Brief

'Sustainable Living' brands dominate Unilever's growth in 2016

Dive Brief:

  • Unilever's "Sustainable Living" brands are growing more than 50% faster than the rest of the company's portfolio and drove 60% of overall growth in 2016, according to Marketing Week. This is an uptick from 2015, when Sustainable Living brands contributed to 46% of company growth and were growing 30% faster than Unilever's other brands. 
  • The food, beverage and household goods manufacturer is working to reduce the environmental impact of all of its businesses — in 2016, 18 of its top 40 brands were considered sustainable, up from 12 in 2015. Unilever told Marketing Week that brands Ben & Jerry's, Dove, Lifebuoy and Hellmann's are leading this initiative and achieving "above average growth."
  • “There is no doubt that the Unilever Sustainable Living Plan is making us more competitive by helping us to build our brands and spur innovation, strengthen our supply chain and reduce our risks, lower our costs, and build trust in our business," Unilever CEO Paul Polman told Marketing Week. "It is helping Unilever to serve society and our many consumers, and in doing so, create value for shareholders." 

Dive Insight:

Sustainability is one of the main buzz words sweeping today's food industry, but Unilever's results prove environmental initiatives don't just sound good — they can drive major sales. 

After the company commissioned research into what fueled consumers' purchasing patterns and behavior, Unilever found 33% already buy products with sustainability in mind, and 21% do not currently do so but would like to make that change. 

For food manufacturers, sustainability encompasses many things, including packaging lifecycle management, ingredient sourcing, health and nutrition, the social impact of production and impact on animal welfare. These initiatives can not only help create a health halo around a brand, but also bolster the top line, reduce costs and foster long-term customer loyalty. 

In a recent study, Nielsen reported 66% of consumers would pay more for products made by companies committed to positive social and environmental impact. This is especially true for millennials — 70% of this demographic said they would buy from brands that had safe working environments, fair wages for employees and other sustainable standards, even if their products were more expensive. 

It's important for brands to identify which sustainability efforts best resonate with their consumer base, and why. For example, a recent study found a majority of consumers prefer free-range eggs because they think that free-range birds are happier, and lay better-tasting eggs. This contradicts broad industry assumptions that consumers buy free-range eggs out of concern for animal welfare. Now that they have deeper knowledge of what drives free-range egg purchases, however, egg producers can market their product in ways that appeal to consumers' perception of happier hens and tastier eggs. 

This level of understanding can greatly benefit food and beverage brands, as evidenced by Unilever's strong sales. Unilever's growth hasn't been impacted by its rejection of Kraft Heinz, which attempted to take over the company earlier this year, but shareholders are pressuring it to improve efficiencies and sustainability efforts could be one way to do that. 

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Filed Under: Manufacturing Sustainability