some of our lowest-priced foods and home and personal care products with the price of an egg in that country – a common staple food – as a measure of affordability.

Our research showed that for example, in the Ivory Coast, our lowest-priced spread, Blue Band, costs the same as 1.1 eggs. In Germany, our lowest-priced spread, Rama, is equivalent to the local cost of 7.8 eggs.

This analysis builds on work we did in 2004 looking at our products in 82 countries, and comparing the price of the lowest-price product with the daily minimum wage. We found that in 6 out of 10 countries, our cheapest home and personal care (HPC) product cost less than 5% of the local minimum daily wage. In Nigeria our cheapest HPC product was a sachet of Omo laundry powder. The sachet retailed at 5 Naira (4 US cents), equivalent to 1% of the minimum daily wage. Our cheapest food product was our Royco soup cube, which retailed at 2.3 Naira (2 US cents), equivalent to 0.61% of the minimum daily wage. In 50 countries our lowest priced food product cost less than 5% of the local minimum daily wage.

We also looked at the proportion of our total sales income from these lowest-priced products in 20 African countries.

Pureit

Our Pureit in-home purifier provides water that is 'as safe as boiled', without needing electricity or pressurised tap water, for low and middle-income families in India. One rupee buys 3.5 litres of Pureit safe drinking water (including the initial one-off costs of the purifier unit). This makes it a more affordable alternative to boiling water or bottled water, where one rupee buys 2.5 litres or just 0.3 litres respectively. The chart below compares the cost of Pureit to other alternatives.