Ghee Wiz: Unilever Thinks Small to Become More Nimble

Unilever is thinking small these days, as the Wall Street Journal observed this week. In an article titled “Outfoxed by Small-Batch Upstarts, Unilever Decides to Imitate Them,” WSJ notes that the Anglo-Dutch consumer goods maker has been getting creative in the past year or so—thinking and acting like smaller challenger brands in order to refresh and develop innovative products.

It’s been quietly testing small-batch or reformulated brands that can take on the niche, independent, artisanal or locally-made brands that are wooing away millennials. It’s a strategic response to the smaller competitors that have been siphoning away consumers with unique ingredients, minimalist (and sometimes, millennial pink) designs, flexible delivery methods (such as online subscriptions) or a breezy made-for-social-media attitude.

These scrappy upstarts, as a whole, have been more nimble and agile than the global CPG giant—and thus a very real threat, despite their smaller budgets for marketing, R&D and distribution.

Increased competition from feisty upstarts has inspired the CPG giant to get creative, with WSJ citing the example of how Suave repackaged its shampoo last year to appear more luxe and expensive—even spelling its name lower-case and backwards as ‘evaus’—and testing the small, understated bottle with beauty bloggers. The stunt, which fooled the influencers who might be gravitating to Birchbox or Glossier, online beauty services like Birchbox and specialty stores, was recorded and released online.

The Unilever story by WSJ’s Saabira Chaudhuri is a great case study on how a global powerhouse of brands is responding to, and learning from, smaller disruptors. In India, for example, Unilever was rattled by the growth of Patanjali, an Ayurvedic startup that became its biggest competitor in the market. So it hired Ayurvedic doctors to put its own stamp on the market, and reformulated its soap with moisturizing cow’s ghee.

Cow’s Ghee is known to have properties that cure dry skin and replenish its moisture. Get smooth skin with Lever ayush Cow’s Ghee Soap. pic.twitter.com/OOAFQDntMP

— LEVER ayush (@LEVERayush) September 2, 2017

Unilever relaunched its Lever Ayush brand with ghee and a more competitive selling proposition: “Made with 5,000 years of Ayurvedic wisdom, Lever Ayush is the authentic Ayurvedic solution to modern day beauty problems.”

As Bloomberg noted, Unilever’s India brand managers at Hindustan Unilever responded by strengthening its overall ‘naturals’ segment. HUL also acquired Indulekha, a premium hair care brand, and launched a range of new brands in Tresseme Botanique, Fair & Lovely Ayurveda, Clinic Plus Ayurveda Care and Citra,  a specialist naturals brand. (Not in the running: Ghee, Your Hair Smells Terrific shampoo.)

In the U.S., Unilever also recently launched ApotheCARE Essentials, a drugstore brand that might appeal to the aspirational consumer who would love to buy, but may not be able to afford, tonier personal care brands such as Aesop, an Australian brand that’s majority-owned by Brazil’s Natura Cosmeticos.

New Breyers delights, 260-330 calories and 20g of protein per pint. Indulge without all the guilt. Find your favorite pint. pic.twitter.com/ibiOcfz0Lk

— Breyers (@Breyers) September 25, 2017

In the U.S., Unilever saw ice cream sales at Ben & Jerry’s and Breyers melt away when low-calorie indie startup Halo Top, hailed as a top 25 invention of 2017 by TIME, started scooping up market share. In response, it whipped up its own high-protein, low-cal version of Breyers; it also offered its premium Magnum ice cream in pints.

As noted on Food Dive, “Unilever responded quickly with the introduction of seven flavors of Breyer’s Delights, a low-calorie, low-sugar, high-protein ice cream. The launch of Magnum pints has performed well since its launch less than a year ago, helping the brand post growth of nearly 15%, the publication reported.”

And when it can’t beat them or join them, Unilever has been buying them. In recent years, it has bought Sir Kensington’s, an artisanal condiment maker, and personal care line Sundial Brands, also from New York; Schmidt’s Naturals, from Portland, Oregon; and T2, an Australian artisanal tea range, among acquisitions.

For more insights on the strategy, check out the WSJ article.

 

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