Unilever

views updated May 23 2018

Unilever

P.O. Box 68
Unilever House
200 Victoria Embankment
London, EC4P 4BQ
United Kingdom
Telephone: (+44 20) 7822 5252
Fax: (+44 20) 7822 5951
Web site: http://www.unilever.com

Public Company
Incorporated: 1929 as Unilever Limited and Unilever N.V.
Employees: 179,000
Sales: EUR 39.64 billion ($52.32 billion) (2006)
Stock Exchanges: Euronext Amsterdam London New York
Ticker Symbols: UNA (Euronext); ULVR (London); UN (New York)
NAIC: 311223 Other Oilseed Processing; 311225 Fats and Oils Refining and Blending; 311411 Frozen Fruit, Juice, and Vegetable Processing; 311412 Frozen Specialty Food Manufacturing; 311421 Fruit and Vegetable Canning; 311520 Ice Cream and Frozen Dessert Manufacturing; 311920 Coffee and Tea Manufacturing; 311941 Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing; 311942 Spice and Extract Manufacturing; 311999 All Other Miscellaneous Food Manufacturing; 312111 Soft Drink Manufacturing; 325611 Soap and Other Detergent Manufacturing; 325613 Surface Active Agent Manufacturing; 325620 Toilet Preparation Manufacturing

SOAP AND MARGARINE ORIGINS

THE BIRTH OF UNILEVER

THE GREAT DEPRESSION

POSTWAR ERA: ADAPTING TO NEW MARKETS AND TECHNOLOGY

RESTRUCTURING AND MAJOR ACQUISITIONS

POSITIONING FOR THE 21ST CENTURY

STRUGGLING IN THE EARLY 21ST CENTURY

PRINCIPAL SUBSIDIARIES

PRINCIPAL COMPETITORS

SOAP AND MARGARINE ORIGINS

William Hesketh Lever, later Lord Leverhulme, was born in Bolton, England, in 1851. The founder of Lever Brothers, Lever had a personality that combined “the rationality of the business man with the restless ambitions of the explorer,” according to Unilever historian Charles Wilson.

During the depression of the 1880s, Lever, then a salesman for his father’s wholesale grocery business, recognized the advantages of not only selling, but also manufacturing, soap, a noncyclical necessity item. His father, James Lever, initially was opposed to the idea, believing that they should remain grocers, not manufacturers. He softened, however, in the face of his son’s determination. In 1885 William established a soap factory in Warrington as a branch of the family grocery business. Within a short time Lever was selling his soap throughout the United Kingdom, as well as in continental Europe, North America, Australia, and South Africa.

William also began a tradition that lasted well into the 20th century of producing all its raw components. Lever Brothers, a vertically integrated company, grew to include milling operations used to crush seeds into vegetable oil for margarine as well as packaging and transporting businesses for all of its products, which then included Lux, Lifebuoy, Rinso, and Sunlight soaps.

In 1914, as the German Navy began to threaten the delivery of food imports, particularly Danish butter and Dutch margarine, to Britain, the British government asked William Lever to produce margarine. He eagerly accepted the opportunity, believing that the margarine business would be compatible with the soap business because the products both required oils and fats as raw materials. Lever Brothers’ successful diversification, however, put the company in competition with Jurgens and Van den Bergh, two leading Dutch margarine companies.

THE BIRTH OF UNILEVER

Jurgens and Van den Bergh both began commercial production of margarine in 1872. Fierce competitors for the remainder of the century, Van den Bergh and Jurgens decided in 1908 to pool their interests in an effort to make the best of the poor economic situation that existed in most of the world. Competition in the margarine industry had intensified, fueled by an increasing number of smaller firms, which were exporting their products and lowering their prices to get a piece of the market. Van den Bergh eliminated the potential for problems such as double taxation, which arose from its interests in both Holland and the United Kingdom, by creating and incorporating two parent companies for itself, one in Holland and one in England. In 1920 Jurgens and Van de Bergh decided there was strength in numbers and joined with another margarine manufacturer, Schicht, in Bohemia. In 1927 the three companies, borrowing the ideal of a dual structure from Van de Bergh, formed Margarine Union Limited, a group of Dutch firms with interests in England, and Margarine Unie N.V., located in Holland.

Through the middle and late 1920s, the oil and fat trades continued to grow. Although the activities of Margarine Unie and Margarine Union were focused on edible fats (margarine), the companies had held soap interests throughout Europe for years. Similarly, although Lever Brothers had produced margarine since World War I, its focus was soap. After two years of discussion, the companies decided that an “alliance wasted less of everybody’s substance than hostility” and merged on September 2, 1929.

COMPANY PERSPECTIVES

Our mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life.

As it does today, the newly formed Unilever consisted of two holding companies: Unilever Limited, previously Margarine Union; and Unilever N.V., formerly Margarine Unie. The new organization included an equalization agreement to assure equal profits for shareholders of both companies, as well as

identically structured boards. Unilever’s parent companies were actually holding companies supervising the operations of hundreds of manufacturing and trading firms worldwide. The end result of the merger was a company that bought and processed more than a third of the world’s commercial oils and fats and traded more products in more places than any other company in the world. Its manufacturing activities, which included detergents and toilet preparations, margarine and edible fats, food products, and oil milling and auxiliary businesses, were joined by a need for similar raw and refined materials, such as coconut, palm, cottonseed, and soybean oil, as well as whale oil and animal fats.

KEY DATES

1872:: Two Dutch firms, Jurgens and Van den Bergh, begin commercial production of margarine.
1885:: William Hesketh Lever establishes soap factory in Warrington, marking the beginning of Lever Brothers.
1908:: Jurgens and Van den Bergh pool their interests.
1914:: Lever begins producing margarine at the request of the British government.
1927:: Jurgens and Van den Bergh create dualstructured Margarine Union Limited and Margarine Unie N.V.
1929:: Margarine Union/Margarine Unie merges with Lever Brothers to create Unilever, with dual Anglo-Dutch structure.
1930:: Special committee is established as a board of directors over the British and Dutch Unilever holding companies.
1937:: Reorganization equalizes the assets of the Dutch and the British groups of Unilever; Thomas J. Lipton Company, U.S. manufacturer of tea, is acquired.
1957:: Company acquires U.K. frozen foods maker Birds Eye.
1961:: U.S. ice cream novelty maker Good Humoris acquired.
1968:: Proposed merger with Allied Breweries Ltd. is cancelled.
1978:: Unilever acquires specialty chemicals company National Starch & Chemical.
1984:: Buying spree begins that will last until 1988 and result in about 80 companies being acquired; Brooke Bond, the leading European tea company, is acquired through hostile takeover.
1986:: Company acquires Chesebrough-Pond’s.
1994:: The launch of a new laundry detergent in Europe turns into a public relations disaster when tests reveal that it can damage clothes under certain conditions.
1996:: Fundamental management reorganization is launched, including the replacing of the special committee with a seven-member executive committee.
1997:: Specialty chemicals operations, including National Starch, are sold to Imperial Chemical Industries PLC for about $8 billion.
1999:: Company announces that it will eliminate about 1,200 of its brands to focus on around 400 regionally or globally powerful brands.
2000:: Unilever acquires Amora Maille, the Slim-Fast and Ben & Jerry’s brands, and Bestfoods.
2005:: Structural changes are implemented that include replacing dual chairmen with a nonexecutive chairman and a group chief executive.
2006:: Company sells the bulk of its European frozen foods operations, including the Birds Eye brand.

THE GREAT DEPRESSION

The Great Depression, which began not long after the new company was formed, affected every aspect of Unilever’s multifaceted operation: its raw material companies faced price decreases of 30 to 40 percent in the first year alone; cattle cake, sold as a product of its oil mills, suffered with the decline of the agricultural industry; margarine and other edible fats were affected by damaging competition as the price of butter plummeted; and the company’s retail grocery and fish shops saw declining sales.

As prices and profits around the world threatened to collapse, Unilever had to act quickly to build up an efficient system of control. The “special committee” was established in September 1930 to do that. Operating as a board of directors over the two boards the company had, the special committee was designed to balance Dutch and British interests and act as an inner cabinet for the organization. It also began administering two committees established to deal with Unilever’s world affairs: a continental committee to handle businesses in Europe and an overseas committee to supervise business elsewhere.

A new generation of management led Unilever through the 1930s: Francis D’Arcy Cooper, who had been chairman of Lever Brothers since William Lever’s death in 1925; Georg Schicht, the former chairman of Schicht Company; and Paul Rijkens, who succeeded Anton Jurgens as chairman of Jurgens in 1933. It was Cooper who seemed to lead the efforts to turn the various companies that comprised Unilever into one Anglo-Dutch team. It was also Cooper who convinced the board of the necessity for a reorganization in 1937, when the relationship between the profit-earning capacities of the Dutch and British companies found itself reversed.

Originally, about two-thirds of Unilever’s profits were earned by the Dutch group and one-third by the British group. By 1937, however, because of increasing trade conflicts in Europe, particularly in Germany, the situation had reversed. By selling the Lever company’s assets outside Great Britain, including Lever Brothers Company in the United States, to the Dutch arm of Unilever, the assets of the two groups were redistributed so that they would be nearly equal in volume and profits, which had always been the objective of the two parent companies.

Before 1945 the oils and fats industries had progressed fairly smoothly. The only major industry breakthroughs were the discovery of the hydrogenation process just before World War I, which enabled manufacturers to turn oils into hard fats, and the possibility of adding vitamins to margarine in the 1920s, which created an opportunity for new health-related product claims. However, it was not until the end of World War II that the industry in general, including Unilever, began to recognize the important relationship between marketing and research. Meantime, Unilever expanded its U.S. operations through two important acquisitions: Thomas J. Lipton Company, manufacturer of tea (1937), and the Pepsodent brand of toothpaste (1944).

POSTWAR ERA: ADAPTING TO NEW MARKETS AND TECHNOLOGY

Although Unilever’s growth until the mid-1940s was a result of expanded product lines and plant capacities, its greatest achievements between 1945 and 1965 were its adaptation to new markets and technology. The decade following World War II was a period of recovery, culminating by the early 1950s in rapid economic growth in much of the Western world. Until 1955 demand continued to rise and competition was not a major issue. Afterward, however, profit margins dropped, competition in Europe and North America sharpened, and success was less assured. Unilever’s strategy was to acquire companies in new areas, particularly food and chemical manufacturers. Among the postwar acquisitions were U.K. frozen foods maker Birds Eye (1957) and U.S. ice cream novelty maker Good Humor (1961).

Before the formation of Unilever, Lever Brothers had coped with overseas expansion by purchasing two factories in the United States, one in Boston and one in Philadelphia. Following World War II, Unilever found that it lacked the scientific resources needed to compete with U.S. companies in research and development. Previously, key concerns for the soap industry revolved around color, scent, lather, and how well the products adapted to changing fabrics. Following the war—to the dismay of Unilever and its U.S. subsidiary, Lever Brothers Company—development efforts in the United States succeeded in creating a nonsoap, synthetic detergent powder (Procter & Gamble Company’s Tide), which had superior cleaning powers and did not form insoluble deposits in plumbing systems in hard water. The disappointment spurred Unilever to value research as highly as marketing and sales. Lever Brothers had three detergent plants in production by 1950 but remained behind in the industry for some time.

Because the primary ingredients of the new detergents were petrochemicals, Unilever found itself involved in chemical technology. In the synthetic detergent market, each geographic area required a different kind of product depending on the way consumers washed their clothes and the type of water available to them. The new detergents gave rise to new problems, however: the foam that detergents left in sewage systems and rivers had become a major issue by the late 1950s. As a result, by 1965 Unilever had introduced biodegradable products in the United States, the United Kingdom, and West Germany.

Throughout the postwar era, Unilever continued to invest in research and research facilities. One of its major establishments, the Port Sunlight facility in Cheshire that William Lever had founded in the 1920s, researched detergents, chemicals, and timber. In Bedfordshire, the Colworth House facility continued research efforts in food preservation, animal nutrition, and health problems associated with toothpaste, shampoo, and other personal products. By 1965 the company had 11 major research establishments throughout the world, including laboratories in continental Europe, the United Kingdom, the United States, and India.

One example of how Unilever effectively answered market demands was its continuing research in margarine. When first developed, margarine was simply a substitute for the butter that was in short supply during wartime. However, when butter once again became plentiful, the product needed to offer other advantages to the consumer. Research focused on methods to improve the quality of margarine, such as making it easier to spread, more flavorful, and more nutritious. This was the primary emphasis at Unilever’s Vlaardingen laboratory. By enhancing techniques used to refine soybean oil, the company succeeded in improving the raw materials available for margarine production while at the same time achieving vast savings, because soybean oil itself was inexpensive.

The advent of the European Economic Community, or Common Market, also created new opportunities for Unilever. The company held several conferences throughout the 1960s to discuss strategies for dealing with marketing, factory location, tariffs, cartels, and transport issues created by the Common Market. Of particular importance was the need to determine the best places for production under changing economic conditions. Since the late 19th century, when the companies that comprised Unilever had set up factories in other European countries to avoid tariff restrictions, Unilever’s products had been manufactured wherever it was most economical. Under the Common Market, many of the tariff restrictions that had spawned the multinational facilities were eliminated, giving the company an opportunity to consolidate operations and concentrate production in lower-cost countries.

As part of its ongoing diversification drive, Unilever in late 1968 agreed to merge with Allied Breweries Ltd., then the second largest brewer in the United Kingdom. The merger was referred to the Monopolies and Mergers Commission, and the U.K. regulatory agency approved the deal in June 1969. By that time, however, Unilever’s shares had fallen 23 percent since the beginning of the year, and the deal, which had been based on an exchange of shares, was abandoned.

Unilever continued to seek opportunities to diversify in the 1970s, completing a series of modest deals in the early and middle years of the decade. In 1978, however, the company completed a major acquisition that significantly increased its presence in the U.S. market and made it a major player in specialty chemicals. Unilever spent $487 million for National Starch & Chemical Corporation in what at the time was the largest takeover of a U.S. firm by a European company. National Starch was a leading producer of adhesives, starch, and specialty organic chemicals.

RESTRUCTURING AND MAJOR ACQUISITIONS

In the 1980s Unilever undertook a massive restructuring. The company sold most of its service and ancillary businesses, such as transport, packaging, advertising, and other services that were readily available on the market, and went on a buying spree, snapping up some 80 companies between 1984 and 1988. The restructuring was designed to concentrate the company in “those businesses that we properly understand, in which we have critical mass, and where we believe we have a strong, competitive future,” Unilever PLC Chairman M. R. Angus told Management Today in 1988. Specifically, Unilever’s core businesses were detergents, foods, toiletries, and specialty chemicals.

In addition to increasing profitability in core areas, restructuring also helped Unilever execute its biggest acquisition to date, that of Chesebrough-Pond’s in the United States in 1986. A company with sales of nearly $3 billion, Chesebrough owned such brands as Vaseline Intensive Care, Pond’s Cold Cream, and Ragu spaghetti sauce. The acquisition allowed Unilever to fill out its international personal products business, particularly in the United States, where Unilever saw a higher profit potential. Another significant 1986 purchase was that of Naarden International, a Dutch producer of fragrances and food flavors. Naarden was subsequently merged with Unilever’s existing operations in this sector to form Quest International, which ranked as the number two player in the worldwide flavors and fragrances industry.

During the 1980s Unilever’s detergent products posted a 50 percent growth in operating profit, while food products grew at a faster than normal rate. In the United States, plans to take on longtime rival Procter & Gamble were successful in 1984, when Unilever’s Wisk moved P&G’s Cheer out of the number two spot in the laundry detergent market. In Europe, Unilever in 1984 completed its first hostile takeover attempt in 15 years, acquiring the British company Brooke Bond, the leading European tea company, for £376 million. Brooke Bond complemented Unilever’s Lipton brand, the leader in the United States. Two years later, the company launched Wisk in the United Kingdom, as well as Breeze, its first soap powder introduced in the United Kingdom since the debut of Surf more than 30 years earlier.

