Below is an interview with Bruno Witvoet, the executive vice president of Unilever Africa, as it appeared in PwC’s report ‘The Africa business agenda: Seeing the glass half-full’. The original document can be downloaded here.
What growth strategies have been successful for Unilever in Africa?
Being there for the long term. We are emerging from a period that saw a surge of interest in Africa a few years ago on the basis of high growth projections followed by a recent period where many companies are scaling back.
We’re very proud of the fact that Unilever has been operating on the continent for over 100 years and our strategy builds markets for the long term. Short-run volatility is a fact of life in emerging markets and while we focus on getting the returns our shareholders deserve, the same as in any region, it is particularly important to invest in Africa with an eye beyond the immediate headlines.
Along those lines, we are continually developing our supply chain to maximise local production and use local raw materials wherever possible to boost employment and growth in local economies, including in our tea plantations. In this way we become contributors to growing the African economy rather than merely profiting from its growth. The key for Africa is not just growth, but sustainable growth.
Making sure our sustainable business model works for Africa has therefore been crucial, not just in our supply chain. This revolves around providing everyday consumer goods at a range of price points, from affordable essential items to more premium products.
But at the heart of everything we do is our commitment to building a more inclusive society. We have invested in local communities and built a portfolio of products deeply rooted in those communities.
Rather than just repackaging global products, we develop specific products for individual countries and match our brands to local needs. Blue Band margarine and Geisha soap in Kenya are specifically formulated to appeal to Kenyan consumers.
We have developed other products which address particular public health issues. For example, our Knorr iron-enriched bouillon cubes brand aims to tackle anaemia in women and girls in Nigeria and our Blue Band Margarine has Omega 3 and 6 oils designed to help provide a balanced diet for children in East Africa.
We’ve found that our policy of putting a social mission such as hygiene or nutrition at the heart of a brand builds consumer loyalty and trust. In many countries, we partner with schools so that we can educate and inform young people on hygiene through our Lifebuoy and Domestos brands and nutrition through Blue Band.
We know that we alone can’t solve the world’s problems but we’re determined to be part of the solution. Having purpose at the heart of our strategy, just like PwC, works for the continent and is also good business.
What is the biggest opportunity for Unilever in Africa in the next five years?
Our go-to-market approach and unique breadth of brands allows us to focus on the mass market segments with some reach to the premium end and adapt to changes in the different economies across the continent.
Our approach of targeting a mass market means we are ready to benefit from demographic changes such as population increases or rapid urbanisation, which therefore present a big opportunity for us. This is why Africa will remain a critical market for Unilever and why we see accelerating growth across the continent as playing a full role in the success of Unilever globally.
Over the last 12 months, we have seen strong growth in many African countries but there are obviously always areas we could do better. Like many other companies operating across the continent, South Africa is a huge market for us, but much growth is also likely to come from other countries such as Nigeria, Ethiopia and Tanzania, where populations are increasing quickly, and creating opportunities for us to compete for a bigger share of the market.
Even in South Africa, despite our well-established presence, we are still investing heavily as there are still regional differences and changing markets within the country that can represent opportunity.
What are the biggest short-term challenges to doing business in Africa?
There are two very topical challenges that are making trading difficult in the short term. Currency volatility is a big issue for many businesses working on the continent and Unilever is no exception.
Obviously as a global company, we manage the unpredictability and volatility of currencies in many countries but it is a particular short-term challenge in Africa with volatility more in the order of 20% than the 3-5% we commonly see elsewhere.
The second challenge is around infrastructure, especially roads. We are committed to producing as much of our product locally as possible rather than importing products and to reaching as many consumers as we can.
This commitment to helping the local communities in which we operate is a key part of our global values. However, as a consumer goods company, we need to have a reliable and safe distribution mechanism to do this.
In some countries, it can be challenging to move goods by road. Further, energy supplies in some regions can be unreliable, which can hinder our ability to manage our manufacturing processes. And the pace of progress on infrastructure projects is often not as quick as it could be.
What is your biggest challenge with regard to talent?
I think the biggest challenge is to ensure that the standard of what is provided in public and private education continues to rise across the continent. There are some world-class institutions in Africa, but we need to ensure that we are always striving to improve them.
This will help ensure that businesses like ours have a pipeline of high quality home-grown talent that we can develop into the next generation of leaders.
Diversity in our people is also a key global value at Unilever and we have a number of programmes in place to increase the level of African talent in our organisation.
There are two sides to this. One is about developing African talent by exposing them to global experience. For example, at the moment we have about 90 African employees working in different parts of the world to give them experience in different markets and bring that and their new capabilities back to Africa.
The second is to tap into the diaspora at key universities internationally to attract them back to Africa.
Ultimately, our aim is to grow more African leaders who one day will be the next CEO, CFO and board members of our business.
What strategies have worked for you in combating corruption?
Corruption is an issue that affects all companies operating on the continent and the only response is to have a zero tolerance policy internally. The reputation of our values is too closely linked to our brand to do otherwise, so we at Unilever have a clear Code of Business Principles and integrity is a core value for us.
Any employee engaging in corrupt or inappropriate behaviour won’t last long in our organisation. Our ethos is simple: if corruption occurs, we will investigate thoroughly and if there is clear evidence of wrongdoing then we will act quickly and decisively.
Of course we have strategies such as extensive mandatory training, anonymous whistleblower hotlines for all employees, including on our plantations, and technology such as e-learning.
However, the truth is that there is nothing better than leadership and the example set by the many upstanding and excellent African managers across our business who operate to global best practice standards of integrity.