Unilever, the global consumer products giant, has recently announced a strategic shift towards driving faster growth through its power brands, which consist of the top 30 brands in its portfolio. These power brands, including Dove, Lynx/Axe, and Ben & Jerry’s, currently drive 70% of Unilever’s business. By focusing on these brands, Unilever aims to increase its market share and boost overall revenue growth.
Unilever had previously implemented a power brand strategy in India around the year 2000, with 30 power brands in the country compared to 63 globally. However, the results were suboptimal, with a revenue compound annual growth rate of only around 4% between 2000 and 2010. This strategy led to significant market share losses for Unilever in India.
India holds great potential for Unilever, with country/region-specific brands accounting for approximately 30% of Hindustan Unilever Ltd.’s revenue. Unilever’s power brands, such as Dove and Axe, have already gained significant popularity in the Indian market. However, it is important to note that not all of Unilever’s India-specific brands are included in the global top 30 list. Brands like Glow and Lovely, Wheel, Brooke Bond, Clinic Plus, Kissan, Bru, and Lakme are not part of the power brand list.
The CEO Strategy
Unilever’s new CEO, Hein Schumacher, has set out a new strategy to deliver faster growth for the company. He plans to increase Unilever’s investment in marketing and research and development (R&D) to drive brand growth. Schumacher aims to increase the absolute level of brand and marketing investment, focusing on bigger platforms and fully funding the power brands. This strategy aligns with Unilever’s goal of driving growth through its key brands.
RTM Watch’s Take
Unilever’s shift towards power brands and its focus on India reflects the company’s commitment to driving growth and optimising its portfolio. By concentrating on its top-performing brands, Unilever aims to strengthen its market position and increase revenue. The previous power brand strategy in India may have had suboptimal results, but Unilever’s renewed focus on power brands, coupled with increased investment in marketing and R&D, indicates a more deliberate and targeted approach. India’s growing consumer market presents a significant opportunity for Unilever, and by leveraging its power brands, the company can further expand its presence in the country.