In 1989 Unilever became a major player in the world’s perfume and cosmetic industry through three more acquisitions. It obtained Schering-Plough Corporation’s perfume business in Europe; the Calvin Klein business from Minnetonka, Inc.; and, by far the largest purchase of the three, Fabergé Inc., the American producer of Chloe, Lagerfeld, and Fendi perfumes, for $1.55 billion. The upper-end cosmetics market was a high-margin business, and Unilever planned to step up marketing of its new products to raise sales.

POSITIONING FOR THE 21ST CENTURY

As it entered the 1990s, Unilever had virtually completed reorganizing its European business to better compete within the evolving single market in that region. In 1991 the company further refined its operations by selling the last of its packaging businesses and by making provisions for the eventual sales of the majority of its agribusinesses.

Unilever’s flexible management structure and diverse product range were integral to its survival in the rapidly changing international market. In a 1992 Harvard Business Review article, Chairman and CEO Floris A. Maljers explained Unilever’s management structure: “The very nature of our products required proximity to local markets; economies of scale in certain functions justify a number of head-office departments; and the need to benefit from everybody’s creativity and experience makes a sophisticated means of transferring information across our organization highly desirable. All of these factors led to our present structure: a matrix of individual managers around the world who nonetheless share a common vision and understanding of corporate strategy.”

Despite poor performances by some of its subsidiaries and recessions in Europe and North America, Unilever’s broad product range led to overall profit increases in both 1990 and 1991. In 1990 Unilever made substantial inroads into the newly opened markets created by the unification of Germany. The company began producing its Rama margarine at a former East German state plant in Chermnitz, established a task force to select sites for 23 Nordsee fish stores, and began distributing ice cream and frozen novelties to retailers in eastern Germany.

In 1991 Unilever continued to battle with rival Procter & Gamble over the newly opened markets of the former Soviet Union. Unilever purchased an 80 percent stake in the Polish detergent firm Pollena Bydgoscz for $20 million, changing the name to Lever Polska, the first laundry detergent manufacturer to be privatized in Poland. The company earmarked approximately $24 million for product line expansions, including a fabric conditioner and household cleaning products. Also in 1991 Michael Perry was named the U.K. co-chairman of Unilever.

Profits in Unilever’s personal products division were down 11 percent in 1991 because of sluggish markets in the United States and only moderate growth in European markets. Unilever’s newly-purchased Elizabeth Arden and Calvin Klein, however, posted strong growth, supported by strong retailer relationships and $24 million in advertising expenditures. Such growth occurred despite an overall drop in department store cosmetic sales of 9 percent from 1987 to 1992. In 1992, though, Elizabeth Arden profits began slipping, prompting the resignation of Joseph F. Ronchetti, Arden’s CEO since 1978. Unilever underwent further restructuring of its personal products division, creating a prestigious subdivision geared toward introducing Calvin Klein and Elizabeth Arden into overseas markets.

Unilever’s fastest-growing market in the early 1990s was in Asia. Although Unilever had been operating in Asia since its earliest days, the company was just beginning to tap into the region’s newly acquired wealth. Asian sales of personal products, detergent, and packaged foods were growing more than twice as fast as sales in the United States and Europe. By 1992 Unilever was composed of some 500 companies conducting business in 75 different countries.

Unilever continued to make acquisitions in the mid-1990s, completing more than 100 purchases between 1992 and 1996, more than half of which were in foods. In 1993 Unilever gained the number one position in the U.S. ice cream market through the completion of two acquisitions. The company paid $155 million to Empire of Carolina Inc. for the Klondike and Popsicle brands, and about $215 million for the ice cream business of Philip Morris’s Kraft General Foods unit, which included the Sealtest and Breyers brands. The acquired brands were merged with the Good Humor line within Good Humor Breyers Ice Cream Company, a subsidiary based in Green Bay, Wisconsin. Also in 1993 Unilever launched a restructuring, taking a $750 million charge against earnings to close or consolidate 60 plants and lay off 7,500 employees.

One of the largest acquisitions of this period was the 1996 takeover of Chicago-based Helene Curtis Industries, Inc., manufacturer and marketer of personal care products, primarily shampoo and conditioners, hand and body lotions, and deodorants and antiperspirants. Purchased for about $770 million, Helene Curtis’s portfolio included such brands as Suave, Finesse, and Salon Selectives. Another significant 1996 acquisition was that of Northbrook, Illinois-based Diversey Corporation, a maker of institutional chemical cleansers and sanitizers, and Unilever’s first foray into the industrial cleaning sector.

Unilever and Procter & Gamble (P&G) began battling again in 1994, this time for supremacy in the European detergent sector. Unilever aggressively went after P&G’s market-leading brand, Ariel, with a new soap marketed under the names Persil Power, Omo Power, and Skip Power. Unilever spent $175 million developing the product and another $292 million marketing it during 1994. The product included a manganese complex molecule that Unilever claimed cleaned clothes better at lower temperatures than rival products. P&G conducted tests on Persil Power, however, which indicated that the detergent resulted in abnormal wear after as few as 15 washings. When P&G publicized its findings, Unilever sued the company for slander. However, the suit was quickly withdrawn after Unilever admitted that the detergent did indeed contain a flaw that had not been uncovered in the prelaunch testing that could damage clothes when exposed to a particular combination of dyes. Unilever reformulated the product, but not before it had turned into a public relations nightmare. In the end, the Power formula was abandoned entirely and Unilever took a £57 million write-off in its 1994 accounts.

According to Andrew Lorenz, writing in the July 1996 issue of Management Today, the Persil Power debacle served as a catalyst for a fundamental management reorganization. On September 1, 1996, the three-person special committee that had run Unilever since its formation in 1929 was replaced by a seven-member executive committee composed of the chairmen of Uni-lever N.V. and Unilever PLC and five high-ranking Uni-lever executives. At the same time the company did away with a complex two-tiered management structure that included both worldwide product management groups and regional management groups. In their place was created a single team of 14 business presidents, with each president responsible for a portion of the European operations (e.g., the food and beverage Europe group), a portion of the North American operations (e.g., the home and personal care North America group), or a region of the rest of the world (Africa, Latin America, etc.). As was typical of the time, this streamlining was aimed at improving decision making by pushing authority down to a lower level. Along with this major reorganization came a change in the chairmanships, with Niall FitzGerald replacing Michael Perry as U.K. co-chairman; an Irishman, FitzGerald became the first non-English, non-Dutch to serve as co-chairman, and he also reached the post despite having been in charge of Unilever’s detergent operations during the Persil Power debacle. Continuing on the Dutch side was Morris Tabaksblat, who had replaced Maljers as Dutch co-chairman in 1994.

In the late 1990s FitzGerald and Tabaksblat oversaw a comprehensive review of Unilever’s wide-ranging businesses in an effort to focus on the strongest core areas: ice cream, margarines, tea-based beverages, detergents, personal soaps, skin care products, and prestige fragrances. Several other areas were identified as “developing” core areas: frozen foods, culinary products (sauces and side dishes), hair care products, oral care products, deodorants, household care products, and industrial cleaning products. Businesses outside of these areas were candidates for disposal. In 1996 the company sold its mass-market cosmetics business, its few remaining animal feed operations, some oil-processing units, and a U.K. franchiser of Caterpillar Inc. heavy equipment. Unilever completed its largest disposal the following year, selling its specialty chemicals business, including National Starch and Quest International, to Imperial Chemical Industries PLC for about $8 billion. The sale resulted in a net profit of $4.55 billion, part of which cleared Unilever’s $2.78 billion debt; the proceeds also contributed to a war chest that expanded to $9.6 billion. The company made one large purchase in 1997, the $930 million acquisition of Kibon S.A. Indústrias Alimenticia, the number one ice cream maker in Brazil. In 1998 Unilever sold its Plant Breeding International Cambridge Limited unit to Monsanto for about $525 million. Unilever also sold its Nordsee fast-food fish chain in the late 1990s.

In early 1999 Unilever spent a large portion of its war chest on a special dividend to shareholders of £5 billion ($8.1 billion). In July of that year Tabaksblat retired and was replaced as Dutch cochairman by Antony Burgmans. Two months later Unilever announced that it would eliminate about 1,200 of its brands to focus on around 400 regionally or globally powerful brands, a group that accounted for almost 90 percent of 1998 revenue. This sweeping overhaul of the product portfolio was aimed at increasing annual growth rates from 4 percent to 6 to 8 percent and at eventually reaping annual savings of £1 billion. Unilever thus ended the 20th century with a strategic plan, later called the “Path to Growth,” that included a focus on top brands within core market sectors and an emphasis on growth within developing countries.

STRUGGLING IN THE EARLY 21ST CENTURY

As part of the Path to Growth initiative, Unilever sold around 150 businesses through the end of 2004, by which time the company’s top 400 brands were generating 93 percent of sales (compared to 75 percent in 1999), and it had cut 55,000 jobs and shuttered 145 factories. In January 2001, in a EUR 244 million deal, Unilever sold Elizabeth Arden to Miami Lakes, Florida-based FFI Fragrances, which later renamed itself Elizabeth Arden, Inc. Later that year Unipath Ltd., Unilever’s women’s health diagnostics subsidiary, was sold to Inverness Medical Innovations Inc. of Waltham, Massachusetts, for EUR 166 million, and Unilever also sold its North American frozen fish businesses, including the U.S.-based Gorton’s brand, to the Japanese firm Nippon Suisan Kaisha Limited for $175 million. In May 2002 Unilever sold its DiverseyLever Inc. institutional and industrial cleaning business to Johnson Wax Professional for $900 million in cash and a loan note of $241 million. Johnson Wax subsequently changed its name to JohnsonDiversey, Inc., and Unilever gained a 33 percent stake in this company as a result of the divestment.

While pursuing this disposal program, Unilever simultaneously sought out new engines for growth, completing four significant acquisitions in 2000, three major and one blockbuster. Early in the year, Unilever bought Amora Maille, a producer of gourmet mustard, ketchup, sauces, and salad dressings based in Dijon, France, for EUR 715 million. In May 2000 Unilever spent approximately $2.6 billion for Slim-Fast Foods, a leading manufacturer of weight-management supplements, and also picked up the Ben & Jerry’s ice cream brand for $326 million.

These deals, however, paled in comparison to Unilever’s October 2000 acquisition of Englewood Cliffs, New Jersey-based Bestfoods for EUR 26.08 billion ($22.76 billion). This deal greatly expanded Unilever’s presence in the U.S. foods market and also brought into the company fold two truly global brands, Hellman’s mayonnaise and Knorr soups and sauces. To gain regulatory approval for the deal, Unilever had to unload a number of its European dry soup and bouillon brands, including Oxo, Batchelors, and Royco. These were sold to Campbell Soup Company in a $900 million deal completed in May 2001. Unilever also put Bestfoods’ U.S. baking business, Bestfoods Baking Company, on the auction block, selling it in July 2001 to the Toronto firm George Weston Limited for EUR 1.9 billion. In July 2002 Unilever sold a portfolio of 19 North American food brands it had inherited from Bestfoods to Associated British Foods plc for EUR 383 million. Most of these were corn oil and corn products brands, including Mazola, Argo, Karo, and Golden Griddle.

Although the Path to Growth program by 2003 had succeeded in improving the company’s profitability by a few percentage points, mainly via a $7 billion reduction in annual operating costs, Unilever fell well short of its top-line growth target, as sales of its leading brands grew just 2.5 percent that year. Among the disappointments were sharp declines in growth in frozen foods, household care products, fine fragrances, and Slim-Fast products. Sales of Slim-Fast’s low-calorie diet products dropped precipitously mainly because of the sudden popularity of low-carbohydrate diets. In early 2004 Uni-lever slashed its growth expectations for the following five years, and in September of that year the company was forced to issue its first profits warning, stating that it expected its percentage growth for earnings per share in 2004 to be in the low single digits rather than its previous prediction of a low double-digit percentage increase. Unilever’s shares fell on the news and were trading at about the same level as in 2000.

In the wake of these disappointing results, significant changes were made to the group structure to streamline the management and leadership. In September 2004 FitzGerald retired a year early. He was succeeded as chairman of Unilever PLC by Patrick Cescau, a Frenchman and company veteran who had headed the foods division. Then the following April, Unilever replaced its longstanding dual chairmen structure with the more standard model of a nonexecutive chairman and a group chief executive. Cescau was named the first Unilever group chief executive, while Burgmans was named chairman. Hoping to create a leaner organization, the company simultaneously simplified its management structure by replacing its complex matrix of geographic and brand executives with a new system comprised of three regional chiefs (Europe, the Americas, Asia/Africa) plus heads of two operating units (foods, home and personal care), all of whom began reporting directly to Cescau. At the same time, Unilever moved to reignite sales of its top brands by boosting its investment in advertising and promotion. The company also took the painful step of writing down the value of its troubled Slim-Fast brand by EUR 591 million.

Seeking to further narrow its focus on core businesses with healthier profit margins, Unilever completed two additional significant divestments. In July 2005 it sold the remainder of its perfume business, which included the Calvin Klein and Vera Wang brands, to New York-based Coty, Inc., for $800 million. The following November, Unilever sold the majority of its European frozen foods business to London-based private equity firm Permira Funds for EUR 1.72 billion ($2.19 billion). This included the Birds Eye and Iglo brands but excluded Unilever’s ice cream businesses and its frozen foods unit in Italy. In May 2007 Burgmans resigned as chairman and an outsider occupied that position for the first time. Michael Treschow, a former chief executive of two Swedish firms, Atlas Copco AB and AB Electrolux, succeeded Burgmans. A number of shareholders had been clamoring for such a move, hoping that an outsider might shake up the business. This changeover seemed to impart the desired effect, as Uni-lever in August 2007 announced aggressive new restructuring initiatives, including the slashing of 20,000 jobs—mainly in Europe—over a four-year period and plans to divest businesses with about EUR 2 billion in annual sales. The largest unit placed on the auction block was the company’s struggling North American laundry detergent business, which included the Wisk, All, and Snuggle brands.

In the meantime, Cescau was in the midst of an effort to shift more of the company’s focus to markets with higher growth potential than both the United States (the firm’s largest single market) and its low-growth home base of western Europe. Additional resources were being deployed to emerging markets, such as India and China, that had young populations with fast-growing incomes. In 2006, 41 percent of Unilever’s revenues were generated in the developing world, up from 22 percent in 1990. For the first time, Unilever derived more of its sales from developing countries than from western Europe. The shift of resources appeared to make much sense, given that in 2006 Unilever’s developing-world sales grew 8 percent over the previous year, whereas sales in western Europe inched ahead only 1 percent and U.S. sales grew 2.4 percent. It nevertheless remained to be seen whether Cescau’s initiatives were sufficient to achieve the company’s stated goal of annual increases of overall revenues of between 3 and 5 percent.

Maura Troester
Updated, David E. Salamie

PRINCIPAL SUBSIDIARIES

Unilever de Argentina S.A.; Unilever Australia Ltd.; Unilever Belgium BVBA/SPRL (Unibel); Unilever Brasil Ltda. (Brazil); Unilever Canada Inc.; Unilever Chile Home and Personal Care Ltda.; Unilever (China) Investing Company Ltd.; Unilever Services (Hefei) Limited (China); Amora Maille Société Industrielle S.A.S.; Cogesal-Miko S.A.S. (France); Lever Fabergé France S.A.S. (France; 99%); Unilever France Holdings S.A.S.; Maizena Grundstücksverwaltungs GmbH & Co. OHG (Germany); Pfanni GmbH & Co. OHG Stavenhagen (Germany); Pfanni Werke Grundstücksverwaltungs GmbH & Co. OHG (Germany); UBG Vermietungs GmbH & Co. OHG (Germany); Unilever Deutschland GmbH (Germany); Unilever Deutschland Holding GmbH (Germany); Unilever Deutschland Immobilien Leasing GmbH & Co. OHG (Germany); Wizona IPR GmbH & Co. OHG (Germany); Elais-Unilever S.A. (Greece; 84%); Unilever Hellas A.E.B.E. (Greece); Hindustan Lever Ltd. (India; 51%); P.T. Unilever Indonesia Tbk (85%); Unilever Italia SrL (Italy); Unilever Japan KK; Unilever de México S. de R.L. de C.V.; Mixhold B.V. (Netherlands); Unilever Finance International B.V. (Netherlands); Unilever N.V. (Netherlands); Unilever Nederland B.V. (Netherlands); UNUS Holding B.V. (Netherlands); Unilever Polska S.A. (Poland); Unilever SNG (Russia); Unilever South Africa Foods (Pty) Limited (59%); Unilever South Africa Home and Personal Care (Pty) Ltd.; Unilever España S.A. (Spain); Unilever Foods España S.A. (Spain); Unilever Sverige AB (Sweden); Unilever Supply Chain Company AG (Switzerland); Unilever Schweiz GmbH (Switzerland); Unilever Thai Trading Ltd. (Thailand); Unilever Sanayi ve Ticaret Türk A.S (Turkey); Lever Fabergé Ltd. (U.K.); Unilever Bestfoods UK Ltd.; Unilever PLC (U.K.); Unilever UK Holdings Ltd.; Unilever UK & CN Holdings Ltd.; Conopco, Inc. (U.S.A.); Unilever Capital Corporation (U.S.A.); Unilever United States, Inc.

