dr. rené lammers vp r&d unilever europe october 30, 2007 consumer confidence a downstream user...
TRANSCRIPT
Dr. René LammersVP R&D Unilever EuropeOctober 30, 2007
Consumer ConfidenceA downstream user perspective
Unilever is an Anglo-Dutch company
with operations in over 100 countries
We make around 400 brands
covering food, household & personal care products
and are present in half the households on the planet
Our brands are sold in nearly every country
Consumers
Unilever understands consumer behaviour
160 million times a day consumers are buying a Unilever product
Our business depends on our ability to keep trust
Current Context
Drivers of Change
Step change in even in the US due to:
Extreme weather (hurricanes)
Al Gore
Business initiatives (GE, GM, Wal*Mart)
US states pushing the agenda
European initiatives eg cutting GHG by 20% by 2020, targets for biofuels
IPCC finds unequivocal evidence that global warming is due to human activity
Increasing pressure on the world’s resources due to population and economic growth
Environmental degradation - depletion of aquifers, water pollution, desertification
Huge increase in demands from consumers, retailers and governments or business to tackle environmental degradation through:
green labelling
green taxes
carbon reduction/trading
cutting resource use (energy, water) in production and consumption
use of sustainable raw materials
reducing packaging waste
Offering great opportunities to those who take the lead, and big risks to those who don’t
Business Implications
Environmental concerngoes mainstream
Big Themes
Drivers of Change
Pressures from NGOs and society
Retailers are going green and demanding action from suppliers
Employees expect their companies
to do more
New expectations of industry leadership
International institutions and governments are failing to halt environmental degradation
But business is increasingly seen as part of the solution
Respond to increasing demands on business to do more for:
the environment Millennium Development
Goals creating jobs upgrading skills of
employees and suppliers/customers
sustainable and Fair Trade sourcing of agricultural raw materials
effective/transparent human rights policy
… particularly where responses are good for profit too
Work with national governments and international agencies to reach workable agreements on regulations
Celebrate and communicate ethical and environmental successes
Business Implications
Growing demands on business
Big Themes
Drivers of Change
Relative certainties of the cold war have been replaced by the rise of a multi-polar world
Terrorism
scare stories on chemicals
Rich-poor gap
Nuclear proliferation
Migration
Loss of jobs
Middle East unstable
Commodity shocks eg oil
Risk of pandemics eg bird flu
importance of brands as guarantees of quality and safety
Communicate and get credit for environmental and social activities
Opportunity to build reputation for managing a crisis and staying the course
Creating social value with less environmental impact
Business Implications
Pervasive insecurity
Big Themes
• external scan consumer trends 2007
“I care about my world, my society, my environment… I
worry about my safety, security and privacy”
Current Context
• In summary:
– The world is moving and changing
– Business is adapting to change through innovation – we are driven by consumers and under pressure from customers
Consumer Confidence
• Scare stories are undermining consumer trust – Media, some NGOs and politicians fuel chemophobia
• Need to increase and strengthen TRUST through responsible communication to consumers.
• Trust leads to competitiveness – we need the right regulatory framework where innovation is promoted and supported
• Consumer confidence is the engine of our business
FMCG: driver for sustainable solutions
• We respond to consumer demands with our brands and more sustainable products (formulations, packaging…)
• As downstream users, we also stimulate innovation upstream
• As part of the chemical industry we should be seen as a provider of sustainable solutions – but we need to move even quicker!
• Innovation is central to enhance competitiveness – we also need regulatory support in providing public/consumer/customer confidence
Feeling Safe
• Need positive legislative framework to motivate and protect trendsetters against unfair competition from free-riders
• But if consumers will be safe they also need to FEEL safe
• Regulators need to support us in creating a framework where chemophobia is reduced, innovation opportunities strengthened and where relevant communication to consumers based on risk and not hazard is promoted
Examples
• Nanotechnology : what if consumer resistance will lead us to not using this tremendous potential?
– business has a key role to play to ensure human and environmental safety
– regulators need to create the framework (legislative and political) to ensure the potential thrives
– need full stakeholder engagement in a public debate
Small examples bringing big benefits
Large Bottles (3L)100-120 ml dose/wash
Smaller Bottles (~1L)30-35 ml dose/washAt the same cost/wash
Environmental Benefits Environmental Benefits
Reduced amount of trucks ………………………..350 (Fuel savings)
Reduced packaging ………………………………..40-60% less plastic“Reduction” in number of bottles ……………….8,5 Million (2712 km)
Reduction of liquid volume sold …………………17.5 Million Litre
Reduction in water usage………………………….50-60%
Less detergent in the environment ……………..17,500 tons
Carton weight reduction…………………………..2512 tons
Reduced garbage trucks…………………………..200
In Europe
Feeling Safe?
• Need to ensure consumer acceptance of innovation.
• These formulations will possibly have severe GHS labels because of concentration
Will this enhance consumer confidence or communicate the environmental benefit?
Consumer Confidence?
consumer relevant information is critical
Beyond Europe
• We fully support initiatives that aim at improving the sustainability of European businesses.
• But as a global company, we want regulations to be consistent at a global level
• Global consistency is critical for competitiveness– to operate globally as a business
– all our consumers should have similar levels of protection
In Summary
• The world is changing fast
• As a FMCG we must adapt quickly
• Need innovation support upstream and partnering with regulators to reach common goals
• Must build on current initiatives to enhance consumer confidence