Unilever criticised for focus on sustainability and brand purpose

By our News Team | 2022

Prominent fund manager believes the focus is excessive and a factor in Unilever’s poor business performance last year.

‘Sustainability’ and ‘brand purpose’ have become buzzwords among top marketers, senior executives and big-company boards. But when is it overkill?

This is a question being asked in the UK marketing and business community after a prominent fund manager, Fundsmith Equity Fund, criticised FMCG giant Unilever by calling its focus on sustainability and brand purpose “ludicrous”.

Terry Smith, the founder of Fundsmith, said in a recent letter to investors that Unilever’s poor business performance last year was down to an over-emphasis on these factors. 

Unilever – which has iconic global brands such as Knorr, Dove, Axe, Lipton, Joko and Vaseline in its stable – was the fund’s second worst performer over the period.

“Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business,” Smith wrote.

Brand Purpose

Photo by Akil Mazumder from Pexels

‘Ludicrous’ examples illustrate the problem

“The most obvious manifestation of this is the public spat it has become embroiled in over the refusal to supply Ben & Jerry’s ice cream in the [Israeli-controlled] West Bank. However, we think there are far more ludicrous examples which illustrate the problem.

“A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot. The Hellmann’s brand has existed since 1913, so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches).”

According to the industry publication Marketing Week, Unilever has been on a mission to put purpose at the heart of all its brands since 2018, after finding that its purpose-driven brands were growing at a faster rate. The company’s 28 ‘Sustainable Living’ brands grew 69% faster than the rest of the business, up from 46% in 2017, and delivered 75% of Unilever’s overall growth that year.

As a result, CEO Alan Jope committed to furthering Unilever’s purpose credentials, saying at the time: “We believe the evidence is clear and compelling that brands with purpose grow. In fact, we believe this so strongly that we are prepared to commit that in the future, every Unilever brand will be a brand with purpose.”

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.