How Unilever Is ‘Making Taste, Not Waste’

Since Hanneke Faber joined London-based consumer goods giant Unilever as president of foods and refreshments in 2019, the company has experienced a deadly pandemic, a collapse in its foodservice business and a revolution in how consumers want to eat. Despite all of this, Faber has grown the $22.6 billion foods and refreshments division: In the first half of 2021, the unit reported $10.2 billion in sales, an 8.1% increase from 2020. Progressive Grocer talked to Faber about her company’s plan to keep growing revenue while halving its environmental impact, and why algae is the next alternative protein trend.

Progressive Grocer: Hanneke, you spent most of your earlier career at Procter & Gamble working in the beauty business. How did you fall in love with food?

Hanneke Faber: After about 20 years with Procter & Gamble, I switched to retail, grocery retail. I headed up the e-commerce business for Ahold Delhaize, and that’s where my love of the food and the grocery business ignited. And then, when I had the chance to join Unilever, first as president in Europe, but then as president of our foods and refreshments division, I was just delighted to continue in the business of food. I think food is super sexy. I used to think beauty was the sexiest business, but it’s food. You look on Instagram and there’s more than 200 million pictures a day of what people eat. But it’s also so important for the world today. People want to eat healthier. We all know that the food system has a big impact on climate and on the health of the planet. So food is fun, it’s sexy but it’s also really important for the health of people and the health of the planet.

PG: You became president of foods and refreshments at Unilever in 2019, just a few months before the pandemic.

HF: I don't think any of us will forget March 2020 any time soon. At Unilever, we’re very much about “people first,” so we had to make sure we protected our people. Of course, the office people immediately went to work from home, but the people on the front lines were the people in the supply chain, so we had to protect them while still making sure they could come to work. I’m super proud of our people in our factories, because they are truly feeding the world. We have factories in more than 100 countries, and if we don’t make food, there is no food, so it really is critical front-line work, and I’m so proud of those teams.

PG: How did you pivot when the restaurant and foodservice business crashed?

HF: So 40% of our food business is with restaurants. That went to almost zero, and the grocery stores went crazy. And over time, that has corrected and now in most places, the service channel is at least partly back, but we’ve had to be agile over time. People have had to be agile: The people that were selling to restaurants all of a sudden had to help and chip in in the grocery business, and vice versa when restaurants came back online. The flexibility of our people has just been amazing. And although physically we’ve been further apart, I think as a team we’ve actually become so much closer by going through this experience together, and I’m super proud that our results have been really strong throughout the pandemic.

PG: Are things back to normal?

HF: Well, in some places, yes; in other places no. Most places with really high vaccination rates have been able to open back up almost normally, so China has been normal for quite a while, and I’m hopeful that many other places, as vaccination rates rise, will also be able to return to normal relatively soon.

PG: Can you talk about Unilever’s vision for the future of food?

HF: Our ambition is to be a world-class force for good in food, and as part of that, we’ve made a number of bold commitments. We’ve set a global sales target of 1 billion euros in plant-based meat and dairy alternatives. We’ve committed that we’re going to halve the food waste in our direct operations. We’ve committed that we’ll double the number of products that deliver positive nutrition, and that we’ll continue to reduce salts, sugar and calories in our products. And we have committed to more regenerative agriculture, which is a complicated topic, but critically important for the planet. And then across our foods, beauty and homecare businesses, we also have a set of commitments that include net zero by 2039, deforestation-free by 2023, and also less plastic with a set of commitments.

PG: I know that nature-positive production is a big part of Unilever’s regenerative agriculture plan. Can you explain what it is and how Unilever is going to leverage that?

HF: Nature-positive production is basically doing agriculture in ways that use less water, that have less CO2 outputs, and that create healthier soil and more biodiversity. How you do that depends on the crop, what are you growing, the place that you’re doing it and who you're working with. For example: soybeans in the United States, specifically in Iowa. Soybeans are a really important ingredient for Hellmann’s Real Mayonnaise, but soybean farming traditionally is very automated. It uses a lot of heavy machines, heavy tractors that compact the soil and are therefore very bad for soil health, because there’s erosion and water just rolls away. And the more you do that, the worse the soil becomes and the worse the harvests become.

