Making our products more affordable

Making our products more affordable

Unilever’s products are sold in over 180 countries and used by 2 billion consumers every day. Consumers buy 170 billion Unilever packs around the world every year. People have different lifestyles, tastes, preferences and budgets. By providing high-quality, innovative brands that offer value for money, we aim to meet the different needs of consumers around the world.

Some groups suggest that people living on low incomes should not seek to buy global brands. We disagree. Our research and experience have shown us that poorer consumers are often the most discerning. When spending from a limited budget, they cannot afford to waste money on products they do not trust to be effective. The Unilever brand gives them the confidence to know that the product will deliver on its promise, so their money will be well spent.

Whether it is through new distribution channels, using smaller formats or creating new products, we are trying to develop business models to reach the members of society on low incomes. This makes business sense and enhances our ability to improve lives in some of the poorest communities.

The emerging market opportunity

Population (billions) in developing and emerging markets, based on Unilever's estimates of income at purchasing power parity exchange rates.

Small pack sizes

In several markets our brands are available in small sachets, offering a small amount of shampoo or detergent at a low cost. This makes our quality brands attainable by people with low or irregular incomes.

In many countries, small sachets of shampoo or washing powder cost less than the equivalent of 10 US cents, and their sales can account for a significant proportion of turnover.

Examples of small pack sizes costing less than 10 US cents include:

• Royco soups, Close Up toothpaste and OMO laundry powder in Africa
• One-rupee sachets of Lux and Sunsilk shampoo in India
• Our 30g pack of Pepsodent toothpaste in India – enough for a family of five to clean their teeth once a day for ten days – costs just six rupees (around €0.11).

As well as small pack sizes we are developing new products. In 2008 we launched a quality, low-cost toothbrush. Pepsodent Smart Clean is priced at just 10 rupees in India (equivalent to 16 euro cents).

Replicating this approach across a broader range of brands is a much bigger task. And there are some trade-offs in trying to meet all our social, economic and environmental commitments. Making products available in small-pack sizes and single-dose sachets brings quality brands to some of the world's poorest consumers, but it also contributes to litter in markets where waste management infrastructure cannot always provide facilities for reuse and recycling.

We are working with stakeholders on how best to solve this dilemma without affecting the affordability and accessibility of our products.

In 2009 we identified a potential approach - pyrolysis - which turns sachet material into fuel and recovers up to 60% of its embedded energy. However, the problem with sachets is often not what they are made of but how they are disposed of. The sachets contain very small amounts of material and there is currently little economic incentive for their collection. So we are working with others both to raise awareness of litter issues and explore economic models which create incentives for the collection and reuse of our sachet packaging.

Safe & affordable drinking water – Pureit

During 2010 as part of our Sustainable Living Plan, we set a new target:

• We aim to make safe drinking water available and affordable to 500 million people through our Pureit in-home water purifier by 2020. Our Pureit in-home water purifier provides safe drinking water that is 'as safe as boiled' without needing electricity or pressurised tap water. It removes harmful germs in line with stringent international standards, at an affordable price.

We have produced several different models of Pureit to appeal to a range of consumers – from those on low incomes to wealthier consumers. The most affordable model in India costs the equivalent of just €17, bringing it within the reach of those with little money. With an ongoing running cost of just one euro cent for more than 2 litres of safe drinking water, this is significantly lower than the cost of boiling water or buying bottled water.

Successfully expanding sales of the Pureit purifier is now a top business priority for us. By the end of 2009 Pureit had reached all states in India. We are now in the process of launching it in other countries: at the end of 2010 Pureit was launched in Indonesia and Bangladesh.

See Providing safe drinking water for more.

A tailored approach to meeting local needs

We also seek to tailor our brands to meet the specific and varying needs of our consumers. Tea, for example, is drunk in different styles around the world and we offer varieties to suit local tastes and customs.

Everyone needs to wash, but they do it in various ways. Much depends on the availability and cost of water, as well as the affordability of soap. In Iceland, 70% of people use a bath; in Israel, 82% use a shower; in Iran, two-thirds use a shower too, but another third use a mug; in Cambodia, half use a klong jar (a water container), and the rest use the river; and in Ethiopia, 69% use a bucket.

We need to be sensitive to such local conditions when designing our soap bars or shower gels. We use our global knowledge and experience to address local issues, and deliver local solutions at an affordable price.