Dubai: Brushing teeth twice a day instead of once could improve oral hygiene, but it also ensures double toothpaste sales, thus increasing profits for producers.
Similarly, by spending a bit on awareness of personal hygiene, fast-moving consumer goods (FMCG) manufacturers could ensure increased sales of soap, deodorants or personal care products that could boost their bottom line.
Some might call it ‘sustainable living'. Some might see it as ‘sustaining profits', therefore, sustainable business.
"In the end, it makes good business sense. It ensures responsible growth," Harish Manwani, chief operating officer of Unilever, quips.
"By 2020, 100 per cent of all our agricultural inputs will come from sustainable sources. By then, we will link more than 500,000 smallholder farmers and small-scale distributors into our supply chain."
Two out of every three cups of tea consumed in the GCC is Lipton, claims Unilever.
Over 28 per cent of the population across the Middle East and North Africa (Mena) do not brush their teeth, according to findings by the company. That creates an opportunity for the company's growth.
"By 2020, we will help more than a billion people to improve their hygiene habits and we will bring safe drinking water to 500 million people worldwide. This will help reduce the incidence of life-threatening diseases like diarrhoea," Manwani said.
Business, at the end of the day, is about making money. However, a growing number of companies worldwide are moving towards making money ‘responsibly'.
Sounds like a ‘win-win' situation for all.
His company recently launched a corporate social responsibility programme called Unilever Sustainable Living Plan (USLP) that aims to halve the company's environmental footprint while doubling business by 2020. This is a good business case for a global FMCG manufacturer that plans to expand business by helping its largest stakeholders — the customers and suppliers — while reducing the carbon footprint. It's like killing not two, but three birds with one stone.
In an exclusive interview, Harish Manwani, the number two man in Unilever, explains how it is going to work.
Gulf News: Could you first explain the Unilever Sustainable Living Plan (USLP) and how it is going to help your business grow?
Harish Manwani: It's very simple. Businesses need to grow but we also operate in a resource constrained world. Therefore Unilever's mission is to decouple business growth from environmental impacts. We want to double the size of our business while reducing our environmental impact. This means a completely new business model and this is also what the Unilever Sustainable Living Plan is all about.
We are a truly global company with sales in over 170 countries and our brands that are present in seven out of ten households on the planet. Every day we touch the lives of more than two billion people worldwide.
Hence our actions can make a big difference and through USLP we intend to focus on three big goals. Halving the environmental impact of our products is the very first one. Secondly, we will help one billion people take action to improve their health and thirdly we have committed ourselves to source 100 per cent of our agricultural raw materials from sustainable sources.
For instance, more than a billion people — or a seventh of all humans — are without access to safe drinking water, while about 80 per cent of diseases in the developing world are waterborne.
We therefore aim to make safe drinking water available and affordable to 500 million people through our Pureit in-home water purifier by 2020. An independent scientific study has shown that Pureit can reduce the incidence of diarrhoeal disease by 50 per cent. So, it all adds up to one thing: responsible business, responsible growth. We will encourage our consumers, customers, our people and our suppliers to take small actions that can add up to a big difference considering billions use our products everyday.
So you are linking growth with people. Which means new business opportunities lie in creating awareness of health and hygiene. Is that correct?
To a certain extent, yes. By this, we will create new businesses and new markets. The growth will come from not only our existing consumers, but also new ones as we continue to expand our consumer base through market development activities.
How do you ensure the reduction of carbon footprint by a half by 2020? Are you going to measure this regularly to ensure you are on the right track? How do you map the carbon footprint?
First of all, we have mapped the environmental footprint of more than 1,600 products globally and will track our progress on a regular basis. Secondly our three big sustainability goals are backed by more than 50 quantified, time-bound targets against which we will publicly track our progress through our annual Unilever Sustainable Living Plan Report.
You mentioned growth. Looking at the developed world where economies are stagnant, if not shrinking, where do you see the growth coming from?
