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FUTURE OF BUSINESS: Continental Case Study

Unilever has, from its origins, been a purpose-driven company. Today our purpose is simple but clear - to make sustainable living commonplace. We are living in a world where temperatures are rising, water shortages are more frequent, food supplies are at risk to be increasingly scarce and the gap between rich and poor increasing. Populations are growing fast, making basic hygiene and sanitation even more of a challenge. At Unilever we can see how people around the world are already affected by these changes. And the changes will pose new challenges for us too, as commodity costs fluctuate, markets become unstable and raw materials harder to source. We believe that business must be part of the solution. But to be so, business will have to change; there is no ‘business as usual’ anymore. Sustainable, equitable growth is the only acceptable business model. Our vision is to grow our business, whilst reducing our environmental footprint and increasing our positive social impact. In 2010 we launched the Unilever Sustainable Living Plan, which is our blueprint for sustainable business. We will achieve our vision through our Plan, which is helping us to decouple our growth from our environmental impact while increasing our positive social impact, driving profitable growth for our brands, saving costs and fueling innovation. The Plan sets stretching targets across our business and our full product lifecycle, including how we source raw materials through to how consumers use our brands. The scale of our ambition means that we are finding new ways to partner with others in business, government and society to achieve change.

CONTINENTAL From its beginnings in soups and stocks, the Continental brand now includes a wide range of products and flavours. For the past 50 years Continental brand products have evolved with modern food trends constantly pursuing new and exciting food ideas. Now Continental includes a variety of products including Cup a Soup, Simmer Soups, Stocks, Pasta & Sauces, Rices and recipe bases. The industry is influenced greatly by trends in cooking. In particular, as women moved into the workplace, pre-packaged foods that made preparation quicker and easier became popular. However, since 2010 sustainability has become a major trend which has led many to move towards ‘from scratch’ cooking. Continental’s current biggest customer base are: Juggling providers who try new food products and personalise their dishes but because they are so busy, look for quick and easy dishes that free up time for other things. It’s important to them that their children eat healthily. There is less of a focus on taking care of themselves.

The current challenge is to attract long term customers who are: Striving Inspiration Seekers who are an experimental, food-loving group, they like to cook from scratch and get creative with what they prepare. However, they are also time-pressed and struggle to find the time to prepare food. They do tend to plan their meals and like products that make their cooking efficient and make up for lack of skills Creative Food Explorers who really enjoy cooking, cook from scratch and enjoy spending time on preparing their food. They are experimental, like to try out new foods and get creative with their dishes. They have healthy lifestyles and exercise, choose food that is free from preservatives, but being diet/low calorie is not important to them It has also been the goal to do more to increase the millennial customer base.

Sustainability Continental stands for Flavour to Feel Good About. Currently 86% of Continental’s agricultural ingredients are sourced sustainably and it is Continental’s belief that “food grown responsibly simply tastes better”. The endeavour to grow and innovate in this space through the Sustainable Living Plan, which has four pillars: 1. Sustainable Food Sourcing The aim is for all agricultural food ingredients to be sourced sustainably by 2020. Currently more than 92% of the herbs, spices, vegetables, fruits, and grains used for Continental products in Australia are sustainably sourced. The major way that Continental has been driving this pillar is through the Continental Sustainability Partnership which works with Australian and New Zealand farmers to develop ideas and fast-track the implementation of sustainable farming practices.

2. Waste and Landfill Reduction The target is to reduce the waste to landfill ratio to 50% by 2020 by reducing, reusing, improving and recycling from farming to the consumer. Continental (alongside Streets) partners with the REDcycle program. This program involves recycling the soft plastics used in packaging, which consumers can put in bins at both Woolworths and Coles, to make outdoor furniture and signage. This initiative has helped Unilever to obtain the Australian Packaging Covenant Organisation Award for three years running. 3. Greenhouse Gases Continental aims to reduce all greenhouse gases by 50% in 2020. This is being achieved in conjunction with the Unilever Sustainable Living Plan which involves a bold new ambition to be carbon positive in their operations by 2030. 4. Food Nutrition By 2020 Continental aims to double the proportion of products that meet the highest nutritional standards based on globally recognised guidelines. This includes significantly reducing salt, fat and sugar amounts in products and removing trans fats. In 2018 all of the Continental products will have the Health Star rating signage , a part of an initiative to provide transparent, meaningful, nutritional information.

