Paul Polman is hungry for change. As chief executive of Unilever, he has already shaken up the Dove soap, Hellmann’s mayonnaise and Sunsilk shampoo maker, pushing deeper into emerging markets while European shoppers count the pennies.
But away from the improved returns that have led from the grocery giant’s bumper €50bn (£43bn) of annual sales, the rangy Dutchman has earned a reputation for pursuing a different kind of profit. Catering for the sophisticated desires of the developed world in sauces, ice-cream and washing powder is one thing, but Mr Polman wants capitalism to tear up its old model in order to feed the world.
He gets his chance today. Unilever’s imposing Art Deco headquarters on the Embankment in London is playing host to the Nutrition for Growth summit designed to address the blight of world malnutrition. Ten days before the G8 meeting takes place in Northern Ireland, David Cameron will be there alongside heads of government from Uganda, Tanzania and Malawi, chief executives, scientists and philanthropists such as Jamie Cooper-Hohn. They will compare notes on schemes that have stemmed from similar past gatherings, at Davos and the United Nations. Mr Polman, who has led Unilever for the last four years and regularly finds himself in the thick of these sorts of gatherings, does not want talking without more action – and money committed.
“We don’t need more commitments on these projects,” he said, between sips of Lipton green tea. “We need to see if we can go faster, to scale it faster.” For once, the world’s food crisis will eclipse the after-effects of the financial crisis in leaders’ minds.
“We have pumped more money into this world since the crisis of 2008 than we know what to do with, and it hasn’t given us much growth,” said Mr Polman, speaking in a relentless flow. “The question-mark is where all of that money is. If we could just redeploy some of that to the right things.”
He estimates that $80bn ($52bn) invested every year would solve food security in this world, redressing the balance between one billion people who go to bed hungry and consume perhaps 1 per cent of the world’s resources, and the well-fed one billion who gorge on a 72 per cent slice of the pie. A more shocking statistic emerged from a study this week in The Lancet that said malnutrition claims the lives of 3.1 million under-fives each year, 800,000 more than earlier estimates and almost half of all child deaths.
“It doesn’t take much to help these people get a better life compared to the billions that we are spending somewhere else. We have spent more – and I’m not saying if that is wrong or not – bailing out Greece or Portugal. It is not a trade-off, not an either-or, but just put it in perspective.”
They could be interpreted as just more warm words from the executive suite if Mr Polman’s track record at the £76bn groceries group didn’t speak for itself. Unilever’s Sustainable Living Plan put corporate social responsibility – too often a take-it-or-leave-it strategy – at the heart of his soap-to-spreads business. When he first unveiled the plan there was a sharp intake of breath, especially as he had already scrapped annual stock market guidance of future profits, an unusual step. Halving its carbon footprint and helping the hygiene habits of one billion looked a tall order at the same time as winning market share and doubling sales for a company that had long ago lost the habit of growing revenues. Everyone else in Unilever’s supply chain was asked to improve their performance too.
“For the first time I think we are close to lifting it out of a side project into a holistic business model,” Mr Polman said. “It is not easy: I knew that from day one, and it is risky, because there are cynics out there, and I always say cynicism is the lowest form of taking responsibility.”
But Mr Polman has succeeded in pulling off a balancing act by improving performance and reducing waste. So much so that on the day we meet, Procter & Gamble, the Pampers-to-Pantene consumer goods giant which long outperformed Unilever, had just reinstalled AG Lafley as chief executive to address stuttering growth. However, Mr Polman is under no illusion that without success on one side of the equation he wouldn’t have the licence to pursue the other.
“If I don’t have the business results the guns will come out very quickly.”
So, among such innovations as waterless shampoo and eco-friendly one-rinse fabric softeners came the more commonsense commercial plan to start selling more ice-cream in the equatorial countries – where the sunshine shines more often than in rainy Europe. Investing in innovation and pushing into new markets has speeded up.
