Dr. René Lammers VP R&D Unilever Europe October 30, 2007 Consumer Confidence A downstream user perspective.

Dr. René LammersVP R&D Unilever EuropeOctober 30, 2007

Consumer ConfidenceA downstream user perspective

Unilever is an Anglo-Dutch company

with operations in over 100 countries

We make around 400 brands

covering food, household & personal care products

and are present in half the households on the planet

Our brands are sold in nearly every country

Consumers

Unilever understands consumer behaviour

160 million times a day consumers are buying a Unilever product

Our business depends on our ability to keep trust

Current Context

Drivers of Change

Step change in even in the US due to:

Extreme weather (hurricanes)

Al Gore

Business initiatives (GE, GM, Wal*Mart)

US states pushing the agenda

European initiatives eg cutting GHG by 20% by 2020, targets for biofuels

IPCC finds unequivocal evidence that global warming is due to human activity

Increasing pressure on the world’s resources due to population and economic growth

Environmental degradation - depletion of aquifers, water pollution, desertification

Huge increase in demands from consumers, retailers and governments or business to tackle environmental degradation through:

green labelling

green taxes

carbon reduction/trading

cutting resource use (energy, water) in production and consumption

use of sustainable raw materials

reducing packaging waste

Offering great opportunities to those who take the lead, and big risks to those who don’t

Business Implications

Environmental concerngoes mainstream

Big Themes

Drivers of Change

Pressures from NGOs and society

Retailers are going green and demanding action from suppliers

Employees expect their companies

to do more

New expectations of industry leadership

International institutions and governments are failing to halt environmental degradation

But business is increasingly seen as part of the solution

Respond to increasing demands on business to do more for:

the environment Millennium Development

Goals creating jobs upgrading skills of

employees and suppliers/customers

sustainable and Fair Trade sourcing of agricultural raw materials

effective/transparent human rights policy

… particularly where responses are good for profit too

Work with national governments and international agencies to reach workable agreements on regulations

Celebrate and communicate ethical and environmental successes

Business Implications

Growing demands on business

Big Themes

Drivers of Change

Relative certainties of the cold war have been replaced by the rise of a multi-polar world

Terrorism

scare stories on chemicals

Rich-poor gap

Nuclear proliferation

Migration

Loss of jobs

Middle East unstable

Commodity shocks eg oil

Risk of pandemics eg bird flu

importance of brands as guarantees of quality and safety

Communicate and get credit for environmental and social activities

Opportunity to build reputation for managing a crisis and staying the course

Creating social value with less environmental impact

Business Implications

Pervasive insecurity

Big Themes

• external scan consumer trends 2007

“I care about my world, my society, my environment… I

worry about my safety, security and privacy”

Current Context

• In summary:

– The world is moving and changing

– Business is adapting to change through innovation – we are driven by consumers and under pressure from customers

Consumer Confidence

• Scare stories are undermining consumer trust – Media, some NGOs and politicians fuel chemophobia

• Need to increase and strengthen TRUST through responsible communication to consumers.

• Trust leads to competitiveness – we need the right regulatory framework where innovation is promoted and supported

• Consumer confidence is the engine of our business

FMCG: driver for sustainable solutions

• We respond to consumer demands with our brands and more sustainable products (formulations, packaging…)

• As downstream users, we also stimulate innovation upstream

• As part of the chemical industry we should be seen as a provider of sustainable solutions – but we need to move even quicker!

• Innovation is central to enhance competitiveness – we also need regulatory support in providing public/consumer/customer confidence

Feeling Safe

• Need positive legislative framework to motivate and protect trendsetters against unfair competition from free-riders

• But if consumers will be safe they also need to FEEL safe

• Regulators need to support us in creating a framework where chemophobia is reduced, innovation opportunities strengthened and where relevant communication to consumers based on risk and not hazard is promoted

Examples

• Nanotechnology : what if consumer resistance will lead us to not using this tremendous potential?

– business has a key role to play to ensure human and environmental safety

– regulators need to create the framework (legislative and political) to ensure the potential thrives

– need full stakeholder engagement in a public debate

Small examples bringing big benefits

Large Bottles (3L)100-120 ml dose/wash

Smaller Bottles (~1L)30-35 ml dose/washAt the same cost/wash

Environmental Benefits Environmental Benefits

Reduced amount of trucks ………………………..350 (Fuel savings)

Reduced packaging ………………………………..40-60% less plastic“Reduction” in number of bottles ……………….8,5 Million (2712 km)

Reduction of liquid volume sold …………………17.5 Million Litre

Reduction in water usage………………………….50-60%

Less detergent in the environment ……………..17,500 tons

Carton weight reduction…………………………..2512 tons

Reduced garbage trucks…………………………..200

In Europe

Feeling Safe?

• Need to ensure consumer acceptance of innovation.

• These formulations will possibly have severe GHS labels because of concentration

Will this enhance consumer confidence or communicate the environmental benefit?

Consumer Confidence?

consumer relevant information is critical

Beyond Europe

• We fully support initiatives that aim at improving the sustainability of European businesses.

• But as a global company, we want regulations to be consistent at a global level

• Global consistency is critical for competitiveness– to operate globally as a business

– all our consumers should have similar levels of protection

In Summary

• The world is changing fast

• As a FMCG we must adapt quickly

• Need innovation support upstream and partnering with regulators to reach common goals

• Must build on current initiatives to enhance consumer confidence