PRINCIPAL COMPETITORS

The Procter & Gamble Company; Nestlé S.A.; Kraft Foods, Inc.; Reckitt Benckiser plc; Colgate-Palmolive Company; Beiersdorf AG.

Unilever

views updated Jun 27 2018

Unilever

Unilever PLC
P.O. Box 68
Unilever House
Blackfriars
London EC4P 4BQ
United Kingdom
Telephone: (0171) 822-5252
Fax: (0171) 822-5951
Web site: http://www.unilever.com
Unilever N.V.
Weena 455
P.O. Box 760
3000 DK Rotterdam
The Netherlands
Telephone: (10) 217-4000
Fax: (10) 217-4798

Public Company
Incorporated: 1929 as Unilever Limited and Unilever N.V.
Employees: 265,000
Sales: £27.09 billion (US$44.90 billion) (1998)
Stock Exchanges: Amsterdam London New York Paris Frankfurt Brussels Zurich Luxembourg Vienna
Ticker Symbol: UN
NAIC: 311223 Other Oilseed Processing; 311225 Fats & Oils Refining & Blending; 311411 Frozen Fruit, Juice, & Vegetable Processing; 311412 Frozen Specialty Food Manufacturing; 311421 Fruit & Vegetable Canning; 311520 Ice Cream & Frozen Dessert Manufacturing; 311712 Fresh & Frozen Seafood Processing; 311920 Coffee & Tea Manufacturing; 311941 Mayonnaise, Dressing, & Other Prepared Sauce Manufacturing; 311942 Spice & Extract Manufacturing; 312111 Soft Drink Manufacturing; 325611 Soap & Other Detergent Manufacturing; 325620 Toilet Preparation Manufacturing

If the adage “two heads are better than one” applies to business, then certainly Unilever is a prime example. The food and consumer products giant actually has two parent companies: Unilever PLC, based in the United Kingdom, and Unilever N.V., based in The Netherlands. The two companies, which operate virtually as a single corporation, are run by a single group of directors and are linked by a number of agreements. Unilever considers itself the second largest consumer goods firm in the world, trailing only Philip Morris Companies Inc., and produces numerous brand name foods, cleaning products, and personal care items. About 52 percent of revenues are generated in the foods sector; brands include Imperial and Promise margarines, Lipton tea, Ragú foods, Lawry’s seasonings, Breyers ice cream, and Birds Eye and Gorton’s frozen foods. One-quarter of sales come from the personal care area; brands include Caress and Dove soap, Pears and Pond’s skin care products, Degree, Fabergé, and Sure deodorants, Suave and Salon Selectives hair care items, Close-Up, Mentadent, and Pepsodent oral care products, and Calvin Klein, Elizabeth Arden, and Elizabeth Taylor prestige fragrances—as well as such miscellaneous brands as Q-Tips and Vaseline. Unilever’s third major sector is that of cleaning products, which is responsible for about 22 percent of turnover; brands include Wisk and All laundry detergents, Snuggle and Final Touch fabric softeners, and Sunlight dish detergents, and this area also includes the company’s line of institutional cleaning products. Unilever maintains production facilities in 88 countries and sells its products in an additional 70. About 47 percent of revenues originate in Europe, 21 percent in North America, 14 percent in the Asia-Pacific region, 12 percent in Latin America, and six percent in Africa and the Middle East.

Soap and Margarine Origins

William Hesketh Lever, later Lord Leverhulme, was born in Bolton, England, in 1851. The founder of Lever Brothers, Lever had a personality that combined “the rationality of the business man with the restless ambitions of the explorer,” according to Unilever historian Charles Wilson.

During the depression of the 1880s, Lever, then a salesman for his father’s wholesale grocery business, recognized the advantages of not only selling, but also manufacturing, soap, a noncyclical necessity item. His father, James Lever, initially was opposed to the idea, believing that they should remain grocers, not manufacturers. He softened, however, in the face of his son’s determination. In 1885 William established a soap factory in Warrington as a branch of the family grocery business. Within a short time Lever was selling his soap throughout the United Kingdom, as well as in continental Europe, North America, Australia, and South Africa.

William also began a tradition that lasted well into the 20th century—that of producing all its raw components. Lever Brothers, a vertically integrated company, grew to include milling operations used to crush seeds into vegetable oil for margarine as well as packaging and transporting businesses for all of its products, which then included Lux, Lifebuoy, Rinso, and Sunlight soaps.

In 1914, as the German Navy began to threaten the delivery of food imports—particularly Danish butter and Dutch margarine—to Britain, the British government asked William Lever to produce margarine. He eagerly accepted the opportunity, believing that the margarine business would be compatible with the soap business because the products both required oils and fats as raw materials. Lever Brothers’ successful diversification, however, now put the company in competition with Jurgens and Van den Bergh, two leading Dutch margarine companies.

1920s: The Birth of Unilever

Jurgens and Van den Bergh both began commercial production of margarine in 1872. Fierce competitors for the remainder of the century, Van den Bergh and Jurgens decided in 1908 to pool their interests in an effort to make the best of the poor economic situation that existed in most of the world. Competition in the margarine industry had intensified, fueled by an increasing number of smaller firms, which were exporting their products and lowering their prices to get a piece of the market. Van den Bergh eliminated the potential for problems such as double taxation—which arose from its interests in both Holland and the United Kingdom—by creating and incorporating two parent companies for itself, one in Holland and one in England. In 1920 Jurgens and Van de Bergh decided there was strength in numbers and joined with another margarine manufacturer, Schicht, in Bohemia. In 1927 the three companies, borrowing the ideal of a dual structure from Van de Bergh, formed Margarine Union Limited, a group of Dutch firms with interests in England, and Margarine Unie N.V., located in Holland.

Through the middle and late 1920s, the oil and fat trades continued to grow. Although the activities of Margarine Unie and Margarine Union were focused on edible fats (margarine), the companies had held soap interests throughout Europe for years. Similarly, although Lever Brothers had produced margarine since World War I, its focus was soap. After two years of discussion, the companies decided that an “alliance wasted less of everybody’s substance than hostility” and merged on September 2, 1929.

As it does today, the newly formed Unilever consisted of two holding companies: Unilever Limited, previously Margarine Union; and Unilever N.V., formerly Margarine Unie. The new organization included an equalization agreement to assure equal profits for shareholders of both companies, as well as identically structured boards. Unilever’s parent companies were actually holding companies supervising the operations of hundreds of manufacturing and trading firms worldwide. The end result of the merger was a company that bought and processed more than a third of the world’s commercial oils and fats and traded more products in more places than any other company in the world. Its manufacturing activities—which included detergents and toilet preparations, margarine and edible fats, food products, and oil milling and auxiliary businesses—were joined by a need for similar raw and refined materials, such as coconut, palm, cottonseed, and soybean oil, as well as whale oil and animal fats.

1930s: Surviving the Great Depression

The Great Depression, which struck not long after the new company was formed, affected every aspect of Unilever’s mul-tifaceted operation: its raw material companies faced price decreases of 30 to 40 percent in the first year alone; cattle cake, sold as a product of its oil mills, suffered with the decline of the agricultural industry; margarine and other edible fats were affected by damaging competition as the price of butter plummeted; and the company’s retail grocery and fish shops saw declining sales.

As prices and profits around the world threatened to collapse, Unilever had to act quickly to build up an efficient system of control. The “special committee” was established in September of 1930 to do that. Operating as a board of directors over the two boards the company already had, the special committee was designed to balance Dutch and British interests and act as an inner cabinet for the organization. It also began administering two committees established to deal with Unilever’s world affairs: a continental committee to handle businesses in Europe, and an overseas committee to supervise business elsewhere.

Company Perspectives:

Our purpose in Unilever is to meet the everyday needs of people—everywhere—to anticipate the aspirations of our consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life.

Our deep roots in local cultures and markets around the world are our unparalleled inheritance and the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers—a truly multi-local multinational

Our long term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively and to a willingness to embrace new ideas and learn continuously.

We believe that to succeed requires the highest standards of corporate behaviour towards our employees, consumers and the societies and world in which we live.

This is Unilever’s road to sustainable, profitable growth for our business and long-term value creation for our shareholders and employees.

A new generation of management led Unilever through the 1930s: Francis D’Arcy Cooper, who had been chairman of Lever Brothers since William Lever’s death in 1925; Georg Schicht, the former chairman of Schicht Company; and Paul Rijkens, who succeeded Anton Jurgens as chairman of Jurgens in 1933. It was Cooper who seemed to lead the efforts to turn the various companies that comprised Unilever into one Anglo-Dutch team. It was also Cooper who convinced the board of the necessity for a reorganization in 1937, when the relationship between the profit-earning capacities of the Dutch and British companies found itself reversed.

Originally, about two-thirds of Unilever’s profits were earned by the Dutch group and one-third by the British group. By 1937, however, because of increasing trade conflicts in Europe, particularly in Germany, the situation had reversed. By selling the Lever company’s assets outside Great Britain, including Lever Brothers Company in the United States, to the Dutch arm of Unilever, the assets of the two groups were redistributed so that they would be nearly equal in volume and profits, which had always been the objective of the two parent companies.

Before 1945 the oils and fats industries had progressed fairly smoothly. The only major industry breakthroughs were the discovery of the hydrogenation process just before World War I, which enabled manufacturers to turn oils into hard fats, and the possibility of adding vitamins to margarine in the 1920s, which created an opportunity for new health-related product claims. But it was not until the end of World War II that the industry in general, including Unilever, began to recognize the important relationship between marketing and research. Meantime, Unilever expanded its U.S. operations through two important acquisitions: Thomas J. Lipton Company, manufacturer of tea (1937), and the Pepsodent brand of toothpaste (1944).

Postwar Era: Adapting to New Markets and Technology

Although Unilever’s growth until the mid-1940s was a result of expanded product lines and plant capacities, its greatest achievements between 1945 and 1965 were its adaptation to new markets and technology. The decade following World War II was a period of recovery, culminating by the early 1950s in rapid economic growth in much of the Western world. Until 1955 demand continued to rise and competition was not a major issue. Afterward, however, profit margins dropped, competition in Europe and North America sharpened, and success was less assured. Unilever’s strategy was to acquire companies in new areas, particularly food and chemical manufacturers. Among the postwar acquisitions were U.K. frozen foods maker Birds Eye (1957) and U.S. ice cream novelty maker Good Humor (1961).

Before the formation of Unilever, Lever Brothers had coped with overseas expansion by purchasing two factories in the United States, one in Boston and one in Philadelphia. Following World War II, Unilever found that it lacked the scientific resources needed to compete with U.S. companies in research and development. Previously, key concerns for the soap industry revolved around color, scent, lather, and how well the products adapted to changing fabrics. Following the war—to the dismay of Unilever and its U.S. subsidiary, Lever Brothers Company—development efforts in the United States succeeded in creating a nonsoap, synthetic detergent powder (Procter & Gamble Company’s Tide), which had superior cleaning powers and did not form insoluble deposits in plumbing systems in hard water. The disappointment spurred Unilever to value research as highly as marketing and sales. Lever Brothers had three detergent plants in production by 1950 but remained behind in the industry for some time.

Key Dates:

1872:: Two Dutch firms, Jurgens and Van den Bergh, begin commercial production of margarine.
1885:: William Hesketh Lever establishes soap factory in Warrington, marking the beginnings of Lever Brothers.
1908:: Jurgens and Van den Bergh pool their interests.
1914:: Lever begins producing margarine at the request of the British government.
1927:: Jurgens and Van den Bergh create dual-structured Margarine Union Limited and Margarine Unie N. V.
1929:: Margarine Union/Margarine Unie merges with Lever Brothers to create Unilever, with dual Anglo-Dutch structure.
1930:: Special committee is established as a board of directors over the British and Dutch Unilever holding companies.
1937:: Reorganization equalizes the assets of the Dutch and the British groups of Unilever; Thomas J. Lip-ton Company, U.S. manufacturer of tea, is acquired.
1944:: The U.S. toothpaste brand Pepsodent is acquired.
1957:: Company acquires U.K. frozen foods maker Birds Eye.
1961:: U.S. ice cream novelty maker Good Humor is acquired.
1984:: Buying spree begins that will last until 1988 and result in about 80 companies being acquired; Brooke Bond, the leading European tea company, is acquired through hostile takeover.
1986:: Company acquires Chesebrough-Pond’s, its largest purchase to date.
1989:: The acquisition of three companies, including Fabergé Inc., makes the company a major player in the world perfume and cosmetics industry.
1994:: The launch of a new laundry detergent in Europe turns into a public relations disaster when tests reveal that it can damage clothes under certain conditions.
1996:: Fundamental management reorganization is launched, including the replacing of the special committee with a seven-member executive committee.
1997:: Specialty chemicals operations are sold to Imperial Chemical Industries PLC for about US$8 billion.
1999:: Company announces that it will eliminate about 1,200 of its brands to focus on around 400 regionally or globally powerful brands.

Because the primary ingredients of the new detergents were petrochemicals, Unilever now found itself involved in chemical technology. In the synthetic detergent market, each geographic area required a different kind of product depending on the way consumers washed their clothes and the type of water available to them. The new detergents gave rise to new problems, however: the foam that detergents left in sewage systems and rivers had become a major issue by the late 1950s. As a result, by 1965 Unilever had introduced biodegradable products in the United States, the United Kingdom, and West Germany.

Throughout the postwar era, Unilever continued to invest in research and research facilities. One of its major establishments—the Port Sunlight facility in Cheshire that William Lever had founded in the 1920s—researched detergents, chemicals, and timber. In Bedfordshire, the Colworth House facility continued research efforts in food preservation, animal nutrition, and health problems associated with toothpaste, shampoo, and other personal products. By 1965 the company had 11 major research establishments throughout the world, including laboratories in Continental Europe, the United Kingdom, the United States, and India.

One example of how Unilever effectively answered market demands was its continuing research in margarine. When first developed, margarine was simply a substitute for the butter that was in short supply during wartime. But when butter once again became plentiful, the product needed to offer other advantages to the consumer. Research focused on methods to improve the quality of margarine—such as making it easier to spread, more flavorful, and more nutritious. This was the primary emphasis at Unilever’s Vlaardingen laboratory. By enhancing techniques used to refine soybean oil, the company succeeded in improving the raw materials available for margarine production while at the same time achieving vast savings, since soybean oil itself was inexpensive.

The advent of the European Economic Community, or Common Market, also created new opportunities for Unilever. The company held several conferences throughout the 1960s to discuss strategies for dealing with marketing, factory location, tariffs, cartels, and transport issues created by the Common Market. Of particular importance was the need to determine the best places for production under changing economic conditions. Since the late 19th century, when the companies that comprised Unilever had set up factories in other European countries to avoid tariff restrictions, Unilever’s products had been manufactured wherever it was most economical. Under the Common Market, many of the tariff restrictions that had spawned the multinational facilities were eliminated, giving the company an opportunity to consolidate operations and concentrate production in lower-cost countries.

