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Unilever Foodsolutions

Spreading the love of sandwiches in the UK

independent foodservice market

The sandwich is the nation’s favourite lunchtime snack.

Most of the 2.6 billion sold last year were bought pre-

packaged from supermarkets, although half of us would

prefer our sandwiches made up fresh, and some would pay

more for it. High-street chains such as Subway are doing

well preparing sandwiches to order, but more of this

valuable and growing UK market is served through small

independent operators who specialise in personal service to

a regular customer base. This makes it a tantalisingly hard

segment for even the most efficient marketer to reach. Can

Unilever Foodsolutions develop a marketing strategy for

this sector that will revive growth for Hellmann’s and

Flora, its key brands in the spreads and dressings business?

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Introduction Clare Logan, Marketing Manager for spreads and dressings at Unilever Foodsolutions UK

looked at her meeting planner and sighed. She knew that in just under a month she would have to

present some convincing ideas to her marketing director in response to two challenging growth

objectives for her most important brands. The “jobs to be done” in the next year were to:

Increase the market penetration of Flora, encouraging foodservice operators to choose

the brand and switch from butter and other cheaper alternatives.

Increase the usage of Unilever dressings, but especially Hellmann’s, by encouraging

operators to use more of it in more situations.

Clare knew that times were tough, that the UK was entering the third year of a deep economic

recession; and yet despite this, her bosses were asking for growth in sales and profits when every

caterer out there was trying desperately to cut costs in order to pass on savings to their

consumers just to keep them loyal. Of course Clare’s brands were extremely well known, the

quality second to none, and in a retail setting they had plenty to say, with very clear positioning

and a strong advertising and promotion spend. In foodservice though, yellow spreads and

dressings are often little more than components in someone else’ products. Operators buy them

at arm’s length through distributors or in cash and carries, where Flora and Hellmann’s have to

compete far more on price (and where they are twice as expensive as the cheapest alternative).

For the consumers, they are constituents of a meal or snack in which the important distinctions

are focussed on the main ingredient (eg chicken or salmon).

Unilever Foodsolutions: Spreading the love of sandwiches

2

Clare had just three weeks to work out what could motivate more distributors, operators and

consumers to switch to Flora and Hellmann’s in the foodservice market, and then plan how to

make it happen; on her laptop she had a number of recent reports commissioned from external

research companies and she knew she could call on the support of the Foodsolutions Insight

Manager, Emma Wingate, to discuss all this data, and any other recent findings, in order to

develop an insight platform on which to build a winning strategy.

Unilever Group Unilever is one of the world’s leading suppliers of fast moving consumer goods. On any single

day, two billion consumers worldwide use a Unilever brand. In 2009 the company employed

163,000 people, held global brand leadership in 7 categories, sold products in 170 countries, and

spent €891m on research and development. Unilever aims to meet everyday consumer needs for

nutrition, hygiene and personal care with brands and services that help people to feel good, look

good and get more out of life. As a global business, it generates more than half of its turnover in

the developing and emerging markets of Asia, Africa, Central & Eastern Europe and Latin

America from a brand portfolio that includes Knorr, Hellmann’s, Magnum, Persil, Flora, Dove,

and Lynx. Just twenty-five brands generated 73% of the €39.8 billion Unilever revenue in 2009,

of which ten gained global market share during the year.

Unilever is a business focussed on growth in order to build shareholder value, but trading

conditions during the economic downturn have been extremely tough. The effects of low

consumer confidence are clearly seen in Table 1. The first row shows year on year growth in

sales, including price rises where they have been achieved, while the second row excludes these

and therefore describes volume increase. Operating margin includes one-off sales of assets, and

these account for the improvements in 2008 measures, but the underlying trend in both margin

and ROI reflects the tough competitive conditions, and the increasing spends on advertising and

promotion over the entire period. Some growth in sales, margin, and market share were achieved

in 2009 across the world, although performance in Europe was exceptionally difficult. It is a

measure of just how tough the economic environment has been that even this performance has

been enough to move the business from 9th

to 5th

for shareholder returns in their peer group of 21

similar firms.

Table 1. A comparison of Unilever Group Key Performance Indicators.

