Unilever

Unilever is one of the oldest and most relevant multinationals in consumer goods. It was created in 1929 by a merger of British soap and Dutch margarine companies. Since that time Unilever has operated affiliates on all continents, with a wide portfolio of products such as edible fats, detergents, convenience foods, personal care products, specialty chemicals, and animal feeds. Referring to its historical origin, not one but two companies—one British (Unilever Limited, plc after 1981) and one Dutch (Unilever N.V.)—lead the multinational group. Although these companies are owned by different sets of shareholders, the boards of directors are identical.

PREDECESSORS

The strongest similarity between the two main Unilever predecessors was their common reliance on the same group of final consumers. The Dutch Margarine Union (consisting of several margarine-producing companies) had its main market since the second half of the nineteenth century in the large industrial towns of Great Britain and the booming German Empire. Lever Brother's main enterprise was the production of soap for the English working-class market.

Whereas the Margarine Union was a strong and prosperous enterprise focused mainly on Europe, Lever Brothers was already a global player. Trading companies and plantations in Africa were part of the company as suppliers of soap for most British dominions and India. Lever Brother's most successful product since the 1880s has been Sunlight Soap, which is an early example of modern brand-marketing methods. The merger of the two companies was especially attractive for Lever Brothers because of the strength of Margarine Union, but Lever Brother's purchase of an African subsidiary (Niger Company) and other ill-advised ventures caused difficul-ties for the company. For the Margarine Union the merger was attractive because of the wide geographical span of Lever Brothers, which surmounted the cramping of European markets after World War I.

THE NEW MULTINATIONAL

The name of the new multinational, Unilever, was created from the two names of its predecessors, Margarine Union and Lever Brothers. At the time of the merger, 1929, the world economic crisis affected consumers of the company's products and therefore Unilever itself. Consequently, Unilever concentrated production at a limited number of facilities and limited its number of brands. Beside the concentration, rationalization of production processes was the main answer to the crisis.

This strategy gave Unilever the ability to influence consumer habits via strong marketing campaigns for its few brands. Especially detergents such as Sunlight Soap, Lux, Persil, and Omo or the margarine Rama were campaigned directly to housewives, creating class-related perception of quality in the middle class. For example, the U.S. affiliate of Unilever spend 25 percent of their total sales on marketing, producing a gain from 2 to 8.5 percent of its share of the U.S. soap market in the early 1930s.

NEW CONSUMER HABITS AFTER WORLD WAR II

After World War II Unilever became influenced by changes in consumer habits, especially the acceptance of new technologies by the middle class. Although convenience foods and frozen products were known on an experimental level before World War II, especially in Germany, where national fish industry had attempted to introduce frozen convenience products, they largely had failed before the 1950s.

Following improvements in freezing and storage technology, Unilever launched new brands and products. Fish fingers, first introduced by the British Unilever affiliate Birdseye at the end of the 1950s and a few years later by the German affiliate Nordsee/Iglo, are a key example for this development. With Captain Birdseye (and its German counterpart Käptín Iglo) some of the best-known marketing campaigns in history were launched to introduce a product in a market segment that heretofore had no brand marketing. There were similar developments in the market segment for washing detergents.

Lever Brothers's historical connection to Africa as a source for the raw materials of production provided Unilever the opportunity to export European middle-class consumer habits and related brands to the developing counties of the continent. Together with its affiliates all over the world Unilever became a major participant in the equalization of consumer preferences, and therefore a promoter of globalization.

OTHER MULTINATIONALS

In the 1970s Unilever ranked twenty-sixth (in sales, twelfth) among the largest world businesses. In contrast to most other leading multinationals, Unilever is based on a wide portfolio of products rather than on one particular area. Its primary products are margarine, frozen foods, soup, tea, meat, washing powder, and plastic packaging, and it still maintains tropical plantations for the production of raw materials or other related businesses.

Although there were attempts to expand into the production of, for example, copy machines or shipping lines, Unilever restructured itself as a multinational whose business is the consumption of everyday products in middle-class households all over the world. As a vertically integrated multinational, Unilever operated in a lot of its field of interests the whole production chain from the production of the raw materials (plantations or fishing fleets) via processing facilities down to wholesale and retail shops were parts of Unilever's activities. Adjusting its brand portfolio to actual middle-class standards has always been an element of Unilever's strategy, and, in turn, this portfolio and its marketing campaigns heavily influenced the standards of the middle class. Especially in Europe and in developing countries, the Unilever brands became a synonym for modern, Western consumer habits and, to a certain degree, for an American way of life, even though the company itself was a mainly European-based multinational.

SEE ALSO Africa, Labor Taxes (Head Taxes); Coffee; Empire, British;Tea.

BIBLIOGRAPHY

Fieldhouse, David Kenneth. Unilever Overseas: The Anatomy of a Multinational, 1895–1965. London: Hoover Institution, 1978.

Jones, Geoffrey. "Control, Performance, and Knowledge Transfers in Large Multinationals: Unilever in the United States, 1945–1980." Business History Review 76, no. 3 (Fall 2002): 435–478.

Reader, William Joseph. Fifty Years of Unilever. London: Heinemann, 1980.

Wilson, Charles. The History of Unilever: A Study in Economic Growth and Social Change. 2 vols. London: Cassell, 1954.

Wilson, Charles. Unilever, 1945–1965: Challenge and Response in the Post-War Industrial Revolution. London: Cassell, 1968.

Ingo Heidbrink