1980s: Restructuring and Major Acquisitions

In the 1980s Unilever undertook a massive restructuring. The company sold most of its service and ancillary businesses, such as transport, packaging, advertising, and other services that were readily available on the market, and went on a buying spree, snapping up some 80 companies between 1984 and 1988. The restructuring was designed to concentrate the company in “those businesses that we properly understand, in which we have critical mass, and where we believe we have a strong, competitive future,” Unilever PLC Chairman M.R. Angus told Management Today in 1988. Specifically, Unilever’s core businesses were detergents, foods, toiletries, and specialty chemicals.

In addition to increasing profitability in core areas, restructuring also helped Unilever execute its biggest acquisition to date, that of Chesebrough-Pond’s in the United States in 1986. A company with sales of nearly $3 billion, Chesebrough owned such brands as Vaseline Intensive Care, Pond’s Cold Cream, and Ragú spaghetti sauce. The acquisition allowed Unilever to fill out its international personal products business, particularly in the United States, where Unilever saw a higher profit potential.

During the 1980s Unilever’s detergent products posted a 50 percent growth in operating profit, while food products grew at a faster than normal rate. In the United States, plans to take on longtime rival Procter & Gamble were successful in 1984, when Unilever’s Wisk moved P&G’s Cheer out of the number two spot in the laundry detergent market. In Europe, Unilever in 1984 completed its first hostile takeover attempt in 15 years, acquiring the British company Brooke Bond, the leading European tea company, for £376 million. Brooke Bond complemented Unilever’s Lipton brand, the leader in the United States. Two years later, the company launched Wisk in the United Kingdom, as well as Breeze, its first soap powder introduced in the United Kingdom since the debut of Surf more than 30 years before.

In 1989 Unilever became a major player in the world’s perfume and cosmetic industry through three more acquisitions. It obtained Shering-Plough’s perfume business in Europe; the Calvin Klein business from Minnetonka, Inc.; and, by far the largest purchase of the three, Fabergé Inc., the American producer of Chloe, Lagerfeld, and Fendi perfumes, for $1.55 billion. The upper-end cosmetics market was a high-margin business, and Unilever planned to step up marketing of its new products to raise sales.

Positioning for the 21st Century

As it entered the 1990s, Unilever had virtually completed reorganizing its European business to better compete within the evolving single market in that region. In 1991 the company further refined its operations by selling the last of its packaging businesses and by making provisions for the eventual sales of the majority of its agribusinesses.

Unilever’s flexible management structure and diverse product range were integral to its survival in the rapidly changing international market. In a 1992 Harvard Business Review article, Chairman and CEO Floris A. Maljers explained Unilever’s management structure: “The very nature of our products required proximity to local markets; economies of scale in certain functions justify a number of head-office departments; and the need to benefit from everybody’s creativity and experience makes a sophisticated means of transferring information across our organization highly desirable. All of these factors led to our present structure: a matrix of individual managers around the world who nonetheless share a common vision and understanding of corporate strategy.”

Despite poor performances by some of its subsidiaries and recessions in Europe and North America, Unilever’s broad product range led to overall profit increases in both 1990 and 1991. In 1990 Unilever made substantial inroads into the newly opened markets created by the unification of Germany. The company began producing its Rama margarine at a former East German state plant in Chermnitz, established a task force to select sites for 23 Nordsee fish stores, and began distributing ice cream and frozen novelties to retailers in eastern Germany.

In 1991 Unilever continued to battle with rival Procter & Gamble over the newly opened markets of the former Soviet Union. Unilever purchased an 80 percent stake in the Polish detergent firm Pollena Bydgoscz for $20 million, changing the name to Lever Polska, the first laundry detergent manufacturer to be privatized in Poland. The company earmarked approximately $24 million for product line expansions, including a fabric conditioner and household cleaning products. Also in 1991 Michael Perry was named the U.K. cochairman of Unilever.

Profits in Unilever’s personal products division were down 11 percent in 1991, due to sluggish markets in the United States and only moderate growth in European markets. Unilever’s newly purchased Elizabeth Arden and Calvin Klein, however, posted strong growth, supported by strong retailer relationships and $24 million in advertising expenditures. Such growth occurred despite an overall drop in department store cosmetic sales of nine percent from 1987 to 1992. In 1992, though, Elizabeth Arden profits began slipping, prompting the resignation of Joseph F. Ronchetti, Arden’s CEO since 1978. Unilever underwent further restructuring of its personal products division, creating a prestigious subdivision geared toward introducing Calvin Klein and Elizabeth Arden into overseas markets.

Unilever’s fastest growing market in the early 1990s was in Asia. Although Unilever had been operating in Asia since its earliest days, the company was just beginning to tap into the region’s newly acquired wealth. Asian sales of personal products, detergent, and packaged foods were growing more than twice as fast as sales in the United States and Europe. By 1992 Unilever was composed of some 500 companies conducting business in 75 different countries.

Unilever continued to make acquisitions in the mid-1990s, completing more than 100 purchases between 1992 and 1996, more than half of which were in foods. In 1993 Unilever gained the number one position in the U.S. ice cream market through the completion of two acquisitions. The company paid $155 million to Empire of Carolina Inc. for the Klondike and Popsicle brands, and about $215 million for the ice cream business of Philip Morris’s Kraft General Foods unit, which included the Sealtest and Breyers brands. The acquired brands were merged with the Good Humor line within Good Humor Breyers Ice Cream Company, a subsidiary based in Green Bay, Wisconsin. Also in 1993 Unilever launched a restructuring, taking a US$750 million charge against earnings to close or consolidate 60 plants and lay off 7,500 employees.

One the largest acquisitions of this period was the 1996 takeover of Chicago-based Helene Curtis Industries Inc., manufacturer and marketer of personal care products, primarily shampoo and conditioners, hand and body lotions, and deodorants and antiperspirants. Purchased for about $770 million, Helene Curtis’s portfolio included such brands as Suave, Finesse, and Salon Selectives. Another significant 1996 acquisition was that of Northbrook, Illinois-based Diversey Corporation, a maker of institutional chemical cleansers and sanitizers, and Unilever’s first foray into the industrial cleaning sector.

Unilever and Procter & Gamble (P&G) began battling again in 1994, this time for supremacy in the European detergent sector. Unilever aggressively went after P&G’s market-leading brand, Ariel, with a new soap marketed under the names Persil Power, Omo Power, and Skip Power. Unilever spent $175 million developing the product and another $292 million marketing it during 1994. The product included a manganese complex molecule that Unilever claimed cleaned clothes better at lower temperatures than rival products. P&G conducted tests on Persil Power, however, which indicated that the detergent resulted in abnormal wear after as few as 15 washings. When P&G publicized its findings, Unilever sued the company for slander. But the suit was quickly withdrawn after Unilever admitted that the detergent did indeed contain a flaw—a flaw that had not been uncovered in the prelaunch testing—and could damage clothes when exposed to a particular combination of dyes. Unilever reformulated the product, but not before it had turned into a public relations nightmare. In the end, the Power formula was abandoned entirely and Unilever, therefore, took a £57 million write-off in its 1994 accounts.

According to Andrew Lorenz, writing in the July 1996 issue of Management Today, the Persil Power debacle served as a catalyst for a fundamental management reorganization. On September 1, 1996, the three-person special committee that had run Unilever since its formation in 1929 was replaced by a seven-member executive committee composed of the chairmen of Unilever N.V. and Unilever PLC and five high-ranking Unilever executives. At the same time the company did away with a complex two-tiered management structure that included both worldwide product management groups and regional management groups. In their place was created a single team of 14 business presidents, with each president responsible for a portion of the European operations (e.g., the food and beverage Europe group), a portion of the North American operations (e.g., the home and personal care North America group), or a region of the rest of the world (Africa, Latin America, etc.). As was typical of the time, this streamlining was aimed at improving decision-making by pushing authority down to a lower level. Along with this major reorganization came a change in the chairmanships, with Niall FitzGerald replacing Michael Perry as U.K. cochairman; an Irishman, FitzGerald became the first non-English, non-Dutch to serve as cochairman, and he also reached the post despite having been in charge of Unilever’s detergent operations during the Persil Power debacle. Continuing on the Dutch side was Morris Tabaksblat, who had replaced Maljers as Dutch cochairman in 1994.

In the late 1990s FitzGerald and Tabaksblat oversaw a comprehensive review of Unilever’s wide-ranging businesses in an effort to focus on the strongest core areas: ice cream, margarines, tea-based beverages, detergents, personal soaps, skin care products, and prestige fragrances. Several other areas were identified as “developing” core areas: frozen foods, culinary products (sauces and side dishes), hair care products, oral care products, deodorants, household care products, and industrial cleaning products. Businesses outside of these areas were candidates for disposal. In 1996 the company sold its mass-market cosmetics business, its few remaining animal feed operations, some oil-processing units, and a U.K. franchiser of Caterpillar Inc. heavy equipment. Unilever completed its largest disposal the following year, selling its specialty chemicals business to Imperial Chemical Industries PLC for about US$8 billion. The sale resulted in a net profit of US$4.55 billion, part of which cleared Unilever’s US$2.78 billion in debt; the proceeds also contributed to a war chest that expanded to US$9.6 billion. The company made one large purchase in 1997, the US$930 million acquisition of Kibon S.A. Industrias Alimenticia, the number one ice cream maker in Brazil. In 1998 Unilever sold its Plant Breeding International Cambridge Limited unit to Monsanto for about US$525 million. Unilever also sold off its Nordsee fast-food fish chain in the late 1990s.

In early 1999 Unilever spent a large portion of its war chest on a special dividend to shareholders of £5 billion (US$8.1 billion). In July of that year Tabaksblat retired and was replaced as Dutch cochairman by Antony Burgmans. Two months later Unilever announced that it would eliminate about 1,200 of its brands to focus on around 400 regionally or globally powerful brands—a group that accounted for almost 90 percent of 1998 revenue. This sweeping overhaul of the product portfolio was aimed at increasing annual growth rates from four percent to six to eight percent and at eventually reaping annual savings of £1 billion.

Unilever ended the 20th century with a strategic plan that included a focus on top brands within core market sectors and an emphasis on growth within developing countries. Although it was facing considerable competitive pressures in various markets around the world—particularly from Procter & Gamble—Unilever was clearly no longer the risk-averse, staid organization of the past. The whirlwind events of the late 1990s seemed destined to position the company as one of the most formidable global consumer products companies of the 21st century.

Principal Subsidiaries

Eskimo-Iglo Ges.m.b.H (Austria); sterreichische Unilever Ges.m.b.H (Austria); Austria Frost Nahrungsmittel Ges m.b.H; Unilever Belgium N.V.; Unilever _R s. ro. (Czech Republic); Unilever Danmark A/S (Denmark); Suomen Unilever Oy (Finland); Astra-Calve S.A. (France; 99%); Boursin S.A. (France; 99%); Choky S.A. (France; 99%); Cogesal S.A. (France; 99%); Elida Fabergé S.A. (France; 99%); Fralib S.A. (France; 99%); Frigedoc S.A. (France; 99%); Lever S.A. (France; 99%); Reíais d’or-Miko S.A. (France; 99%); Unilever France S.A. (99%); Deutsche Unilever GmbH (Germany); DiverseyLever GmbH (Germany); Fritz Homann Lebensmittelwerke GmbH (Germany); Frozen Fish International GmbH (Germany); HPC Deutschland GmbH (Germany); Langnese-Iglo GmbH (Germany); Meistermarken-Werke GmbH (Germany); Spezialfabrik fur Back—und Grosskuchenbedarf (Germany); Union Deutsche Lebensmittelwerke GmbH (Germany); ‘Elais’ Oleaginous Products A.E. (Greece; 51%); Unilever Hellas A.E.B.E. (Greece); Unilever Magyarország Beruházási Kft (Hungary); Lever Fabergé Ireland Ltd.; Lyons Tea Ireland Ltd.; Van den Bergh Foods Ltd. (Ireland); W & C McDonnell Ltd. (Ireland); Unilever Italia SpA (Italy); Sagit SpA (Italy); DiverseyLever B.V. (Netherlands); Iglo-Ola B.V. (Netherlands); Lever Fabergé—Europe Sourcing Unit Bodegraven BV (Netherlands); Lever Fabergé Nederland BV (Netherlands); Loders Croklaan B.V. (Netherlands); Mora B.V. (Netherlands); Unilever Nederland B.V. (Netherlands); UniMills B.V. (Netherlands); Van den Bergh Nederland B.V. (Netherlands); Unilever Polska S.A. (Poland; 99%); IgloOlá—Distribui(Entity)ao de Gelados e de Ultracongelado, Lda. (Portugal; 74%); Le-verElida-DistribuiEntityao de Produtos de Limpenza E Higiene Pessoal, Lda. (Portugal; 60%); Unilever Romania (99%); Unilever SNG (Russia); Unilever Slovensko spol.sr.o. (Slovakia); Agra S.A. (Spain); Frigo S.A. (Spain; 99%); Frudesa S.A. (Spain); Unilever España S.A. (Spain); Diversey Lever AB (Sweden); GB Glace AB (Sweden); Lever Fabergé AB (Sweden); Unilever Sverige AB (Sweden); Van den Bergh Foods AB (Sweden); Diversey Lever A.G. (Switzerland); Lever Fabergé A.G. (Switzerland); Lever Fabergé A.G. (Switzerland); Lipton-Sais (Switzerland); Pierrot-Lusso A.G. (Switzerland); Meina Holding A.G. (Switzerland); Sunlight A.G. (Switzerland); Unilever Cosmetics International S.A. (Switzerland); Unilever (Schweiz) A.G. (Switzerland); Birds Eye Wall’s Ltd. (U.K.); Calvin Klein Cosmetics (UK) Ltd.; DiverseyLever Ltd. (U.K.); Elida Fabergé Ltd. (U.K.); Elizabeth Arden Ltd. (U.K.); Lever Brothers Ltd. (U.K.); Lipton Ltd. (U.K.); Unilever UK Central Resources Ltd.; Unilever UK Holdings Ltd.; Unipath Ltd. (U.K.); Van den Bergh Foods Ltd. (U.K.); UL Canada Inc; Unilever Canada Limited; Calvin Klein Cosmetics Company (U.S.A.); DiverseyLever Inc. (U.S.A.); Elizabeth Arden Co. (U.S.A.); Good Humor Breyers Ice Cream Company (U.S.A.); Gorton’s (U.S.A.); Lipton (U.S.A.); Unilever Capital Corporation (U.S.A.); Unilever Home & Personal Care USA; Unilever United States, Inc; Blohorn S.A. (Cote d’lvoire; 90%); Compagnie des Margarines, Savons et Cosmétiques au Zaire s.a.r.l. (Democratic Republic of Congo); Plantations et Huiler-ies du Congo (Democratic Republic of Congo; 76%); Unilever Gulf Free Zone Establishment (Dubai); Fine Foods Egypt SAE (60%); Lever Egypt SAE; Unilever Ghana Ltd. (67%); Glidat Strauss Ltd. (Israel; 50%); Lever Israel Ltd.; Brooke Bond Kenya Ltd. (88%); East Africa Industries Ltd. (Kenya; 61%); Lever Brothers (Malawi) Ltd.; Lever Maroc S.A. (Morocco); Lever Brothers Nigeria PLC (50%); Binzagr Lever Ltd. (Saudi Arabia; 49%); Binzagr Lipton Ltd. (Saudi Arabia; 49%); Binzagr Wall’s Ltd. (Saudi Arabia; 49%); Lever Arabia Ltd. (Saudi Arabia; 49%); Unilever South Africa (Pty.) Ltd.; Brooke Bond Tanzania Ltd.; Lever Elida Temizlik ve Kisisel Bakim ürünleri Sanayi Ve Ticaret A.S. (Turkey; 82%); Unikom Sanayi ve Ticaret A.S. (Turkey); Unilever Sanayi ve Ticaret Turk A.S. (Turkey); Unilever Tüketim ürünleri Satis Pazarlama ve Ticaret A.S. (Turkey); Unilever Uganda Ltd.; Lever Brothers Zambia Limited; Lever Brothers (Private) Ltd. (Zimbabwe); Unilever Australia Ltd.; Lever Brothers Bangladesh Ltd. (61%); Guangdong Lipton Foods Company Ltd. (China; 60%); Hefei Lever Detergent Co. Ltd. (China; 70%); Shanghai Elida Co. Ltd. (China; 90%); Shanghai Lever Company Ltd. (China; 54%); Shanghai Pond’s Co. Ltd. (China; 50%); Shanghai Van den Bergh Foods Ltd. (China; 50%); Unilever (China) Ltd.; Unilever (Shanghai) Company Ltd. (China); Unilever (Shanghai) Toothpaste Company Ltd. (China; 60%); Wall’s (China) Company Ltd. (97%); ZhangJiaKou Unilever Detergent Co., Ltd. (China; 70%); Unilever Hong Kong Ltd. (China S.A.R.); Hindustan Lever Ltd. (India); P.T. Unilever Indonesia; Nippon Lever B.V. (Japan); Lever Brothers Ltd. (Japan); Unilever (Malaysia) Holdings Sdn. Bhd, (70%); Pamol Plantations Sdn. Bhd. (Malaysia); Unilever New Zealand Ltd.; Lever Brothers Pakistan Ltd. (69%); Unilever Philippines Inc; Unilever Singapore Private Ltd.; Unilever Korea (South Korea); Unilever Ceylon Ltd. (Sri Lanka); Unilever Taiwan Ltd.; Unilever Thai Holdings Ltd. (Thailand); Lever VISO (Vietnam; 66%); Lever HASO (Vietnam; 66%); Unilever de Argentina S.A.; Quimbol Lever S.A. (Bolivia); Industrias Gessy Lever Ltda. (Brazil); Kibon S.A. Industrias Alimenticia (Brazil; 99%); Lever Chile S.A.; Unilever Andina (Colombia) SA; Industrias Unisola S.A. (El Salvador; 60%); Anderson Clayton & Co S.A. (Mexico); Pond’s de Mexico S.A. de C.V.; Unilever Becumij N.V. (Netherlands Antilles); Unilever Capsa del Paraguay S.A.; Industrias Pacocha S.A. (Peru; 72%); Lever Brothers West Indies Ltd. (Trinidad & Tobago; 50%); Sudy Lever S.A. (Uruguay); Unilever Andina S.A. (Venezuela).