“We can solve our own issues, but at the same time we want to increasingly be using our company to be responsibly providing solutions that go a little bit broader.”
Today, those solutions form two prongs. Scaling up Nutrition, a United Nations-led initiative run by David Nabarro, aims to tackle high levels of hunger. Some 36 governments have signed up, but Mr Polman needs more companies to follow his lead by adding nutrients to their goods, such as the extra iodine and iron quietly supplemented to Unilever’s Knorr bouillon cubes. The aim is to help malnourished youngsters, especially the 170 million children affected by stunting, which itself acts as a curb on a nation’s economic growth prospects.
The second part is about helping Africa to create sustainable food systems so it can produce enough for itself and to export. It grew out of a World Economic Forum event and led to last year’s G8 commitment to the New Alliance for Food Security and Nutrition. Here, Mr Polman’s example is in Kenya or Tanzania, where families of over 100,000 people already depend on Unilever for their livelihoods.
“So can we double our tea capacity, for example in Tanzania can we produce another 30,000 or 40,000 tonnes of tea? That’s 15,000 people or 60,000 dependants. How can we train all those smallhold farmers, how can we can get sustainable practices in soil management, water management and infrastructure to be competitive, for the port to be upgraded efficiently, land to be set aside – the whole ecosystem?”
Something similar is afoot in Nigeria, where cassava used for sorbitol in toothpaste is farmed. Mr Polman’s message is that Unilever can’t do it alone, but nor can Oxfam, the Rainforest Alliance or the World Bank.
“How do you feed the world when there is another one or two billion coming into the world and when many are changing their eating habits? In the next 40 to 50 years we need to produce as much food as the last 8,000 years, and people don’t realise that.”
Mr Polman said the financial collapse gave pause for thought about capitalism’s relationship with consumers. “Despite people calling it the banking crisis it was also a moral reflection,” he said.
Everything that has followed since – the Arab Spring, Occupy Wall Street, the misfiring Bretton Woods monetary system, society’s digitisation allowing for global conversations to undermine the status quo – has pointed to the need to reinvent the model of money-making and corporate trust. The urgency to act has been sharpened by climate change leading to big fluctuations in food prices and speculators profiteering.
With Nestlé’s chairman, Peter Brabeck-Letmathe, Mr Polman has been pressing David Cameron to end the use of biofuels made from food crops, claiming that many varieties are worse for climate change than the fossil fuels they were created to replace. He has also called for a halt to illegal deforestation driven by the need for raw materials such as palm oil.
Are other big businesses buying in? He’d like to think so.
“I believe inherently in the goodness of people, and if you see how many volunteers are out there and in our company as well, there are many Paul Polmans and much more heroic. You just have to be sure that you create a better world for all, and that requires you to not just be fixed on work alone. You need your oxygen, and where do get it from?”
Let’s see if today’s high-level gathering breathes more life into a life-or-death debate.
Polman’s plan: A push into emerging markets
Emerging markets are playing an increasing role for Unilever as Paul Polman strives to double group turnover to €80bn (£68bn).
A colonial past for the company gave it a ready footprint in India and Indonesia.
Mr Polman has pushed further by taking established brands around the world to offset slower growth in North America and Europe.
There have also been acquisitions since he assumed control four years ago as Mr Polman aims to make a success of fewer, bigger brands. TRESemmé shampoo, acquired as part of a £2.3bn deal in 2010, has been a hit in Brazil. Unilever also confounded critics by enjoying a hit with Magnum ice-cream bars in the US and recently paid £3.5bn to up its stake in its Indian offshoot.
As a young man, father-of-three Mr Polman, 56, toyed with the idea of becoming a priest or a doctor, and studied in a Carmelite seminary. In the end, he has devoted himself to working in consumer goods: for many years at Procter & Gamble, before becoming finance director of rival Nestlé and eventually arriving as the first outsider to lead Unilever.Reuse content