Unilever wants retail closer
Valor Econômico 09/17/10
As he enters one of the rooms of the first (and only) Center of Innovation of Unilever in Latin America, Kees Kruythoff does not contain himself. "Pretty cool, isn't it? Very cool", repeats the CEO of the company in the country, who immediately starts giving the details of the construction, with an uncontrollable smile on his face. With 700 square meters and named Customer Insight and Innovation Center (CiiC), the space occupies practically an entire floor of one of the buildings of Unilever, in the South Side of São Paulo. There are several environments there, such as meeting rooms, kitchen to test products and even a minimarket to be used as a laboratory. In one of the rooms, there is a projection of a store a huge wall with 10 meters of length. It is possible to interact with the image. You have the feeling you are inside a supermarket, touching the products.There, Unilever plans to meet with all retailers in the country and Latin America. The agenda is full. Meetings every two days are already scheduled with customers and among employees of the company. "We want to get closer to the retail. We have to know what they think, tell what we're doing and mainly, show that they can be more profitable", says the Executive. Kruythoff gives examples. He says that in supermarkets across the country, "there are entire shelves with rice and beans", but for those products with higher added value, "the spaces are very small". "Isn‘t it possible to have more balance there? Commodities have a much smaller margin when compared to other items", he says, discretely defending the portfolio of Unilever, with global sales of € 40 billion in 2009 and manufacturer of 400 brands in the world, as Knorr broths, Ades juices and Seda shampoos.
The innovation center built in Brazil (in only 68 days and six months of project) will be the fifth of Univeler in the world. Only New York, London, Shanghai and Paris have a space like that. The place shall be officially inaugurated on September 28 and the International CEO, Paul Polman, may come to Brazil to see the space. The company does not disclose the value of the investment. It is a project that gives the right notion of what the subsidiary plans for the future. Nevertheless, everything will depend on the rhythm of business in both countries. Here, the company grew between 5% and 8% a year in the past half decade. It grew nearly 7% in 2009, when the group in the world shrank 1.7% - and the sales in the United States (in a year of global crisis) fell 4.7%.
To get there, the Brazilian subsidiary would have to grow more than 50% in ten years (at the current pace, that might take place within seven or eight years) and expect little consumption by the Americans. "We have capacity to be the biggest. They (Americans) are growing less", says Kruythoff. In 2008, the Executive said he would turn the local operation into the second largest of the group until 2012. The branch overcame the UK in 2009. To meet the new goal, the company may have to be more aggressive and bring new brands to the country. Rivals like Procter & Gamble and Reckitt Benckiser have already informed they will speed up the launchings here. Besides the competition abroad, Kruythoff will have to deal with rivals ready to put their hands on part of his market.