Year on year measures 2009 2008 2007

Underlying sales growth (%)

3.5

7.4

5.5

Underlying volume growth (%) 2.3 0.1 3.7

Operating margin (%) 12.6 17.7 13.1

Return on invested capital (%) 11.2 15.7 12.7

Source: Unilever Annual Report and Accounts 2009 (p.25)


3

Unilever restructured its business early on in the recession in order to cut costs and improve

efficiencies ahead of the onslaught, and there is no doubt that this has been reflected in this

performance. Paul Polman, CEO, describes the four areas of activity which were targeted across

the entire company, from which the marketing orientation of the management is extremely clear:

Bigger and better innovations, rolled out faster.

More discipline throughout the organisation, to improve customer focus.

A more competitive cost structure, driving out costs that yield no customer value.

Building a performance culture to deliver improvements quickly.

Coming out of 2009, trading conditions have remained hard and in addition, raw material prices

have been rising, but Unilever is ambitious and has sent a clear signal about this. Their corporate

strategy is summarised for their shareholders in the 2009 annual report (p.7) as follows:

“With confidence in our ability to grow, we launched a renewed bold vision for the

company, to double our size while improving our environmental footprint. With our

portfolio of brands, presence in emerging markets and long-standing commitment to

shared value creation, we believe your company is well placed to deliver on this

ambition.”

This is then justified in some detail. Growth will be found both in emerging markets and in the

developed world through the company’s brands and the leadership positions they occupy.

Strategic theory says that it is the role of category leader to grow by expanding markets; by

finding more users, encouraging greater usage, and creating new user benefits. Unilever intends

to do so through innovation that satisfies unmet needs and delivers superior quality. This process

will beat the competition by being bigger, better and faster in order to leverage economies of

scale and efficiencies across its multiple markets. At the same time more acute insight in the

market place will lead to closer customer and consumer relationships. Growth will also be found

in a more flexible supply chain, and in better returns on advertising and promotion, and in global

networks. Finally growth will be achieved with people. The firm intends to equip itself with the

necessary people, skills and capabilities to deliver, by balancing global scale and expertise with

local consumer intimacy.

The company has succeeded in growing sales and profits up to now, even in the teeth of a deep

global recession; it has now set out a very ambitious strategy to drive that growth forward even

faster in each of its divisions and business units throughout the world.

Unilever Foodsolutions Unilever Foodsolutions (UFS) is now one of the world's leading foodservice businesses, and one

of the few able to serve global operators. It markets a portfolio of Unilever branded catering

products in 68 countries worldwide, throughout North America, Latin America, Europe, Africa

& the Middle East and Asia.


4

Like any successful marketing business, its focus is on understanding its consumer and providing

innovative solutions that directly meet their needs. In foodservice this might mean providing

products that add the right seasoning, flavour or texture, or pre-prepared ingredients that save

time in a busy kitchen or new ways of serving food on a large scale with consistent quality. The

global foodservice market is extremely diverse, and so are the needs of its operators, but UFS is

strongly positioned to meet those needs around the world through a wide range of products and

brands in the savoury, dressings, spreads and tea categories, as well as through long experience

and expertise in taste, food and other technologies, new product development and sales &

service.

For example, in the UK the government has been making efforts to reduce the quantity of salt

consumed both in and out of home, and UFS is reformulating its brands to meet the Food

Standards Agency 2010 salt reduction targets, which in turn helps operators to meet those targets

themselves. Independent operators are coming under increasing time pressure and have limited

resources, so brand initiatives of this kind can be extremely useful if they help businesses to meet

regulatory or statutory requirements with little or no expense, as an added benefit of using a

well-known brand.

In the last few years, UFS has consolidated its UK management and sales & marketing operation

into a purpose built site near Leatherhead, Surrey, which incorporates new product development

test kitchens, demonstration suites, offices, training facilities and even a small supermarket. The

UFS UK business vision is “to become famous for growing our customer’s business”, and their

mission statement is:

“To grow our customers’ businesses and revenues by simplifying their operations

through concepts, services and products”

This quite simply puts meeting customer needs and aspirations at the heart of the business,

making UFS far more than just a food manufacturer. The UK business can draw on Unilever

global strengths to fulfil this mission. These strengths include both world-class technology and

world-renowned expertise in consumer insight. The UFS UK business is also working on raising

its industry profile through a number of prestigious sponsorships and awards, such as the Knorr

National Chef of the Year award, and its association with Marco-Pierre White and other celebrity

chefs. These initiatives link the business’s brands and products with excellence, generating

coverage in the trade (and sometimes consumer) press, with the aim of keeping UFS UK and its

brands front of mind for thousands of industry members.