Principal Operating Units

Africa; Central Asia & Middle East; China; East Asia Pacific; Latin America; DiverseyLever; Food & Beverages—Europe; Ice Cream & Frozen Foods—Europe; Home & Personal Care—Europe; Central & Eastern Europe; Foods—North America; Home & Personal Care—North America.

Principal Competitors

Alberto-Culver Company; Amway Corporation; Avon Products, Inc.; Beiersdorf AG; Ben & Jerry’s Homemade, Inc.; Bestfoods; Campbell Soup Company; The Clorox Company; The Coca-Cola Company; Colgate-Palmolive Company; ConAgra, Inc.; Dairy Farmers of America; Groupe Danone; Del Monte Foods Company; The Dial Corporation; The Estée Lau-der Companies Inc.; The Gillette Company; Hormel Foods Corporation; Johnson & Johnson; Kraft Foods, Inc.; L’Oréal; LVMH Moet Hennessy Louis Vuitton SA; Mars, Inc.; Nabisco Holdings Corp.; Nestlé S.A.; The Pillsbury Company; The Procter & Gamble Company; Reckitt & Colman pic; Revlon, Inc.; Sara Lee Corporation; S.C. Johnson & Son, Inc.; Shiseido Company, Limited; Unigate PLC.

Unilever Plc (Unilever N.V.)

views updated May 09 2018

Unilever Plc (Unilever N.V.)

P.O. Box 68
Unilever House
Blackfriars
London EC4P 4BQ
United Kingdom
(071) 822-5252
Fax: (071) 822-5898

P.O. Box 760
3000 DK Rotterdam
Netherlands
(10) 464-5911
Fax: (10) 217-4798

Public Company
Incorporated: 1929 as Unilever Ltd. and Unilever NV
Employees: 292,000
Sales: £27.56 billion/Dfl76.43 billion (US$40 billion)
Stock Exchanges: London Amsterdam New York Paris Frankfurt Brussels Zürich Luxembourg Vienna
SICs: 2841 Soap & Other Detergents; 2844 Perfumes, Cosmetics & Other Toilet Preparations; 2079 Shortening, Table Oil, Margarine & Other Edible Fats and Oils

If the adage “two heads are better than one” applies to business, then certainly Unilever is a prime example. The food and consumer products giant actually has two parent companies: Unilever PLC, based in the United Kingdom, and Unilever N.V., based in the Netherlands. The two companies, which operate virtually as a single corporation, are run by identical boards of directors, in which the chairman of each automatically becomes vice-chairman of the other. Brand-name foods, drinks, and personal products such as soap and detergent constitute the majority of Unilever’s business. Unilever brands include Imperial and Promise margarines, Lipton tea, Ragú foods, detergent products such as Wisk, Sunlight, and Dove, as well as personal products like Vaseline, Pond’s, and Elizabeth Taylor’s Passion perfume. Unilever’s other major activity is in specialty chemicals.

William Hesketh Lever, later Lord Leverhulme, was born in Bolton, England, in 1851. The founder of Lever Brothers, Lever had a personality that combined “the rationality of the business man with the restless ambitions of the explorer,” according to Unilever historian Charles Wilson.

During the depression of the 1880s, Lever, then a salesman for his father’s wholesale grocery business, recognized the advantages of not only selling, but also manufacturing, soap, a noncyclical necessity item. His father, James Lever, was initially opposed to the idea, believing that they should remain grocers, not manufacturers. He softened, however, in the face of his son’s determination. In 1885 William established a soap factory in Warrington as a branch of the family grocery business. Within a short time Lever was selling his soap throughout the United Kingdom, as well as in Continental Europe, North America, Australia, and South Africa.

William also began a tradition that to some degree still exists at Unilever—that of producing all its raw components. Lever Brothers, a vertically integrated company, grew to include milling operations used to crush seeds into vegetable oil for margarine as well as packaging and transporting businesses for all of its products, which then included Lux, Lifebuoy, Rinso, and Sunlight soaps.

In 1914, as the German Navy began to threaten the delivery of food imports—particularly Danish butter and Dutch margarine—to Britain, the British government asked William Lever to produce margarine. He eagerly accepted the opportunity, believing that the margarine business would be compatible with the soap business because the products both required oils and fats as raw materials. Lever Brothers’ successful diversification, however, now put the company in competition with Jurgens and Van den Berghs, two leading margarine companies.

Fierce competitors in the latter half of the 19th century, Van den Berghs and Jurgens had decided in 1908 to pool their interests in an effort to make the best of the poor economic situation that existed in most of the world. Competition in the margarine industry had intensified, fueled by an increasing number of smaller firms, which were exporting their products and lowering their prices to get a piece of the market. Van den Berghs eliminated the potential for problems such as double taxation—which arose from its interests in both Holland and the United Kingdom—by creating and incorporating two parent companies for itself, one in Holland and one in England. In 1920 Jurgens and Van de Berghs decided there was strength in numbers and joined with another margarine manufacturer, Schicht, in Bohemia. In 1927 the three companies, borrowing the ideal of a dual structure from Van de Berghs, formed Margarine Union Limited, a group of Dutch firms with interests in England, and Margarine Unie N.V., located in Holland.

Through the middle and late 1920s, the oil and fat trades continued to grow. Although the activities of Margarine Unie and Margarine Union were focused on edible fats (margarine), the companies had held soap interests throughout Europe for years. Similarly, although Lever Brothers had produced margarine since World War I, its focus was soap. After two years of discussion, the companies decided that an “alliance wasted less of everybody’s substance than hostility” and merged on September 2, 1929.

As it does today, the newly formed Unilever consisted of two holding companies: Unilever Limited, previously Margarine Union; and Unilever N.V., formerly Margarine Unie. The new organization included an equalization agreement to assure equal profits for shareholders of both companies, as well as identically structured boards. Unilever’s parent companies were actually holding companies supervising the operations of hundreds of manufacturing and trading firms worldwide. The end result of the merger was a company that bought and processed more than a third of the world’s commercial oils and fats and traded more products in more places than any other company in the world. Its manufacturing activities—which included detergents and toilet preparations, margarine and edible fats, food products, and oil milling and auxiliary businesses—were joined by a need for similar raw and refined materials, such as coconut, palm, cottonseed, and soybean oil, as well as whale oil and animal fats.

The Great Depression, which struck not long after the new company was formed, affected every aspect of Unilever’s multifaceted operation: its raw material companies faced price decreases of 30 to 40 percent in the first year alone; cattle cake, sold as a product of its oil mills, suffered with the decline of the agricultural industry; margarine and other edible fats were affected by damaging competition as the price of butter plummeted; and the company’s retail grocery and fish shops saw declining sales.

As prices and profits around the world threatened to collapse, Unilever had to act quickly to build up an efficient system of control. The “special committee” was established in September of 1930 to do that. Operating as a board of directors over the two boards the company already had, the special committee was designed to balance Dutch and British interests and act as an inner cabinet for the organization. It also began administering two committees established to deal with Unilever’s world affairs: a continental committee to handle businesses in Europe, and an overseas committee to supervise business elsewhere.

A new generation of management led Unilever through the 1930s: Francis D’Arcy Cooper, who had been chairman of Lever Brothers since William Lever’s death in 1925; Georg Schicht, the former chairman of Schicht Company; and Paul Rijkens, who succeeded Anton Jurgens as chairman of Jurgens in 1933. It was Cooper who seemed to lead the efforts to turn the various companies that comprised Unilever into one Anglo-Dutch team. It was also Cooper who convinced the board of the necessity for a reorganization in 1937, when the relationship between the profit-earning capacities of the Dutch and British companies found itself reversed.

Originally, about two-thirds of Unilever’s profits were earned by the Dutch group and one-third by the British group. By 1937, however, due to increasing trade conflicts in Europe, particularly in Germany, the situation had reversed. By selling the Lever company’s assets outside Great Britain, including Lever Brothers Company in the United States, to the Dutch arm of Unilever, the assets of the two groups were redistributed so that they would be nearly equal in volume and profits, which had always been the objective of the two parent companies.

Before 1945 the oils and fats industries had progressed fairly smoothly. The only major industry breakthroughs were the discovery of the hydrogenation process just before World War I, which enabled manufacturers to turn oils into hard fats, and the possibility of adding vitamins to margarine in the 1920s, which created an opportunity for new health-related product claims. But it was not until the end of World War II that the industry in general, including Unilever, began to recognize the important relationship between marketing and research.

While Unilever’s growth until the mid-1940s was a result of expanded product lines and plant capacities, its greatest achievements between 1945 and 1965 were its adaptation to new markets and technology. The decade following World War II was a period of recovery, culminating by the early 1950s in rapid economic growth in much of the Western world. Until 1955 demand continued to rise and competition was not a major issue. Afterward, however, profit margins dropped, competition in Europe and North America sharpened, and success was less assured. Unilever’s strategy was to acquire companies in new areas, particularly food and chemical manufacturers.

Before the formation of Unilever, Lever Brothers had coped with overseas expansion by purchasing two factories in the United States, one in Boston and one in Philadelphia. Following World War II, Unilever found it lacked the scientific resources needed to compete with U.S. companies in research and development. Previously, key concerns for the soap industry revolved around color, scent, lather, and how well the products adapted to changing fabrics. Following the war—to the dismay of Unilever and its U.S. subsidiary, Lever Brothers Company—development efforts in the United States succeeded in creating a nonsoap, synthetic detergent powder, which had superior cleaning powers and did not form insoluble deposits in plumbing systems in hard water. The disappointment spurred Unilever to value research as highly as marketing and sales. Lever Brothers had three detergent plants in production by 1950 but remained behind in the industry for some time.

Because the primary ingredients of the new detergents were petrochemicals, Unilever now found itself involved in chemical technology. In the synthetic detergent market, each geographic area required a different kind of product depending on the way consumers washed their clothes and the type of water available to them. The new detergents gave rise to new problems, however: the foam that detergents left in sewage systems and rivers had become a major issue by the late 1950s. As a result, by 1965, Unilever had introduced biodegradable products in the United States, the United Kingdom, and West Germany.

Throughout the postwar era, Unilever continued to invest in research and research facilities. One of its major establishments—the Port Sunlight facility in Cheshire that William Lever had founded in the 1920s—researched detergents, chemicals, and timber. In Bedfordshire, the Colworth House facility continued research efforts in food preservation, animal nutrition, and health problems associated with toothpaste, shampoo, and other personal products. By 1965 the company had 11 major research establishments throughout the world, including laboratories in Continental Europe, the United Kingdom, the United States, and India.

One example of how Unilever effectively answered market demands was its continuing research in margarine. When first developed, margarine was simply a substitute for the butter that was in short supply during wartime. But when butter once again became plentiful, the product needed to offer other advantages to the consumer. Research focused on methods to improve the quality of margarine—such as making it easier to spread, more flavorful, and more nutritious. This was the primary emphasis at Unilever’s Vlaardingen laboratory. By enhancing techniques used to refine soybean oil, the company succeeded in improving the raw materials available for margarine production while at the same time achieving vast savings, since soybean oil itself was inexpensive.

The advent of the European Economic Community, or Common Market, also created new opportunities for Unilever. The company held several conferences throughout the 1960s to discuss strategies for dealing with marketing, factory location, tariffs, cartels, and transport issues created by the Common Market. Of particular importance was the need to determine the best places for production under changing economic conditions. Since the late nineteenth century, when the companies that comprised Unilever had set up factories in other European countries to avoid tariff restrictions, Unilever’s products had been manufactured wherever it was most economical. Under the Common Market, many of the tariff restrictions that had spawned the multinational facilities were eliminated, giving the company an opportunity to consolidate operations and concentrate production in lower-cost countries.

In the 1980s Unilever undertook a massive restructuring. The company sold most of its service and ancillary businesses, such as transport, packaging, advertising, and other services that were readily available on the market, and went on a buying spree, snapping up some 80 companies between 1984 and 1988. The restructuring was designed to concentrate the company in “those businesses that we properly understand, in which we have critical mass, and where we believe we have a strong, competitive future,” Unilever PLC Chairman M. R. Angus told Management Today in 1988. Specifically, Unilever’s core businesses are detergents, foods, toiletries, and specialty chemicals.

In addition to increasing profitability in core areas, restructuring also helped Unilever execute its biggest acquisition to date: Chesebrough-Pond’s in the United States in 1986. A company with sales of nearly $3 billion, Chesebrough owned such brands as Vaseline Intensive Care, Pond’s Cold Cream, and Ragú spaghetti sauce. The acquisition allowed Unilever to fill out its international personal products business, particularly in the United States, where Unilever saw a higher profit potential.

During the 1980s Unilever’s detergent products posted a 50 percent growth in operating profit, while food products grew at a faster-than-normal rate. In the United States, plans to take on longtime rival Procter & Gamble were successful in 1984, when Unilever’s Wisk moved P&G’s Cheer out of the number two spot in the laundry detergent market. In Europe, Unilever completed its first hostile takeover attempt in 15 years, acquiring the British company Brooke Bond, the leading European tea company, for £376 million. Brooke Bond complemented Unilever’s Lipton brand, the leader in the United States. Two years later, the company launched Wisk in the United Kingdom, as well as Breeze, its first soap powder introduced in the United Kingdom since the debut of Surf more than 30 years before.

In 1989 Unilever became a major player in the world’s perfume and cosmetic industry through three more acquisitions. It obtained Shering-Plough’s perfume business in Europe; the Calvin Klein business from Minnetonka, Inc.; and, by far the largest purchase of the three, Fabergé Inc., the American producer of Chloe, Lagerfeld, and Fendi perfumes, for $1.55 billion. The upper-end cosmetics market is a high margin business, and Unilever planned to step up marketing of its new products to raise sales.

