The poor wish to engage in the market, as buyers and sellers, says Antony Burgmans. With help from business, they can do so

Unilever, which I chair, is a company that touches people’s lives. This may sound a little disingenuous from a businessman, but let me explain why our long-term business success is intimately connected with the vitality of the communities and the environment in which we operate.

Unilever makes food, home and personal care products. Our brands include Dove, Sunsilk, Lipton, Knorr and ice-creams such as Magnum. Every day 150 million people in more than 150 countries choose our products. They do so because they want to feel good daily, achieve more, look better, live longer and healthier, and want to give their children a good start in life. We have translated this daily quest for vitality in our new mission: “Unilever’s mission is to add vitality to life. We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life.” This mission gives us a clear direction for the future. It focuses on new consumer opportunities to grow our brands and our business. But how does this mission help our company to address the needs of the poor in developing and emerging countries?

A wider mission
Unilever’s operations help to create wealth and generate employment for local people. They bring the strength of an international business to local economies. Unilever is deeply rooted in the communities where it does business. Around the world we contribute to charities and work in partnership with non-profit organizations, focusing on meeting local needs and aiming to use our skills to make a real difference. In 2003, we committed €66 million (then about $75 million) to community schemes, equivalent to 1.5% of pre-tax profits. Some 42,000 of our employees – nearly one in five – were involved in community activities with company support and encouragement.

Companies are not just about making profits for shareholders, they are also about contributing to society at large. Companies that do both are more likely to win people’s trust – and they are in turn more likely to choose the brands of a company that contributes to social wellbeing. Consumers are increasingly bringing their opinions as citizens into their buying decisions, demanding more from the companies behind the brands. They want companies and brands they can trust. Unilever embraces these new expectations. Our heritage of good governance, product quality and long experience of working with communities gives us a strong base as we strive to be both a successful business and a responsible corporate citizen.

We operate at a pivotal point in the supply chain between suppliers, on whom we depend for our raw materials, and consumers whose everyday needs and aspirations we seek to meet. The environment provides us with our raw materials and the ingredients we need to make our products. Thriving communities provide us with a healthy, growing consumer base.

People all over the world aspire to improve the quality of their lives and gain access to basic consumer goods. Consumers in Europe or America can easily buy our products. They can afford to purchase a big bottle of shampoo that will be sufficient for a month or more. However, it is different for a consumer in rural India, Africa or Latin America. There, the price of such a bottle can be the equivalent of a week’s salary. But people like using high-quality innovative products on special occasions – when feeling good and looking good are important – a wedding, for example. For these consumers we have developed small sachets at affordable prices. They contain the same high-quality branded product but in smaller quantities. This approach has put our products within reach of the poorest customers.

Unilever believes that one of the best and most sustainable ways it can help to address global social and environmental concerns is by doing business in a socially aware and responsible manner. Much can be achieved by industry through company efforts, but substantial progress on the global challenges that face us will only be made if business, government and stakeholders work together. We are committed to dialogue and partnerships as we know we do not always get it right and that, often, a multi-stakeholder approach is needed to solve a problem.

Salt of the earth
Iodine deficiency is the most common cause of preventable mental retardation in young children. There are still 48 countries where less than half of the population uses iodized salt and 41 million babies in the developing world are being born every year unprotected from iodine deficiency and its lifelong consequences.

Working closely with UNICEF (the UN body that seeks to improve the lives of the world’s children), Unilever in Ghana has launched a brand of salt fortified with iodine called Annapurna. The salt is made available in 200g sachets to make it affordable for the country’s poorest families. Following its success in Ghana, we introduced it in Nigeria, Africa’s largest salt market, in 2003.

In India our subsidiary, Hindustan Lever, is taking part in an innovative scheme to train villagers in business skills and, at the same time, creating a new sales mechanism for its products.

In recent years non-governmental organizations (NGOs) and government bodies have been working together to establish self-help groups for women in Indian villages. These can have a huge impact on alleviating rural poverty, with the help of microcredit, by enabling women to become entrepreneurs and bringing much-needed income to villagers. This has a knock-on effect for children by allowing families to keep more children in schooling for longer.

Success for the groups, however, depends not only on access to this small-scale funding, but on finding viable and sustainable business opportunities. These are few and far between in many parts of rural India.

Helping the poor to help themselves
Project Shakti (“strength”) connects self-help groups with business opportunities. Hindustan Lever offers the groups the chance to become local, small-scale sellers of the company’s products. The groups, typically of 15 to 20 people, buy a small stock of items such as Lifebuoy soap, Wheel detergent or Clinic shampoo, which are then sold directly to consumers in their homes.

Working in conjunction with the local district authorities, Project Shakti was piloted in 2002 in 50 villages in the state of Andhra Pradesh, and has since been extended to other states, creating more than 9,000 entrepreneurs. Hindustan Lever provides free training on the basics of business management to the groups, whether they choose to become Hindustan Lever distributors or to set up other types of small enterprise. The company also offers continuing “on the job” training once the business is running.

Many of the women have little or no education and no experience of running a business, so such support is an essential component in enabling the business to succeed. Most of the women who have chosen to become rural sellers of Hindustan Lever products have managed to create a sustainable micro-enterprise for themselves. They are generating a steady monthly income of approximately Re1,000 (about $22), almost doubling their household incomes. This helps to improve family health, hygiene and living standards, including education for their children.

Project Shakti works in partnership with NGOs and local schoolteachers to provide educational resources for children through libraries and computer kiosks. There will be 3,500 kiosks installed across rural south India by 2005, making information accessible to 14 million people.

I believe that companies, doing business in a responsible and sustainable way, can help raise the quality of life and standards of living in some of the poorest parts of the world. I hope that if we take pride in our aspirations and achievements, society around us will recognize our contribution and deem our pride to be justified.

Antony Burgmans
Antony Burgmans is chairman of Unilever NV.