So, in Iowa, we started working with around 30 farmers in 2017 to see if we could work together in ways that would actually protect the soil and regenerate it; the way you do that is through cover crops in the off-season. When you’re not growing soybeans, you plant another crop to keep the soil healthy, rather than just letting it sit there. And farmers know that works, but it costs money to plant another crop, so we co-invested with them and with our soybean supplier. Today, we have 361 farmers in Iowa in this program, because it makes the soil better. That represents 10% of all of Iowa’s cover crop acres, and the farmers are super happy. We get better quality soybeans, they get better yields, they protect their soil, and all in all, I feel better about eating a lot of Hellmann’s mayonnaise.

PG: I know that Unilever is doing a lot to leverage consumer health and wellness trends. How are you helping people adopt healthier diets?

HF: Plant-based is a big focus for us, and we’re really excited about the progress in plant-based ice cream. We’re growing Ben and Jerry’s dairy-free segment really fast, and Magnum Vegan, Cornetto Vegan. Those global brands are really accelerating their dairy-free and vegan offerings, and that’s important. We’re also excited about the progress of The Vegetarian Butcher, which is a brand we bought in Holland in 2019 and we’ve since expanded into 40 countries. It’s the burger and chicken of choice for Burger King in Europe, China and Latin America.

PG: Is the plant-based focus also related to a consumer desire to heal the planet?

HF: The general trend is certainly health, and I think that’s one of the effects of the pandemic, for sure. But within that, plant-based is a big subtrend, and that’s partly because people think it’s healthier for themselves to eat less meat, but also because they realize it’s better for the planet. Today most plant-based options leverage peas or soybeans. In the future, we’ve made some partnerships with some smaller companies to look at algae. There’s a company called Algenuity that does algae, and we’re starting to formulate with that as an alternative protein. And we’ve also partnered with a small company called ENOUGH that does a mushroom-based alternative protein. I think you’ll see more alternative protein sources in products that you know and love, to give you the protein that you need, but in ways that don’t necessarily need cows.

PG: What are your other sustainability priorities?

HF: In addition to plant-based, another is food waste, reducing it in our own operations, but also inspiring consumers. We call that “Making Taste, Not Waste.” That’s the Hellmann’s global brand campaign that’s helping consumers to rethink when they look at the fridge and think, “Oh, my God, I have nothing to eat.” With mayonnaise, every leftover is better, so hopefully we can make change that way. And the other trend is, of course, digital, the “Give it to me now” consumer. Three years ago, we didn’t have any business of half-hour or 10-minute ice cream delivery, and now we have a business that’s several hundred millions of euros, because at 9 p.m. on your couch, it’s always summer, and it’s really great that consumers can just go to Gopuff or Uber Eats and get Ben and Jerry’s.

PG: Speaking of digital, what are your key initiatives related to digital or technology in foods and refreshments?

HF: Certainly, working with all of our instant-delivery partners, a program we call Ice Cream Now, on allowing people to get ice cream now. So that’s at the very end of the chain, but at the very beginning of the chain, we’re increasingly automating our factories, and that’s important as well. I think we’ve placed 4,000 robots over the last three years in our factories. As we automate our plants, we get more precise and we actually waste less food. The same is true for artificial intelligence in our planning systems, so that we don’t produce food that we never sell, but we produce all the food that our customers need. We’re also trying to make it easier for our retail and foodservice customers to have 24/7 digital service from us.

PG: A lot of your customers are hurting right now due to supply chain bottlenecks. How is Unilever managing those challenges?

HF: In many countries right now, we’re focused on just delivering our products to retailers on time and in full as much as possible, and I say “as much as possible,” because in many countries, the labor supply is out of whack. In the United States, the difficulty with trucking and with transport has been tricky, but we’re working as hard as we can. And longer-term, I think what’s important is to work with retailers on the future foods commitments that I started with. We want to work with retailers to reduce food waste; we want to work with retailers to drive plant-based and healthier eating; we want to work with retailers to digitize our collaboration so that we can serve them better. So, despite the short-term logistics challenges, these long-term opportunities are critically important.