As it entered the 1990s, Unilever had virtually completed reorganizing its European business in order to better compete after the integration of the European Economic Community in 1992. In 1991 the company further refined its operations by selling the last of its packaging businesses and by making provisions for the eventual sales of the majority of its agribusinesses.

Unilever’s flexible management structure and diverse product range were integral to its survival in the rapidly changing international market. In a 1992 Harvard Business Review article, Chairman and Chief Executive Officer Floris A. Maljers explained Unilever’s management structure: “The very nature of our products required proximity to local markets; economies of scale in certain functions justify a number of head-office departments; and the need to benefit from everybody’s creativity and experience makes a sophisticated means of transferring information across our organization highly desirable. All of these factors led to our present structure: a matrix of individual managers around the world who nonetheless share a common vision and understanding of corporate strategy.”

Despite poor performances by some of its subsidiaries and recessions in Europe and North America, Unilever’s broad product range led to overall profit increases in both 1990 and 1991. In 1990 Unilever made substantial inroads into the newly opened markets created by the unification of Germany. The company began producing its Rama margarine at a former East German state plant in Chermnitz, established a task force to select sites for 23 Nordsee fish stores, and began distributing ice cream and frozen novelties to retailers in eastern Germany.

In 1991 Unilever entered a race with rival Proctor & Gamble to break into the newly opened markets of the former Soviet Union. Unilever purchased an 80 percent stake in the Polish detergent firm Pollena Bydgoscz for $20 million, changing the name to Lever Polaska, the first laundry detergent manufacturer to be privatized in Poland. The company earmarked approximately $24 million for product line expansions, including a fabric conditioner and household cleaning products.

Profits in Unilever’s personal products division were down 11 percent in 1991, due to sluggish markets in the United States and only moderate growth in European markets. Unilever’s newly purchased Elizabeth Arden and Calvin Klein, however, posted strong growth, supported by strong retailer relationships and $24 million in advertising expenditures. Such growth occurred despite an overall drop in department store cosmetic sales of nine percent from 1987 to 1992. In 1992, though, Elizabeth Arden profits began slipping, prompting the resignation of Joseph F. Ronchetti, Arden’s chief executive officer since 1978. Unilever underwent further restructuring of its personal products division, creating a prestigious subdivision geared towards introducing Calvin Klein and Elizabeth Arden into overseas markets.

Unilever’s fastest growing market in the early 1990s was in Asia. Although Unilever had been operating in Asia since its earliest days, the company was just beginning to tap into the region’s newly acquired wealth. Asian sales of personal products, detergent, and packaged foods grew more than twice as fast as sales in the United States and Europe and were expected to double by 1997.

By 1992 Unilever was composed of some 500 companies conducting business in 75 different countries. Its flexible international management structure, marketing strategies, and product range garnered the conglomerate a reputation as one of Britain’s most admired companies. “Our marketing continues to focus on the rapid transfer of successful products into new territories,” Unilever’s 1991 Annual Report declared, referring to its strategy as “the key to growing our business globally in the 1990s.” Given its broad market base and diversified product range, Unilever seems well positioned to do just that.

Principal Subsidiaries

Unifrost GmbH; Ósterreichische Unilever GmbH; Nordsee GmbH; Hartog; Iglo-Ola; Lever; Union; Uni-Dan A/S; Paasivaara Oy; Suomen Unilever Oy; Astra-Calve SA; CNF SA; Française de Soins et Parfums SA; 4P Emballages France 5A; Lever SA; Niger France SA; Compagnie des Glaces et Surgeles Alimentaires SA; Française d’Alimentation et de Boissons SA; Unilever Export France SA; Unilever France SA; Deutsche Unilever GmbH; Elida-Gibbs GmbH; 4P Folie Forchheim GmbH; 4P Nicolaus Kempten GmbH; 4P Verpackungen Ronsberg GmbH; 4P Rube Gottingen GmbH; Langnese-Iglo GmbH; Lever GmbH; Meistermarken-Werke GmbH, Spezialfabrik fur Back-und Grosskuchenbedarf; Nordsee Deutsche Hochseefischerei GmbH; Schafft Fleisch-werke GmbH; Unichema Chemie GmbH; Union Deutsche Lebensmittelwerke GmbH; Lever Hellas AEBE; Elais Oleaginous Products AE; Lever Brothers (Ireland) Ltd.; W&C McDonnell Ltd.; Paul and Vincent Ltd.; HB Ice Cream Ltd.; 3C Industriale SpA; Lever Sodel SpA; Sagit SpA; Unil-It SpA; Calvé Nederland BV; Crosfield Chemie BV; Elida Gibbs BV; Zeepfabriek de Fenix BV; Inglo-Ola BV; Lever Industrial BV; Lever BV; Loders Croklaan BV; Lucas Aardenburg BV; Naarden International; National Starch & Chemical BV; Nederlandse Unilever Bedrijven BV; Quest International Nederland BV; Exportslachterij Udema BV; Unichema Chemie BV; Unilver Export BV; UniMills BV; UVG Nederland BV; Van de Bergh en Jurgens BV; Vinamul BV; Iglo Ind#x00FA;strias de Celados, Lda.; Ind#x00FA;strias Lever Portuguesa, Lda.; Agra SA; Frigo SA; Lever España SA; Industrias Revilla SA; Pond’s Española SA; Unilever España SA; Glace-Bolaget AB; Margarinbolaget AB; Lever AB; Leverindus AB; Novia Livsmedelsindustrier AB; Elida Robert Group AB; Svenska Unilever F#x00F6;rvaltnings AB; Astra Fett-und Oelwerke AG; Chesebrough-Pond’s (Gen#x00E8;eve) SA; Elida Cosmetic AG; Lever AG; Meina Holdings AG; Sais; A. Sutter AG; Unilever (Schweiz) AG; Unilever-Is Ticaret ve Sanayi Turk Limited Sirketi; Batchelors Foods Ltd.; Birds Eye Wall’s Ltd.; BOCM Silcock Ltd.; Brook Bond Foods Ltd.; Chesebrough-Pond’s Ltd.; Jospeh Crosfield & Sons Ltd.; Elida Gibbs Ltd.; Erith Oil Works Ltd.; Lever Brothers Ltd.; Lever Industrial Ltd.; H. Leverton Ltd.; Lipton Export Ltd.; Lipton Tea Company Ltd.; Loders Croklaan Ltd.; Marine Harvest Ltd.; Mattessons Wall’s Ltd.; Oxoid Ltd.; Plant Breeding International Cambridge Ltd.; Quest International (Fragances, Flavours, Food Ingredients) UK Ltd.; UAC Ltd.; UAC International Ltd.; UML Ltd.; Unichema Chemicals Ltd.; Unilever Export Ltd.; Unilever UK Central Resources Ltd.; United Agricultural Merchants Ltd.; Van de Berghs and Jurgens Ltd.; Vinamul Ltd.; John West Foods Ltd.; ChesebroughPond’s Inc. (Canada); Lever Brothers Limited; Thomas J. Lipton Inc.; A&W Food Services of Canada Ltd.; Unilever Canada Limited; Chesebrough-Pond’s Inc.; Lawry’s Foods Inc.; Lever Brothers Company; Thomas J. Lipton, Inc.; National Starch and Chemical Corporation; Prince Matchabelli, Inc.; Ragú Foods, Inc.; Sequoia-Turner Corporation; Unilever Capital Corporation; Unilever United States, Inc.; Lever y Asociados sacif; Unilever Australia Ltd.; Lever Brothers Bangladesh Ltd.; Ind#x00FA;strias Gessy Lever Ltda.; RW King SA; Lever Chile SA; Compañia Colombiana de Grasas Cogra-Lever 5A; Plantaciones Unipalma de Los Llanos SA; Blohorn SA; CFCI SA; Uniwax SA; Hatton et Cookson SA; UAC of Ghana Ltd.; Lever Brothers Ltd. (China); Hindustan Lever Ltd.; PT Unilever Indonesia; Nippon Lever BV; Brooke Bond Kenya Ltd.; East Africa Industries Ltd.; Gailey & Roberts Ltd.; Lever Brothers (Malawi) Ltd.; Lever Brothers (Malaysia) Sdn. Bhd.; Pamol Plantations Sdn. Bhd.; Anderson Clayton & Co. SA; Pond’s de Mexico SA de CV; Unilever Becumij NV; Unilever New Zealand Ltd.; Niger-Afrique SA; Pamol (Nigeria) Ltd.; Lever Brothers Pakistan Ltd.; Philippine Refining Company, Inc.; UAC of Sierra Leone Ltd.; Lever Brothers Singapore Sdn. Bhd.; Lever Solomons Ltd.; Unilever South Africa Pty. Ltd.; Lever Brothers Ltd. (Ceylon); Formosa United Industrial Corporation Ltd.; UAC of Tanzania Ltd.; Brasseries du Logone SA; Lever Brothers Ltd. (Thailand); Lever Brothers West Indies Ltd.; Gailey & Roberts Ltd. (Uganda); Sudy Lever SA; Lever-Pond’s SA; Plantations Lever au Za#x00EE;re sari; Compagnie des Margarines, Savons et Cosmétiques au Zaire sari; Sedee sari; Lever Brothers Ltd.

Unilever PLC Unilever N.V.

views updated May 21 2018

Unilever PLC Unilever N.V.

Post Office Box 68
Unilever House
Blackfriars
London EC4P 4BQ
United Kingdom
(01) 822–5252

Post Office Box 760
3000 DK Rotterdam
The Netherlands
(10) 464–5911

Public Company
Incorporated: 1929 as Unilever Ltd. and Unilever NV
Employees: 291,000
Sales: £17.12/Dfl61.96 (US$31 billion)
Stock Index: London Amsterdam New York Paris Frankfurt Brussels Zurich Luxembourg Vienna

If the adage “two heads are better than one” applies to business, then certainly Unilever is a prime example. The food and consumer products giant actually has two parent companies: Unilever PLC, based in the United Kingdom and Unilever N.V., based in the Netherlands. The two companies, which operate virtually as a single corporation, are run by identical boards of directors, in which the chairman of each automatically becomes vice-chairman of the other. Foods, drinks, and personal products like soap and detergent constitute the majority of Unilever’s business. Unilever brands include Imperial and Promise margarines, Lipton tea, Ragu foods, detergent products such as Wisk, Sunlight, and Dove; and personal products like Vaseline, Pond’s, and Elizabeth Taylor’s passion perfume. Unilever also has specialty chemicals and agribusiness operations.

William Hesketh Lever, later Lord Leverhulme, was born in Bolton, England in 1851. The founder of Lever Brothers, Lever’s personality combined “the rationality of the business man with the restless ambitions of the explorer,” according to Unilever historian Charles Wilson.

During the depression of the 1880s, Lever, then a salesman for his father’s wholesale grocery business, recognized the advantages of not only selling, but also manufacturing, soap, a non-cyclical necessity item. His father, James Lever, was initially opposed to the idea, believing that they should remain grocers, not manufacturers. He softened, however, in the face of his son’s determination. In 1885, William established a soap factory in Warrington as a branch of the family grocery business. Within a short time Lever was selling his soap across the United Kingdom, as well as in Continental Europe, North America, Australia, and South Africa. He also began a tradition that to some degree still exists at Unilever—that of producing all its raw components. The vertically integrated company grew to include milling operations used to crush seeds into vegetable oil for margarine as well as packaging and transporting businesses for all its products, which then included Lux, Lifebuoy, Rinso, and Sunlight soaps.

In 1914, as the German navy began to threaten food imports, particularly Danish butter and Dutch margarine, the British government asked if Lever would produce margarine. He eagerly accepted the opportunity, believing that the margarine business would be compatible with the soap business because the products both required oils and fats as raw materials. Lever Brothers’ successful diversification, however, now put the company in competition with Jurgens and Van den Berghs, two leading margarine companies.

Fierce competitors in the latter half of the 19th century, Van den Berghs and Jurgens had decided in 1908 to pool their interests in an effort to make the best of the poor economic situation that existed in most of the world. Competition in the margarine industry had intensified, fueled by an increasing number of smaller firms, which were exporting their products and lowering their prices to get a piece of the market. Van den Berghs eliminated the potential for problems such as double taxation, which arose from its interests both in Holland and the United Kingdom, by creating and incorporating two parents companies for itself: one in Holland and one in England. In 1920, Jurgens and Van de Berghs decided there was strength in numbers and joined with another margarine manufacturer, Schicht, in Bohemia. In 1927 the three companies, borrowing the ideal of a dual structure from Van de Berghs, formed Margarine Union Limited, a group of Dutch firms with interests in England, and Margarine Unie N.V., located in Holland.

Through the middle and late 1920s, the oil and fat trades continued to grow. Although the activities of Margarine Unie and Margarine Union were focused on edible fats (margarine), the companies had held soap interests throughout Europe for years. Similarly, although Lever Brothers had produced margarine since World War I, its focus was soap. After two years of discussion, the companies decided that an “alliance wasted less of everybody’s substance than hostility,” and merged on September 2, 1929.

As it does today, the newly formed Unilever consisted of two holding companies: Unilever Limited, previously Margarine Union; and Unilever N.V., formerly Margarine Unie. The new organization included an equalization agreement, to assure equal profits for shareholders of both companies, as well as identically structured boards. Unilever’s parent companies were actually holding companies supervising the operations of hundreds of manufacturing and trading firms worldwide. The end result of the merger was a company which bought and processed more than a third of the world’s commercial oils and fats and traded more products in more places than any other company in the world. Its manufacturing activities—which included detergents and toilet preparations, margarine and edible fats, food products, and oil milling and auxiliary businesses—were joined by a need for similar raw and refined materials, such as coconut, palm, cottonseed, and soybean oil, as well as whale oil and animal fats.

The Great Depression, which struck just after the new company was formed, affected every aspect of Unilever’s multi-faceted operation: its raw material companies faced price decreases of 30% to 40% in the first year alone; cattle cake, sold as a product of its oil mills, suffered with the decline of the agricultural industry; margarine and other edible fats suffered from damaging competition as the price of butter collapsed; and its retail grocery and fish shops suffered along with their customers.

As prices and profits threatened to collapse around the world, Unilever had to act quickly to build up an efficient system of control. The special committee was established in September, 1930 to do that. The special committee operates like a board of directors over the two boards the company has. It was designed to balance Dutch and British interests and act as an inner cabinet for the organization. It also oversees two committees established to deal with Unilever’s world affairs: a continental committee to deal with businesses on the European Continent, and an overseas committee to supervise business elsewhere.

A new generation of management led Unilever through the 1930s: Francis D’Arcy Cooper, who had been chairman of Lever Brothers since William Lever’s death in 1925; Georg Schicht, the former chairman of Schicht Company; and Paul Rijkens, who succeeded Anton Jurgens as chairman of Jurgens in 1933. It was Cooper who seemed to lead the efforts to turn the various companies that comprised Unilever into one Anglo-Dutch team. It was also Cooper who convinced the board of the necessity for a reorganization in 1937, when the relationship between the profit-earning capacities of the Dutch and British companies found itself reversed. Originally, about two-thirds of Unilever’s profits were earned by the Dutch group and one-third was earned by the British group. By 1937, however, due to increasing trade conflicts in Europe, particularly in Germany, the situation had reversed. By selling the Lever company’s assets outside the British Empire, including Lever Brothers Company in the United States, to the Dutch arm of Unilever, the assets of the two groups were redistributed so that they would be nearly equal in volume and profits, which had always been the objective of the two parent companies.

Before 1945, the oils and fats industries had progressed fairly smoothly. The only major industry discoveries were the discovery of the hydrogenation process just before World War I, which enabled manufacturers to turn oils into hard fats, and the possibility of adding vitamins to margarine in the 1920s, which created an opportunity for new health-related product claims. But it was not until the end of World War II that the industry in general, including Unilever, began to recognize the important relationship between marketing and research.