As far as our growth is concerned, about 70-80 per cent comes from the emerging markets that now contribute 54 per cent of our global revenues. We are therefore uniquely placed with the right geographical balance. In the next ten years, we expect a major portion of our revenue growth to come from the emerging markets. Developing and emerging markets are absolutely important, but so is growing in the more established markets. It's critical to have a balance in terms of both geographies and demographics.
How is your business in the Middle East?
We have a long established business here — a region inhabited by 340 million people of which 50 per cent are below the age of 25. There are plenty of opportunities for market development. Per capita usage of many of our products — deodorants, for example, is very low as compared to the developed markets. This therefore creates tremendous opportunities for us to grow — by generating awareness among people on health and hygiene issues.
Similarly, by encouraging our consumers to brush their teeth twice a day, we could expand the market eight times. According to research, per capita consumption of toothpaste is among the lowest in Egypt.
Here again, through education and by raising awareness we can change consumer behaviour and help develop the toothpaste market.
We envisage that 70 per cent of our future growth in the region is going to come from market development.
Like many other emerging markets we have strong roots in the Middle East, where we have over 4,000 employees and our turnover for our North Africa Middle East (NAME) business is well above $1 billion (Dh3.67 billion).
North Africa and Middle East is one of the fastest growing regions of the world and a large part of our turnover comes from leadership positions in these markets. We have nine manufacturing sites across North Africa Middle East, and more than 80 per cent of the products we sell are manufactured within the region.
Through our business we help a large number of farmers, producers, manufacturers, suppliers and dealers of our products thereby indirectly supporting the livelihood of hundreds of thousands of people.
What about your investment in the region? Any plans to set up more manufacturing units?
In the last three years we have invested over $600 million in building our brands, developing the markets and in modernising/expanding our manufacturing and logistics infrastructure. We have a long term commitment to the region and will continue to invest.
What is your view of the current global economic situation? When do you think we might recover?
We are living in an uncertain world. It is difficult to predict the turn of events and how long it will take for the global economy to recover. It's not going to be a quick fix.
There is more economic volatility in the developed world than in the emerging one. Fortunately for us in Unilever we have an excellent balance across the developed and developing and emerging markets.
How did the Arab Spring affect your business in the region?
Our business was impacted but despite the turmoil across the region we have continued to grow.
Take the case of Egypt, in the initial stages (of the unrest) our business did get affected but subsequently we recovered and our business is now growing strongly.
This in many ways reflects our inherent strengths, the resilience of our business and the immense amount of consumer loyalty our brands command.
We have a long-term commitment to the North Africa and Middle East region.
social responsibility
- By 2020, help more than a billion to improve their hygiene habits.
- By 2020, bring safe drinking water to 500 million people.
- By 2020, halve the environmental footprint of the products as the business grows.
- Halve waste associated with the disposal of Unilever's products by 2020.
- By 2015, reduce paper consumption by 30 per cent per head in 21 countries.
- By 2013, all paper-based materials in offices will be sourced from either certified sustainable forests or recycled sources.
- By 2020, 100 per cent of agricultural inputs will be sourced sustainably.
- By 2020, halve the water consumption associated with the use of Unilever products.
Profile
Harish Manwani, chief operating officer, Unilever.
Harish Manwani is an honours graduate from Mumbai University and has a master's degree in management studies. He also attended the Advanced Management Programme at Harvard Business School.
He joined Hindustan Lever (HLL) in 1976, becoming a member of the HLL board 1995 as director responsible for the Personal Products business.
As category leader for Personal Products, he also held regional responsibility for the Central Asia and Middle East business group.
In 2000, he moved to the UK as senior vice president, Global Hair Care and Oral Care, and in 2001 was appointed president, Home and Personal Care, Latin America business group. He also served as chairman of Unilever's Latin America Advisory Council.
In 2004, he was appointed president and CEO of the HPC North America business group, and in April 2005 joined the Unilever Executive as president, Asia Africa. He is also non-executive chairman of Hindustan Lever and is currently a member of the Executive Board of the Indian School of Business.
On September 1, 2011, he was appointed chief operating officer of Unilever.
Harish is married and has two daughters. He spends his leisure time with his family and enjoys playing golf and an occasional game of bridge.