The UK Foodservice Market: Channels Generally speaking restaurant and catering companies operate on low or very low margins:

wages often account for 30% of turnover and fixed costs are high so other costs (supply of raw

materials included) must be negotiated hard. On the one hand, there is a choice of wholesaler to

deliver ingredients, but on the other they are now usually large national companies. The chef or

owner may depend upon a supplier for some materials in order to maintain menu consistency,


5

although often ingredients are nationally available brands in bulk format. A typical restaurant or

deli may have separate firms delivering fresh fruit and vegetables, meat, dairy, frozen foods and

dry goods such as tea, flour and sugar. The largest wholesalers can even deliver ambient, chilled

and frozen goods on a single vehicle, while some caterers visit a cash & carry to collect many of

these goods. Because there are now only a few big companies serving many outlets (Brakes and

3663 have around 50% share between them), suppliers to caterers have high bargaining power

with little pressure on price. Just as in retail, UFS must increasingly compete with cheaper

channel own labels too, supplied by the bigger wholesalers, as well as with other branded

substitutes such as Heinz mayonnaise or Lurpak butter.

Figure 1. UK trade value of foodservice marketing channels.

For UFS UK the channels to market are long and complex due to the diversified nature of the

industry. Both push and pull strategies are therefore necessary, whereby for example price

promotions are used to push brands and products through wholesaler partners towards caterers.

The UFS sales team also visit executive chefs who buy for large national chains to create “pull-

through” by offering menu advice and other marketing support to maintain loyalty to the UFS

brand portfolio, but they can only concentrate on the largest buyers because of limited numbers.

If orders are placed with the UFS sales teams, they may be passed to the channel partners and

products are then physically distributed through a network of distribution centres, satellite

warehouses, company-operated and public storage depots and other facilities. Key catering

accounts such as large hotel groups and restaurant chains often have their own central

distribution (see Appendix 4), but UFS services the independent trade through delivered

wholesalers such as Brake’s and Nila, and cash and carry groups such as Booker. Figure 1 shows

the relative value of the four channels to the UK foodservice market.

Source: Horizons FS Ltd, 2010

Distribution from

manufacturers direct

to multiple operator

depots for onward

distribution

e.g. Palmer Harvey

Mclean - deliveries

to garage

forecourts & retail

foodserv ice

Operators pay cash

on purchase -

Booker largest C&C

in the UK

Wholesalers such as

3663 and Brake’s who

deliver to the operators

UFS works

mostly with:

Total

Foodserv ice

£10.1bn

Delivered

Specialist- Retail

£1.9bn

Contract

DistributionDirect

£1.7bn

Cash &

Carry

£1.1bn

Delivered

Wholesale

£5.4bn


6

The UK Foodservice Market: Consumers There are over 62 million people in the UK, and another 25 million visit each year. Eating out of

home is very big business indeed - 8.3 billion meals served annually at a value of £42 billion.

The food is served from a wide range of outlets covering workplace canteens in the cost sector to

five star hotels in the profit sector, and includes snack bars, coffee shops, fast food restaurants

supermarkets and a wide range of pubs, cafes and bars in between. In fact there are over 258,000

different outlets in the UK, and unlike the retail market, foodservice is not dominated by multiple

operators with high buying power. The average turnover for a catering outlet is only around

£120,000 per year. Appendix 1 shows the split between the different segments in the market,

from which it can be seen that independent operators account for around half of all foodservice

outlets, making them an attractive target. Individually independent turnover may be low, but in

aggregate the margins are good in comparison with the aggressive pricing needed to supply

multiple caterers, and the turnover is sizable.

Nevertheless, in the current economic climate caterers of all kinds are having to fight very hard

for the out of home pound. Household expenditure on eating out has dropped from 11% of

disposable income in 2005, to just 8% in 2009 according to government figures and there is

increased promotional expenditure on loyalty schemes and other discounts, especially by large

national chains such as Pizza Express and Nando’s, to retain customers. On the other hand diners

are becoming more experienced than ever, and are seeking excitement and quality in the out of

home offer, as well as excellent value. But it is also true that consumers look for different things

on different occasions: for example at one moment we may need a treat, something a little

indulgent, and we are prepared to ask for it be made to order. Earlier in the day we might have

been in a tearing rush, but also starving hungry and looking for fuel in a hurry. We know we

should eat more healthily, and yet sometimes this seems a little dull, while at another moment we

might consider a fair trade alternative, even though it costs a little more.