While Unilever’s growth until the mid-1940s was a result of expanded product lines and plant capacities, its greatest achievements between 1945 and 1965 were its adaptation to new markets and new technology. The decade following World War II was a period of recovery, culminating by the early 1950s in rapid economic growth in much of the Western world. Until 1955, demand continued to rise and competition was not a major issue. Afterwards, however, profit margins dropped, competition in Europe and North America sharpened, and success was less assured. Unilever’s strategy was to put its eggs into several baskets by acquiring companies in new areas, particularly food and chemical manufacturers.

Before the formation of Unilever, Lever Brothers had coped with overseas expansion by purchasing two factories in the United States, one in Boston and one in Philadelphia. Following World War II, however, Unilever found it lacked the scientific resources needed to compete with American companies in research and development. Previously, key concerns for the soap industry revolved around color, scent, lather, and how well the products adapted to changing fabrics. Following the war, development efforts in the United States succeeded in creating a non-soap synthetic detergent powder, to the dismay of Unilever and its United States subsidiary, Lever Brothers Company. Detergents have superior cleaning powers, and they do not form insoluble deposits in plumbing systems in hard water. The disappointment, however, spurred the company to value research as highly as marketing and sales. Lever Brothers had three detergent plants in production by 1950, but it remained behind in the industry for some time.

Because the primary ingredients of the new detergents were petro-chemicals, the company now found itself involved in chemical technology. In the synthetic detergent market, each geographic area required a different kind of product, depending on the way consumers washed their clothes and the type of water available to them. The new detergents gave rise to new problems, however; the foam detergents left in sewage systems and rivers had become a major issue by the late 1950s. By 1965, Unilever had introduced biodegradable products in the United States, the United Kingdom, and West Germany.

Throughout the postwar era, Unilever continued to invest in research and research facilities. One of its major establishments—its Port Sunlight facility in Cheshire, which William Lever had founded in the 1920s—researched detergents, chemicals, and timber. In Bedfordshire, the Colworth House facility continued research efforts in food preservation, animal nutrition, and health problems associated with toothpaste, shampoo, and other personal products. By 1965, the company had 11 major research establishments around the world, including laboratories in Continental Europe, the United Kingdom, the United States, and India.

One example of how Unilever effectively answered market demands was its continuing research in margarine. When first developed, margarine was simple a substitute for the butter that was in short supply during wartime. But when butter became plentiful again the product needed to offer other advantages to the consumer. Research focused on methods to improve the quality of margarine, such as making it easier to spread, more flavorful, and more nutritional. This was the primary emphasis at Unilever’s Vlaardingen laboratory. By improving techniques used to refine soybean oil, the company succeeded in improving the raw materials available for margarine production, while at the same time it achieved vast savings, since soybean oil itself was inexpensive.

The advent of the European Economic Community, or Common Market, also created new opportunities for the company. Unilever held several conferences throughout the 1960s to discuss strategies for dealing with marketing, factory location, tariffs, cartels, and transport issues created by the Common Market. Of particular importance was the need to determine the best places for production under changing economic conditions. Since the late 19th century, when the companies that comprised Unilever had set up factories in other European countries to avoid tariff restrictions, Unilever’s products had been manufactured wherever it was most economical. Under the Common Market, many of the tariff restrictions that had spawned the multi-national facilities were eliminated, giving the company an opportunity to consolidate operations and concentrate production in lower-cost countries.

In the 1980s, Unilever undertook a massive restructuring. The company sold most of its service and ancillary businesses, like transport, packaging, advertising, and other services that were readily available on the market and went on a buying spree, snapping up some 80 companies between 1984 and 1988. The restructuring was designed to concentrate the company in “those businesses that we properly understand, in which we have critical mass, and where we believe we have a strong, competitive future,” Unilever PLC Chairman M.R. Angus told Management Today in 1988. Specifically, Unilever’s core businesses are detergents, foods, toiletries, specialty chemicals, and agribusinesses.

In addition to increasing profitability in core areas, restructuring also helped Unilever execute its biggest acquisition to date, when it acquired Chesebrough-Pond’s in the United States in 1986. A company with sales of about $3 billion, Chesebrough is the maker of such brands as Vaseline Intensive Care, Pond’s Cold Cream, and Ragú spaghetti sauce. The acquisition allowed Unilever to fill out its international personal products business, particularly in the United States, where Unilever sees a higher profit potential.

During the 1980s, Unilever’s detergent products posted a 50% growth in operating profit, while food products grew at a faster-than-normal rate. In the United States, plans to take on long-time rival Procter & Gamble were successful in 1984, when Unilever’s Wisk moved P&G’s Cheer out of the number-two spot in the laundry detergent market. In Europe, Unilever completed its first hostile takeover attempt in 15 years when it acquired the British company Brooke Bond, the leading European tea company, for £376 million, which complimented its Lipton brand, the leader in the United States. Two years later, the company launched Wisk in the United Kingdom, as well as Breeze, its first soap powder launch in the United Kingdom since the debut of Surf more than 30 years before.

In 1989, Unilever became a major player in the world’s perfume and cosmetic industry through three more acquisitions. It acquired Shering-Plough’s perfume business in Europe; the Calvin Klein business from Minnetonka, Inc.; and, by far the largest purchase of the three, Faberge Inc., the American producer of Chloe, Lagerfeld, and Fendi perfumes, for $1.55 billion. The upper-end cosmetics market is a high margin business, and Unilever plans to step up marketing of its new products to raise sales.

As it entered the 1990s, Unilever had virtually completed reorganizing its European business in order to better compete after the integration of the European Economic Community in 1992. While its existing businesses are primarily in highly competitive, mature markets, recent acquisitions, like its cosmetics, have positioned the company for continued growth.

Principal Subsidiaries

Unifrost GmbH; Österreichische Unilever GmbH; Nordsee GmbH; Hartog; Iglo-Ola; Lever; Union; Uni-Dan A/S; Paasivaara Oy; Suomen Unilever Oy; Astra-Calvé SA; CNF SA; Française de Soins et Parfums SA; 4P Emballages France SA; Lever SA; Niger France SA; Compagnie des Glaces et Surgelés Alimentaires SA; Française d’Alimentation et de Boissons SA; Unilever Export France SA; Unilever France SA; Deutsche Unilever GmbH; Elida-Gibbs GmbH; 4P Folie Forchheim GmbH; 4P Nicolaus Kempten GmbH; 4P Verpackungen Ronsberg GmbH; 4P Rube Göttingen GmbH; Langnese-Iglo GmbH; Lever GmbH; Meistermarken-Werke GmbH, Spezialfabrik für Back-und Grossküchenbedarf; Nordsee Deutsche Hochseefischerei GmbH; Schafft Fleischwerke GmbH; Unichema Chemie GmbH; Union Deutsche Lebensmittelwerke GmbH; Lever Hellas AEBE; Elais Oleaginous Products AE; Lever Brothers (Ireland) Ltd.; W&C McDonnell Ltd.; Paul and Vincent Ltd.; HB Ice Cream Ltd.; 3C Industriale SpA; Lever Sodel SpA; Sagit SpA; Unil-It SpA; Calvé Nederland BV; Crosfield Chemie BV; Elida Gibbs BV; Zeepfabriek de Fénix BV; Inglo-Ola BV; Lever Industrial BV; Lever BV; Loders Croklaan BV; Lucas Aardenburg BV; Naarden International; National Starch & Chemical BV; Nederlandse Unilever Bedrijven BV; Quest International Nederland BV; Exportslachterij Udema BV; Unichema Chemie BV; Unilver Export BV; UniMills BV; UVG Nederland BV; Van de Bergh en Jurgens BV; Vinamul BV; Iglo Indústrias de Gelados, Lda.; Indústrias Lever Portuguesa, Lda.; Agra SA; Frigo SA; Lever Espaũa SA; Industrias Revilla SA; Pond’s Espaũola SA; Unilever Espaũa SA; Glace-Bolaget AB; Margarinbolaget AB; Lever AB; Leverindus AB; Novia Livsmedelsindustrier AB; Elida Robert Group AB; Svenska Unilever Förvaltnings AB; Astra Fett-und Oelwerke AG; Chesebrough-Pond’s (Genève) SA; Elida Cosmetic AG; Lever AG; Meina Holdings AG; Sais; A. Sutter AG; Unilever (Schweiz) AG; Unilever-Is Ticaret ve Sanayi Türk Limited Sirketi; Batchelors Foods Ltd.; Birds Eye Wall’s Ltd.; BOCM Silcock Ltd.; Brook Bond Foods Ltd.; Chesebrough-Pond’s Ltd.; Jospeh Crosfield & Sons Ltd.; Elida Gibbs Ltd.; Erith Oil Works Ltd.; Lever Brothers Ltd.; Lever Industrial Ltd.; H. Leverton Ltd.; Lipton Export Ltd.; Lipton Tea Company Ltd.; Loders Croklaan Ltd.; Marine Harvest Ltd.; Mattessons Wall’s Ltd.; Oxoid Ltd.; Plant Breeding International Cambridge Ltd.; Quest International (Fragances, Flavours, Food Ingredients) UK Ltd.; U AC Ltd.; UAC International Ltd.; UML Ltd.; Unichema Chemicals Ltd.; Unilever Export Ltd.; Unilever UK Central Resources Ltd.; United Agricultural Merchants Ltd.; Van de Berghs and Jurgens Ltd.; Vinamul Ltd.; John West Foods Ltd.; Chesebrough-Pond’s (Canada) Inc.; Lever Brothers Limited; Thomas J. Lipton Inc.; A&W Food Services of Canada Ltd.; Unilever Canada Limited; Chesebrough-Pond’s Inc.; Lawry’s Foods Inc.; Lever Brothers Company; Thomas J. Lipton, Inc.; National Starch and Chemical Corporation; Prince Matchabelli, Inc.; Ragú Foods, Inc.; Sequoia-Turner Corporation; Unilever Capital Corporation; Unilever United States, Inc.; Lever y Asociados sacif; Unilever Australia Ltd.; Lever Brothers Bangladesh Ltd.; Indústrias Gessy Lever Ltda.; RW King SA; Lever Chile SA; Compañia Colombiana de Grasas Cogra-Lever SA; Plantaciones Unipalma de Los Llanos SA; Blohorn SA; CFCI SA; Uniwax SA; Hatton et Cookson SA; UAC of Ghana Ltd.; Lever Brothers (China) Ltd.; Hindustan Lever Ltd.; PT Unilever Indonesia; Nippon Lever BV; Brooke Bond Kenya Ltd.; East Africa Industries Ltd.; Gailey & Roberts Ltd.; Lever Brothers (Malawi) Ltd.; Lever Brothers (Malaysia) Sdn. Bhd.; Pamol Plantations Sdn. Bhd.; Anderson Clayton & Co. SA; Pond’s de Mexico SA de CV; Unilever Becumij NV; Unilever New Zealand Ltd.; Niger-Afrique SA; Pamol (Nigeria) Ltd.; Lever Brothers Pakistan Ltd.; Philippine Refining Company, Inc.; UAC of Sierra Leone Ltd.; Lever Brothers Singapore Sdn. Bhd.; Lever Solomons Ltd.; Unilever South Africa (Pty.) Ltd.; Lever Brothers (Ceylon) Ltd.; Formosa United Industrial Corporation Ltd.; UAC of Tanzania Ltd.; Brasseries du Logone SA; Lever Brothers (Thailand) Ltd.; Lever Brothers West Indies Ltd.; Gailey & Roberts (Uganda) Ltd.; Sudy Lever SA; Lever-Pond’s SA; Plantations Lever au Zaîre sari; Compagnie des Margarines, Savons et Cosmétiques au Zaîre sari; Sedee sari; Lever Brothers (Private) Ltd.

Unilever

views updated May 29 2018

Unilever

founded: 1930

Contact Information:

headquarters: lever house, 390 park avenue
new york, new york 10022-4698 phone: (212)888-1260 fax: (212)906-4666 email: [email protected] url: http://www.unilever.com

OVERVIEW

Unilever is one of the world leaders in packaged consumer goods. Its many products include personal hygiene products, frozen foods, margarine, tea, and washing powders. According to the company, 150 million people choose their brands every day to "feed their families and clean their homes." Despite being one of the most successful corporations, and having a global presence, Unilever is a company whose brand names are more well-known than that of their producer. Unilever manufactures and sells products like Slim-Fast, Dove, Ben & Jerry's, Q-Tips, Wisk and Lipton.

When Unilever purchased Bestfoods, famous for the Hellmann's and Skippy brand names, it became one of the world's top three food companies, behind Nestlé and Kraft. It is also the world's second largest packaged consumer goods company, behind Procter & Gamble. Today, Unilever is based in two global divisions: Unilever Bestfoods and Home and Personal Care. Both divisions have an executive board, responsible for divisional strategy and global implementation. Truly a multinational corporation, Unilever sells its products in over 150 countries.

COMPANY FINANCES

At the end of fiscal year 2000, Unilever reported sales of $44,813,000,000, which represented sales growth of 2.7 percent.

ANALYSTS' OPINIONS

At the turn of the century, Unilever was ranked as the top FMCG company in the Dow Jones Sustainability Index 2000. At the same time, investors were concerned about Unilever's performance when the company bought Bestfoods in 2000. In fact, the integration caused Credit Suisse First Boston to downgrade Unilever from a "hold" to a "sell" rating. Unilever, however, expressed optimism, pointing out that its sales rose 35 percent by June 2001. It estimated that the acquisition would produce an annual savings of $32 million. Further, Unilever said it expected to realize low double-digit growth in earnings per share for the full year of 2002. Analysts on Wall Street were expecting Unilever to earn $3.09 per share in that same period.

HISTORY

Unilever's roots go back to the nineteenth century, when Lever Brothers, a British soapmaking company, was founded in 1885 by William Hesketh Lever. In 1917, the company diversified into food products, including fish, ice cream and canned goods. In 1930 that company merged with Margarine Unie, a Dutch Margarine company, to form Unilever. The move seemed a logical one, as both companies competed for the same raw materials and consumer market. During the 1920s, Margarine Unie had grown through mergers with other margarine companies. Between them, Lever and Maragarine Unie now had operations in 40 countries.

Throughout the next three decades, Unilever improved its technology, and its business grew and diversified and it expanded its reach into Latin America. It also tried out different business areas. During World War II, the company helped make tank periscopes and soldiers' food rations. Unilever entered the synthetic detergent market in 1954, when it introduced Omo, a blue detergent powder. From there, the company developed brands like Persil and Skip, and it has vied with Proctor & Gamble for top positions in the market.

Throughout the 1950s, Unilever entered into chemicals, packaging, and market research and advertising. At the beginning of the Lever-Unie merger, soap products accounted for 90 percent of Unilever's profits, but as the company moved into other areas that figure decreased. By 1980, soap products only contributed to 40 percent of its profits.

In the latter half of the twentieth century, the company began streamlining its operations. It rid itself of its packaging companies, its chemicals business, and some of its agricultural enterprises, and it concentrated on personal hygiene and food products. In the 1980s, it scored several important acquisitions including the Brooke Bond tea company, Chesebrough-Pond's Inc., and the Faberge/Elizabeth Arden brand lines. In buying Brooke Bond, it strengthened its position in the tea market. When it bought Chesebrough-Pond's, Unilever became a leader in the world's skin care market.

In the 1990s, Unilever sold much of its remaining agribusiness interests and it began to focus on what it considered its core products and activities. In 1999, Unilever further streamlined its organization, as it announced that it would focus on fewer and stronger brand names. This, it believed, would spark faster growth. At one point, Unilever had 1,600 brands. The figure is now down to about 400.

FAST FACTS: About Unilever

Ownership: Unilever is a joint venture of Unilever NV (The Netherlands) and Unilever PLC (UK), the parent companies. The two companies have operated as one since 1930. They trade separately but have one board of directors. Unilever's corporate centers are London and Rotterdam. In the United States, it is traded on the New York Stock Exchange.

Ticker Symbol: UN

Officers: Niall Fitzgerald, Chmn., Unilever PLC, VChmn., Unilever NV, 56; Antony Burgmans, Chmn., Unilever, VChmn., Unilever PLC, 54; Clive Butler, Corporate Development Dir., 54; Rudy Markham, Financial Dir., 54

Employees: 295,000

Principal Subsidiary Companies: Unilever, a multinational organization, operates over 300 companies in 90 different countries. Its United States operations consolidated into two main companies, specializing in foods and home and personal care. Unilever has 104 offices and manufacturing sites in 27 states and Puerto Rico.