The Continental Sustainability Partnership This partnership is all about creating a closer relationship with farmers to generate collaboration on how to improve knowledge, equipment and practices in sustainable farming so that they are ‘farming for the future’. Currently, the farmers in the project have saved millions of litres of irrigation water.. There are many other projects including devising natural methods to deal with insects and reduce the levels of pesticides used. The Landmark Farmers are pioneers of sustainable farming, there are 30 in total globally. They go beyond the basics to chase more innovative sustainable methods and are an inspiration to other growers as they look to find new ways to care for the land and improve flavour. They are innovators like the pumpkin farmers in New Zealand and the Tomato farmers in Australia. Bruce Weeks Tomato Farm, Victoria Bruce Weeks’ farm has been producing tomatoes for thirty years and is a prime example of a Landmark farm in the Sustainability Partnership which is at the fore front of innovation. Sustainability is of importance to the Weeks’ farm for multiple reasons. It helps them to be reactive and prepared for unpredictable weather. Being able to farm for the next generations is also important as Bruce will one day pass his farm to his son and nephew. Every year, 70% of the world’s surface water is used in farm irrigation. The tomato farms of Victoria are trying to reduce this by using meters to measure the amount of water and oxygen in the soil, so only the exact amount of water required is used. They have also implemented drip irrigation, a process developed in the Israeli desert, to get the best use from every drop of water. The amount of water used also has the ability to change the taste of the produce and all tomatoes aren’t watered a week before harvesting which makes them sweeter. The sustainability practices has helped to both reduce water usage by 25% and to produce tastier tomatoes. THE ASSIGNMENT Building on Continental’s current sustainability initiatives, develop a Continental Sustainable Business Strategy which focuses on driving long term commercial/financial benefits for the Continental business at the same time as increasing positive social impact and decreasing environmental impact i.e. build a plan that drives both sales and profit for the business with sustainability at the heart of the plan. You may choose to focus on 1 big idea and delve deeply into that idea or you may choose a number of ideas/initiatives and be a bit broader. Both approaches are fine. The key to your presentation will be to show the business that by putting sustainability at the heart of the business strategy, we can drive more sales, reduce the cost of doing business, reduce risks across our value chain and ultimately build deeper connections with our consumers. Think about the following when planning your assignment: • How do your ideas fit into the 2 major pillars of Reducing the Environmental Impact & Enhancing Livelihoods? (See Unilever’s Sustainable Living Plan for further details and definitions – https://www.unilever.com.au/sustainable-living/) •

The total supply chain i.e. the chain of events that occur to get Continental to the table of the Australian consumers (and then what happens after the consumers finishes with the packet). Supply chain involves (but not limited to) areas like packaging, factories, transport and places of distribution like Woolworths, Coles and Independent Grocers.

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How do we get our sustainability message out there to consumers through marketing, advertising and public relations in a credible and engaging way? How can we improve on what we have done in the past and/or how can we build on it? How can we use this message to attract our desired future consumer?

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How can we share the story of Continental Sustainability?

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How do we ensure our key stakeholders are engaged in our sustainability agenda i.e. how do you take people along the Continental sustainability journey and convince them of the importance? What’s in it for them? Some of our key stakeholders may include (but not limited to) employees who work at Unilever, customers like Woolworths or Coles, consumers who buy our products etc.

Remember the key is to make sure your Continental Sustainable Business Strategy is linked to commercials of the business i.e. drive sales (sell more product) and drive profit (i.e. take cost out of the business).

Good Luck

The Continental Team...