Unilever expects return of poverty to Europe.
Monday 27 August 2012
Anglo-Dutch food to detergents group Unilever expects poverty to return to Europe and is adapting its strategy accordingly, European chief Jan Zijderveld told the Financial Times Deutschland on Monday.
Unilever is introducing smaller packaging for its cleaning, detergent and hygiene products which sell at a lower price than in the usual larger packets and containers.
'If a Spanish shopper has €17 for the shopping, I cannot sell him a detergent that costs half his budget,' Zijderveld told the paper.
The new strategy is based on one Unilever has been successfully using in Asia where, for instance, they sell individual amounts of shampoo for one wash at 2 or 3 cents. 'We still make money, but we've forgotten how to do this in Europe,' said Zijderveld.
In Spain, Unilever is already selling smaller packets of detergent with enough content for five washes. And in Greece the company is selling small packs of mayonnaise and apple sauce.
Where food products are concerned, Zijderveld says there is still profit to be made so long as the presentation is attractive. 'Why does no one sell chicken like Apple sells its products?' he told the paper.
Is this a smart move? Have your say using the comment box below.
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Yes it is a good idea. Infact, the model that Unilever followed in India was social entrepreneurship. To transport these small packets one does not need trailers or trucks. Unemployed people can collect these for a small fee and sell it in their network. By this Unilever saves on transportation and unemployed people are now businessmen. Win-win
By Neel | 27 August 2012 3:53 PMSmaller packages are always more expensive per unit. So no, it's not a good idea. At least not for the (poor) consumer.
By José Pedro Magalhães | 27 August 2012 6:02 PM´Nice idea, but a very old one!
Go to poverty stricken areas around the world and see single portions of everything from Coffee to shampoo hanging in long strings behind metal bars. After 10 trips to Asia you get used to that, but coming back to NL is always culture shock..
Seeing a four year old girl buy every morning 1 coffee stick & 2 small pieces of bread to share with her parents is not something that will ever happen in Europe...perhaps an outbreak of war first..yes!
By The visitor | 27 August 2012 7:09 PMYes, I think so, if the pricing is fair. Often when buying larger packages there is often waste as you can't use them up before they go bad.
By Al | 27 August 2012 7:17 PMIf an average Spanish shopper spends E17 for the shopping every day, than I would welcome him with roses.
Also, I don't think people will start buying small packages not only because smaller packages are more expensive.
By Karel | 27 August 2012 8:06 PMI bet that in fact some smaller packages with shampoo etc. are together more expensive than same amount but in 1 bigger pack. And that is typical move... making consumer stupid. At the end of the day that is big corporation that makes profit, not consumer.
By Mr Writer | 27 August 2012 9:18 PMThe economy is not going to be bad. There will always be a place for these small amount packages. They are very convenient for the traveler and worth the extra expense. A small tooth paste fits in my suit pocket. A small laundry soap for my hotel for just 5 days using the sink. A number of such products is much lighter, and will fit in my small briefcase, or I can put them in my pocket and ride a bicycle.
By NLwalkAmsterdm | 28 August 2012 1:29 AM@Neel: are we really helping people in this way? I work at an org that supposedly 'helps' people in developing countries, but I often wonder if introducing them to our form of capitalism is really a good idea. Look at the news and look at the mess we are making of our capitalistic 'free world' and our environment. Do we really have any thing to teach or give to these people? or are we placing a temp bandage on a much much larger problem, a problem that is so big we ourselves do not even dare to admit it? this planet has limited space, there is no way around that
By Bill | 28 August 2012 6:53 AMKarel, I think that would be E17 per week, or per fortnight, not per day.
By Craig | 28 August 2012 8:46 AM@Mr Writer: of course the price per unit is higher but I guess (almost) all consumers already know that. The point here is that if one is poor one does not have a bigger amount at that moment to be able to spend so s/he would rather choose a small package than nothing at all.
By the_expat | 28 August 2012 11:23 AMTo get consumers' heart bit is absolutely necessary for suppliers. Is that the case for Unilever? Mr Zijderveld has to explain how that fits to Unilever Vision to reduce environmental impact as well as how Unilever compensates SC investments for economies of scale. Finally, is Unilever dare for profits decline?
By Yannis Kaplanelis | 28 August 2012 5:08 PMYeay, good old poverty !!
By Ben | 28 August 2012 7:33 PMTo those saying price is higher for these smaller packets - that is not always the case. In India, smaller sachets of shampoos were actually found to be cheaper than big packets if looked at from a per unit cost (include fixed costs, transportation, storage, etc). Read this: http://www.nextbillion.net/blogpost.aspx?blogid=2115
By RD | 29 August 2012 4:20 AM@Bill, while ur argument begets a broader discussion, this standalone example can actually be better for those with lesser means
Funny though they mention Asia. Latin America has -as far as I remember, which is half a century- always had smaller packaging. Perhaps Mr. Zijderveld forgot that as well?
By Carlitos | 29 August 2012 9:26 AMThis means TONS more garbage!!!! Terrible idea for the environment = long term higher costs for everyone..Why not bulk containers at the store and you bring your own container/choose a size/buy one at the store and fill it yourself? This disposable packaging idea has to end anyway...
By LJM | 29 August 2012 12:55 PM