Research and Development
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Unilever is strongly focused on research and development (R&D). The groups strategy of product innovation is supported by a strong emphasis on research and development. The group has six central research and development laboratories (three in Europe, one in the US and two in Asia) and various other regional and local technology centers. The group employs more than 6 000 scientists and product developers in Research & Development (R&D) worldwide. In 2006, Unilever spent over E900 million on R&D activities, which is significantly higher than its nearest competitors, Kraft and ConAgra (approximately 1% and 0.5% of their respective revenues). As a result, the group was able to develop several innovations, Amaze Brainfood. Launched in Turkey in December 2006, Amaze Brainfood is the result of four years of development, long-term clinical trials and E40 million of research. The range of lunchbox snacks and milk drinks contains one-third of the nutrients children need daily for brain development. It was developed through collaboration between product development teams and the Unilever Food & Health Research Institute. In the Asia skincare market, Ponds Launched Age Miracle, a breakthrough patented innovation containing a plant extract called CLA (conjugated linoleic acid) which helps reduce signs of ageing and yields exceptional results in Asian complexions. Unilever launched Small & Mighty concentrated liquid detergents, in the US. Small & Mighty is three times more concentrated than regular detergents. During 2007, Small & Mighty will be rolled out across Europe.
here is no doubt that the most significant growth opportunities for Unilever lie in the developing and emerging (D&E) economies including China and India. Already, D&E markets account for more than 40% of Unilevers turnover and that proportion is set to go on rising. In 2006 Unilever grew by nearly 8% in D&E markets. Unilever has also achieved significant success in the emerging markets of Asia, Africa, Middle East, and Turkey. In 2006, Unilever had nearly 30 subsidiaries located in Asia-Pacific, 27 in Africa, the Middle East and Turkey and another 28 in Latin America. Emerging markets are expected to account for 90% of the worlds population by 2010 and this is expected to drive demand for fast moving consumer goods. Its long-established local roots in these markets give Unilever a competitive advantage.
Driving growth in emerging markets will be important to Unilevers performance over the coming years, as growth from its more mature markets is likely to slow down.