How Unilever is Planning to Stay On Its CPG Perch

Unilever is doing more and more things right and getting more and more credit for it, from constituencies ranging from investors to global consumers. Now, the task of CEO Paul Polman is to build on the many gains made by the British-Dutch company and its stable of brands.

Over the past three years, Unilever — whose competitive set includes other CPG and health-and-beauty giants including P&G and Colgate-Palmolive — has gained global market share each year, after losing it each year from 2002 to 2008, according to a new report from Sanford C. Bernstein.

While the company performed near the bottom of its global industry clusters for top-line growth from 2001 through 2005, it came in at the middle of the food category last year, ranked No. 2 in beauty and personal care behind Estee Lauder, and came in at No. 1 in the home-care arena.

Polman, a marathon runner, has waged a good race in the nearly four years since he took the helm.

He invested in global brands such as Lipton, Omo and Ben & Jerry's, taking them into fast-growing emerging markets and launching new products at the same time. Unilever topped its CPG/FMCG rivals in emerging markets, with 54% of its revenue coming from developing markets (vs. 51% for Danone, 50% for Colgate and 45% for Coca-Cola) last year.

Meanwhile, rivals such as P&G have stagnated, and food competitor Groupe Danone has slipped because of the rocky economy in Spain.

Pricing and marketing practices have come in for especial attention by Polman. For example, one way Unilever has gained share has been by price discounting that, among other things, has helped it compete more effectively with ever more aggressive private labels to attract recession-weary consumers.

Yet Polman told Marketing magazine in the UK that he views discounting as "a zero-sum game," and Unilever reportedly now is trying to move away from the practice whether consumers are ready for that or not. The company now wants to emphasize the rising equity in its brands, Marketing said.

For that, Polman will count in large part on CMO Keith Weed, a career Unilever executive who has held the post for two years. Weed unveiled a new marketing strategy for Unilever under the tagline "Crafting Brands for Life" last year, and has presided over the advertising makeover of Dove. He's also investing more in marketing training and in digital marketing for Unilever and its brands.

In the CPG universes in which Unilever competes, superiority may not last forever; reference P&G and Johnson & Johnson. But the Dutch company is on its highest perch in quite a while, and Polman intends to keep it there.