How to Make It in Africa? Unilever Listens to the Consumer
Tuesday, December 13, 2011
“There is a growing realisation that the future of Africa is based around a consumer rather than mining. This is a consumer that has been under-served and over-charged,” said Frank Braeken, Unilever executive vice-president for Africa at the High Growth Markets Summit at the end of September 2011.
But Braeken pointed out that consumers in Ghana spend just one fifth per capita on Unilever’s products than their peers in South Africa. Kenyans spend even less, and those in Tanzania a smaller amount still. Thus for Mr Braeken there is a huge untapped source of consumers – most of whom are low-income, also known as Bottom of the Pyramid (BOP), consumers.Unilever, a consumer goods company, has over a century of experience on the continent and produces annual sales of more than 5 billion euros in Africa. The group employs 40,000 people in the region and has offices and factories in 40 locations. It can thus be deduced that Unilever “has made it in Africa”!
How we made it in Africa’s Loraine Stander asked Frank Braeken how Unilever is reaching the BOP consumer.
What is Unilever’s strategy to reach the BOP consumer?
Frank Braeken: Our strategy is to increase our social impact by ensuring that our products meet the needs of people everywhere for balanced nutrition, good hygiene and the confidence which comes from having clean clothes, clean hair and healthy skin. Unilever is strongly committed to serve the BOP in Africa and to this end many of our products are tailored to meet specific African consumer demand.
Braeken is known to emphasise: “What we need to do is much more listening to what the African consumer needs.”
This credo is illustrated by a shop in Kenya’s largest slum. The small shop is selling everyday necessities, that range from margarine and washing detergent to cooking fat and toothpaste. What is noticeable is that these goods are sold in small packages, known as low unit packs (LUPs), weighing from 45 grams to just four grams, and costing from as little as half a cent. Though all the goods are now sold in branded packaging, the shop owner has been selling the same items in similar small portions for decades to the low-income market. He bought big packs and then resold them in smaller portions to his customers. Unilever was one of the first companies that bought into this concept.
By establishing a brand through LUPs, allegiance would be formed as the consumer’s purchasing power increases.