Chief Competitors: Unilever's main competition comes from the consumer non-cyclical sector of the food processing industry. Major competitors include ConAgra Foods, Inc., Kraft Foods, Nestle, Proctor & Gamble, Sara Lee Corp., and Tyson Foods, Inc.

In 2000, Unilever bought Slim-Fast, which became one of its top sellers. That same year, Unilever implemented corporate initiatives to further spark growth, including organizational restructuring and the splitting of the company into two global units (food and home products, and personal care products). As part of this strategy, it also started selling the subsidiary businesses that weren't turning enough profit.

STRATEGY

Unilever's declared strategy is to focus on research and development-which it invests billions of dollars a year into-and marketing of brands most popular with consumers. Despite the streamlining the organization has experienced in recent years, it intends to continue developing new brands in anticipation of future consumer needs. At the same time, it seeks to foster growth by focusing on key brands and simplifying its business systems. It hoped to accomplish these aims when it consolidated its best-selling brands into two global divisions: Foods, and Home and Personal Care. So far, the company has been pleased with the results.

As part of its strategy, Unilever institutionalized a corporate structure designed to be effective. Specifically, the purpose of the structure is to clarify roles, responsibilities, and decision making. One of its critical elements is the executive committee, which is responsible for agreeing company priorities and allocating resources; setting overall corporate targets; agreeing and monitoring business group strategies and plans; identifying and exploiting opportunities created by Unilever's scale and scope; managing external relations at the corporate level; and developing future leaders. The committee is led by the chairmen of Unilever PLC and Unilever N.V.

The structure also includes regional presidents, advisory directors, and senior corporate officers. Regional presidents are responsible for delivering business results in their respective regions. Advisory directors are the principal external presence in Unilever's government. One of their key roles is assuring that government provisions are adequate and reflect best practices. They attend quarterly meetings, committee meetings, conferences of the directors and the Executive Committee, as well as meetings with the Chairmen. Senior corporate officers see to it that board meetings and board committee meetings are supplied with the information they need.

Underlying the corporate structure is a strict code of business principles. Main principles include a high standard of conduct, avoidance of conflicts of interest, product assurance, and reliable financial reporting, among others.

INFLUENCES

To a large extent, the growth and success that Unilever has achieved in result years results from recognition of its diversity as well as a faithfulness to its own mission statement. The company's stated purpose is to meet "the everyday needs of people everywhere," which refers to its expansive global reach. In keeping with its mission statement, Unilever regularly adapts it line of products as to target different cultures in different parts of the world. The organization's radical restructuring in the last years of the 20th century was part of this plan. One of the aims of the restructuring was to decentralize responsibility and move it to specific international regions and product areas.

CURRENT TRENDS

The most significant part of Unilever's reorganization is the strategic plan it calls "The Path to Growth." Essentially, this involves a significant streamlining of its product portfolio. As it headed into the twenty-first century, the company felt it necessary to reduce its brands from 1,600 to 400. When it made the decision, in September 1999, the company reasoned that focusing on fewer and stronger brands would promote faster growth. The stated goal of the strategy was to accelerate top line growth and step up the rate of margin improvement in five years.

CHRONOLOGY: Key Dates for Unilever

1885:: Lever Brothers is founded by William Hesketh Lever
1917:: Lever Brothers diversifies its product line to include food items
1930:: Lever merges with Margarine Unie to form Unilever
1954:: Unilever entered the synthetic detergent market
1999:: Unilever begins a radical streamlining of its organization.
2000:: Unilever purchases Slim-Fast, which becomes one of the company's top sellers; Unilever sells 27 business as part of its organizational restructuring; Unilever purchases Bestfoods

"The Path to Growth" involved a shake-up at the top level of management, splitting the company into two global units, and selling off any subsidiary businesses making less than average profits. The concentration on core brands resulted in the selling of 27 businesses during 2000. At the same time, Unilever acquired several well-known companies, including Bestfoods, Ben & Jerry's, and Slim-Fast.The restructuring resulted in specific changes in its divisions. Unilever's Foods division was renamed Unilever Bestfoods. Its categories now included dressings, beverages, spreads and cooking, health and wellness, frozen foods, and ice cream. Home and Personal Care division categories now included deodorants, hair care, household care, laundry, skin care and cleansing, oral care and prestige products.

At the start of the new century, Unilever also decided to venture into cyberspace-that is, it deemed e-commerce a key component of its growth strategy. As part of this, Unilever formed alliances with companies like Compaq, IBM, and Microsoft. Also, in February 2000, Unilever and iVillage formed a new Internet company.

PRODUCTS

Unilever's products include a large number of well-known name brands listed under several categories. Its cosmetics include Rimmel, Cutex, Elizabeth Arden, and Sensiq. Beauty products include Ponds, Vaseline Intensive Care, and Close-up. Shampoos include All Clear, Cream Silk, Dimension, Pears, Sun-silk, and Salon Selectives. Soaps include Dove, Knights Castile, Lifebouy, Lux, Pears, and Sunsight. Toothpastes include Shield, Signal, and Mentadent. Some it its aftershaves include Lynx, Axe, Rexona, Degree, and Suave. Washing powders and laundry liquids include Persil, Radion, Surf, and Wisk. Its oils, fats, and margarines include Cookeen, Dante, Delight, and Outline, among others. Teas and coffees include Lipton, Lyons, and Red Mountain. Undoubtedly, Unilever's best known products are its food products and brand names like Slim-Fast, Ragu, Skippy, Good Humor, Breyers, and Ben & Jerry's.

GLOBAL PRESENCE

With 300 locations in 90 countries, Unilever is truly part of the global community. Its international business unit, DiverseyLever, has locations in Asia, Europe, Latin America and North America. The company's home and personal care regions include Africa, Middle East & Turkey Home. Its Unilever Bestfoods regions include Africa, Asia, Europe, the Middle East, and North America.

CORPORATE CITIZENSHIP

Unilever proudly points out that it is internationally recognized as one of the world's most environmentally responsible businesses. It has established a corporate policy that commits the company to meeting the needs of customers and consumers in an environmentally sound and sustainable manner. The strategy focuses on achieving its goals through eco-efficiency, eco-innovation and three sustainability initiatives on agriculture, fish and water. Around the world, it has set up various environmental initiatives to ensure minimum impact on local environments. By 2001, 73 of its factories reached the international environmental management system standard ISO 14001.

Unilever recognizes its social responsibility and, as such, it has established the Social Review 2000, which maps out the major areas of the company's social interaction including wealth creation, employment values and practices, consumer commitment, and its responsibilities towards the environment and the communities in which its operate.

As a member of the global community, Unilever is concerned with the health, education, and welfare of the populations of local communities. Each of its operating companies are involved in projects and programs that include dental services for remote communities, funding for hospitals, care for disabled people, and teaching people young and old the importance of personal hygiene. Unilever is also involved in projects and initiatives to raise standards of education in the local communities.

FRANKENBEANS

Not all of Unilever's products have been resounding successes. One notorious failure was its Beanfeast line, marketed in the late 1990s. With Beanfeast, Unilever became the first multinational company to use genetically modified (GM) products. Beanfeast contained soy beans manufactured from the genetic material of a virus. When this was learned, the company was inundated with thousands of angry calls from consumers in the United Kingdom. By 1999 Unilever decided to withdraw Beanfeast and get out of GM foods.

EMPLOYMENT

Unilever believes that success requires the highest standards of corporate behavior toward employees, consumers and communities. To that end, it has created a work environment that embraces diversity and doesn't compromise integrity or professional excellence. As a result, the company consistently ranks among the world's top employers. Corporate leaders are encouraged to foster the pursuit of excellence, while employees are challenged to pursue goals, develop professionally, and maintain a balance between their professional and personal lives.

When recruiting employees, Unilever seeks individuals who can demonstrate leadership, team commitment, integrity, innovation, and drive; and who have a passion for achievement. It seeks experienced professionals for senior positions, and it offers a graduate development program for recent graduates or students nearing graduation. The aim of the program is to develop future business leaders within the organization.

Unilever offers career management processes that provide professional development and recognition. It also provides learning opportunities and has installed feedback systems that ensures individuals are on target with their performance, development and career plans.

SOURCES OF INFORMATION

Bibliography

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parker, kay. "old-line goes online." business 2.0, june 2000. available at http://www.business2.com.

semilof, margie. "unilever tackes e-logistics." internet week, 30 october 2001. available at http://www.internetweek.com.

"nestle and unilever go to war" management first, 14 may 2001. available at http://www.managementfirst.com.

For an annual report:

on the internet at: http://www.unilever.com/investorcentre/financialreports

For additional industry research:

investigate companies by their standard industrial classification system codes, also known as sics. unilever's primary sics are:

2038 frozen specialties, not elsewhere classified

2099 food preparations, not elsewhere classified

2841 soap & detergents

2842 specialty cleaning polishing

also investigate companies by their north american industry classification system codes, also known as naics codes. unilever's primary naics codes are:

311412 frozen specialty food manufacturing

325611 soap and other detergent manufacturing

325612 polish and other sanitation good manufacturing

325620 toilet preparation manufacturing

Company Profiles for Students

Unilever

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Unilever

Unilever is one of the oldest and most relevant multinationals in consumer goods. It was created in 1929 by a merger of British soap and Dutch margarine companies. Since that time Unilever has operated affiliates on all continents, with a wide portfolio of products such as edible fats, detergents, convenience foods, personal care products, specialty chemicals, and animal feeds. Referring to its historical origin, not one but two companies—one British (Unilever Limited, plc after 1981) and one Dutch (Unilever N.V.)—lead the multinational group. Although these companies are owned by different sets of shareholders, the boards of directors are identical.

PREDECESSORS

The strongest similarity between the two main Unilever predecessors was their common reliance on the same group of final consumers. The Dutch Margarine Union (consisting of several margarine-producing companies) had its main market since the second half of the nineteenth century in the large industrial towns of Great Britain and the booming German Empire. Lever Brother's main enterprise was the production of soap for the English working-class market.

Whereas the Margarine Union was a strong and prosperous enterprise focused mainly on Europe, Lever Brothers was already a global player. Trading companies and plantations in Africa were part of the company as suppliers of soap for most British dominions and India. Lever Brother's most successful product since the 1880s has been Sunlight Soap, which is an early example of modern brand-marketing methods. The merger of the two companies was especially attractive for Lever Brothers because of the strength of Margarine Union, but Lever Brother's purchase of an African subsidiary (Niger Company) and other ill-advised ventures caused difficul-ties for the company. For the Margarine Union the merger was attractive because of the wide geographical span of Lever Brothers, which surmounted the cramping of European markets after World War I.

THE NEW MULTINATIONAL

The name of the new multinational, Unilever, was created from the two names of its predecessors, Margarine Union and Lever Brothers. At the time of the merger, 1929, the world economic crisis affected consumers of the company's products and therefore Unilever itself. Consequently, Unilever concentrated production at a limited number of facilities and limited its number of brands. Beside the concentration, rationalization of production processes was the main answer to the crisis.

This strategy gave Unilever the ability to influence consumer habits via strong marketing campaigns for its few brands. Especially detergents such as Sunlight Soap, Lux, Persil, and Omo or the margarine Rama were campaigned directly to housewives, creating class-related perception of quality in the middle class. For example, the U.S. affiliate of Unilever spend 25 percent of their total sales on marketing, producing a gain from 2 to 8.5 percent of its share of the U.S. soap market in the early 1930s.

NEW CONSUMER HABITS AFTER WORLD WAR II

After World War II Unilever became influenced by changes in consumer habits, especially the acceptance of new technologies by the middle class. Although convenience foods and frozen products were known on an experimental level before World War II, especially in Germany, where national fish industry had attempted to introduce frozen convenience products, they largely had failed before the 1950s.

Following improvements in freezing and storage technology, Unilever launched new brands and products. Fish fingers, first introduced by the British Unilever affiliate Birdseye at the end of the 1950s and a few years later by the German affiliate Nordsee/Iglo, are a key example for this development. With Captain Birdseye (and its German counterpart Käptín Iglo) some of the best-known marketing campaigns in history were launched to introduce a product in a market segment that heretofore had no brand marketing. There were similar developments in the market segment for washing detergents.

Lever Brothers's historical connection to Africa as a source for the raw materials of production provided Unilever the opportunity to export European middle-class consumer habits and related brands to the developing counties of the continent. Together with its affiliates all over the world Unilever became a major participant in the equalization of consumer preferences, and therefore a promoter of globalization.

OTHER MULTINATIONALS

In the 1970s Unilever ranked twenty-sixth (in sales, twelfth) among the largest world businesses. In contrast to most other leading multinationals, Unilever is based on a wide portfolio of products rather than on one particular area. Its primary products are margarine, frozen foods, soup, tea, meat, washing powder, and plastic packaging, and it still maintains tropical plantations for the production of raw materials or other related businesses.

Although there were attempts to expand into the production of, for example, copy machines or shipping lines, Unilever restructured itself as a multinational whose business is the consumption of everyday products in middle-class households all over the world. As a vertically integrated multinational, Unilever operated in a lot of its field of interests the whole production chain from the production of the raw materials (plantations or fishing fleets) via processing facilities down to wholesale and retail shops were parts of Unilever's activities. Adjusting its brand portfolio to actual middle-class standards has always been an element of Unilever's strategy, and, in turn, this portfolio and its marketing campaigns heavily influenced the standards of the middle class. Especially in Europe and in developing countries, the Unilever brands became a synonym for modern, Western consumer habits and, to a certain degree, for an American way of life, even though the company itself was a mainly European-based multinational.

SEE ALSO Africa, Labor Taxes (Head Taxes); Coffee; Empire, British;Tea.

BIBLIOGRAPHY

Fieldhouse, David Kenneth. Unilever Overseas: The Anatomy of a Multinational, 1895–1965. London: Hoover Institution, 1978.

Jones, Geoffrey. "Control, Performance, and Knowledge Transfers in Large Multinationals: Unilever in the United States, 1945–1980." Business History Review 76, no. 3 (Fall 2002): 435–478.

Reader, William Joseph. Fifty Years of Unilever. London: Heinemann, 1980.

Wilson, Charles. The History of Unilever: A Study in Economic Growth and Social Change. 2 vols. London: Cassell, 1954.

Wilson, Charles. Unilever, 1945–1965: Challenge and Response in the Post-War Industrial Revolution. London: Cassell, 1968.

Ingo Heidbrink

History of World Trade Since 1450

Unilever

Unilever

COMPANY PERSPECTIVES

KEY DATES

Unilever

Unilever

Soap and Margarine Origins

1920s: The Birth of Unilever

1930s: Surviving the Great Depression

Company Perspectives:

Postwar Era: Adapting to New Markets and Technology

Key Dates:

1980s: Restructuring and Major Acquisitions

Positioning for the 21st Century

Principal Subsidiaries

Principal Operating Units

Principal Competitors

Further Reading

Unilever Plc (Unilever N.V.)

Unilever Plc (Unilever N.V.)

Principal Subsidiaries

Further Reading

Unilever PLC Unilever N.V.

Unilever PLC Unilever N.V.

Principal Subsidiaries

Further Reading

Unilever

Unilever

Contact Information:

OVERVIEW

COMPANY FINANCES

ANALYSTS' OPINIONS

HISTORY

FAST FACTS: About Unilever

STRATEGY

INFLUENCES

CURRENT TRENDS

CHRONOLOGY: Key Dates for Unilever

PRODUCTS

GLOBAL PRESENCE

CORPORATE CITIZENSHIP

FRANKENBEANS

EMPLOYMENT

SOURCES OF INFORMATION

Bibliography

For an annual report:

For additional industry research:

Unilever

Unilever

PREDECESSORS

THE NEW MULTINATIONAL

NEW CONSUMER HABITS AFTER WORLD WAR II

OTHER MULTINATIONALS

BIBLIOGRAPHY

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Unilever

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