‘We’ve learned a lot from the start-up world’: Unilever on how it has ‘re-framed’ innovation
No more important is invention and creativity in the world of ice cream. In this category – which is notoriously reliant on the weather for sales – you either invent or die.
“I’m just about to finish my 17th ice cream season. And you can never completely rely on the sunshine,” Matt Close, Executive Vice President Global Ice Cream at Unilever told the IGD Live event in London. “So my category really is one which is about innovation or slowly [declining].”
'Innovation will unlock the growth that we want to see'
Unilever is changing the way it approaches innovation, explained Close. “The way our teams work is very different from a few years ago. In the last few years as companies have gone through a thinning down and [shift] to zero-based budgeting, the innovation conversation became a little bit too minocular. It became more about new SKUs and NPD.” Unilever is changing this to ‘bring that innovation conversation back to the more holistic approach.’
“At Unilever we have a three-part saying. We believe the brands with purpose grow; that at companies with purpose growth will last; and that people with purpose thrive. We’re applying this innovation approach to each of those pillars.”
This includes thinking like a start-up to unlock creativity, according to Close. “No one wants to come into a company nowadays and work on something that’s going to take four years to get to market,” he pointed out. “Certainly that was my reality when I joined Unilever a long time ago.”
When, for example, a member of his team wanted to try and open up opportunities with delivery companies, he opted for a quick response, going against the grain of a traditional ‘big business approach’.
"In the past we would have wanted to do a lot of strategic analysis. But this time we said give it a go.” Now, Unilever’s ice cream delivery partnerships are worth hundreds of millions and are ‘embedded in all our ice cream operating companies around the world.’
"We’ve been inspiring our local companies to experiment; to dream big but start small, and then scale fast when they’ve found an idea,” continued Close.
Its Grom gelato business, for example, recently wanted to extend into new categories. “In the past we would have wanted strategies, and papers, and proposals. Actually, we gave them license and within weeks they had a range of jams and biscuits and chocolates for sale in the shelves of their stores. And we learned so much more doing it that way than we ever did doing a lot of the desk work that innovation used to be.”
What’s more, via this approach Close’s team can move innovation through the process about 40% faster, which is a “big difference when you're a seasonal business and you’re locked into a launch day that doesn’t move”.
With this mind-set comes a new attitude to risk. For example, when Close joined Unilever 27 years ago he was trained by some Harvard professors in the innovation development process management approach where you go through four very rigorous stages.
These days, that process slows the brand down. “It’s not appropriate in such a high paced world where data and people crash together to give us the opportunity to go much faster. So we're applying a much more iterative process where teams really experiment to get to an NPD and then they incubate and then they scale.”
Another example is the iconic Magnum brand. For a long time, Magnum believed it ‘was in the business of selling ice cream’. But in the last two years it has innovated around experience to open over 30 global Magnum Pleasure Stores.
It’s also considered alternative diets and released a vegan Magnum which has been a ‘phenomenal global success over the last 18 months’.
Another interesting innovation was a new choice as a face of the brand.
"The Magnum brand really believes a day without pleasure is a day lost. It believes that people should be allowed to enjoy pleasure. It’s been a brand that, for many years, has used celebrities and models and endorsers to talk about that year’s launch," Close explained.
This year the team, inspired by the innovation culture it’s trying to build, changed its approach and worked with the nonagenarian Iris Atfell.
“She's lived her life with those very values about putting pleasure at the centre of her being and, having worked with her this year, we’ve really had the most extraordinary results and we’ve actually reached more of the generation Z consumers we want to talk to using a nonagenarian who really has an interesting story to tell, than we ever did with some of the other great people we worked with.”
‘Innovation can drive purpose; purpose can drive innovation’
Unilever is also innovating to demonstrate it can create value beyond just monetary terms. Unilever's purposeful brands grow almost 70% faster than others, according to Close, and the Unilever stable of brands increasingly think about how they can become a force for good, he explained. That entails making sure each of the brands has clear purpose ‘and has a sense of the impact that it will make – whether that’s on the planet in a positive way or on people in social good’
"We've been on a sustainable sourcing journey for more than 10 years but what we’ve been trying to do is get to a point where those stories really make a difference in our brands.” Of note is the innovative Vanilla for Change scheme, where Wall’s, Save the Children and Symrise are partnering with vanilla farmers with the aim of building a better future for young people in Madagascar.
“We’ve really started to create a culture that drives speed,” concluded Close, “but also that drives empowerment, autonomy and just a much more exciting way of working and that embraces risk in a very different way. And knowing that our purposeful brands grow almost 70% faster than the brands that we define as not yet being there, the idea that you can apply that innovative impulse to deliver the purpose for your brand and unlock creativity is really exciting.”