As Clare browsed through the reports she had commissioned on the UK foodservice market and

considered the opportunities to grow her two brands, she looked at the fragmented structure and

tried to identify some promising patterns in the distribution of expenditures. For example, while

the largest channel in terms of outlets was the hotel sector, when she looked at numbers of meals

served she could see that 23% of the total came through quick service restaurants, while the

second highest was pubs with just 12%. But when she looked at the frequency of visits to

different types of outlets, she noticed that although 21% of respondents visited a quick service

restaurant once a month, nearly a third visited a sandwich bar at least once a week. Since

sandwiches are often made with spreads like Flora and dressings like mayonnaise, this was

beginning to look extremely promising! On digging a bit deeper another statistic from a different

report caught her eye. It was a table of the top-selling out-of-home foods and drinks in the UK in

2009. There, right at the top of the list, she found sandwiches, above tea and coffee, above even

chips, pizza and burgers. Sandwiches, the nation’s favourite – frequently bought fresh-made

from a sandwich bar. It was time to find out a bit more, to see if a marketing strategy for growth

could be built around what was beginning to look like a major opportunity.


7

The UK sandwich consumer The UK population is working harder, marrying later, having children later, divorcing more and

getting older. Generally households have been getting richer, but having less time to spend their

money. More women are working, and this has coincided with a steady increase in the number of

meals being eaten out of home over the past thirty years, including meals at work, meals eaten as

a leisure activity and meals for single parents with their children. It is no surprise then that in a

recent survey, the main driver for out of home meals was found to be convenience (I was at work

(29%), I was hungry (19%), I was on a shopping trip (9%)) with a small but increasing interest in

healthy eating also observed. The biggest consumer segment is 17 to 34 year olds, but eating out

is not their sole preserve – older people eat out too, just slightly less often. Venue choices are

segmented by day, with workplace canteens and quick service restaurants a week day lunchtime

favourite, restaurants a weekend treat, and pubs visited mainly on Sundays.

With so much focus on convenience it is clear why the sandwich has become so popular. In 2009

2.6 billion were sold, from many kinds of outlets, although perhaps the most important were

sandwich bar/delis, quick service restaurants, hotels, and pubs and bars. Half of all consumers

said that they would prefer their sandwiches made to order, and nearly a quarter said that they

would pay a bit more for this. Clare’s report suggested that sandwiches had become the world’s

largest and fastest growing menu item. A bit more research could make this picture a little

clearer and might help her to develop the insight platform on which to build her strategic

solutions.

Clare was particularly interested in exactly who was buying sandwiches and what their

motivations and perceptions were of the products and ingredients used. Another specially

commissioned report had a few more answers. Of those who eat sandwiches regularly during the

week there is a skew towards young men, 16-34, motivated primarily by price and freshness

when choosing, with half saying that they prefer to have their sandwiches freshly made. Women

probably choose a salad or another lighter option although the third of the sample made up of

women also ate sandwiches regularly. In terms of spreads and dressings, butter is the most

popular choice (40%) with margarine second (around 20%). A few consumers choose a low fat

spread, but over a quarter claimed to consider the healthy options when picking a sandwich to

buy, and nearly two thirds perceived fat and salt content to be an important factor in this.

Mayonnaise of all types is likely to feature in around 15% of products, probably split half and

half between low fat and regular, and the Hellmann’s brand was rated extremely highly by

respondents, 78% considering it good or very good. When researchers asked questions about the

Unilever brands and their influence on choice, some very encouraging numbers emerged. Many

respondents had been disappointed with their purchases in the past because a poor quality

mayonnaise or spread had spoiled the experience; a slightly higher number (near two thirds) said

they would be prepared to pay a few pence more for a better quality spread and/or mayonnaise.

In addition, many felt that the quality of the ingredients reflected on the quality of the outlet, an

argument that could bear some weight with operators when trying to sell in any new ideas related

to any strategy.


8

In summary, a picture was emerging of a consumer base that is motivated by perceptions of

quality and freshness as well as price, which is discerning in taste to some degree, and is also

aware of health concerns around fat and salt in the diet. The skew towards male consumers could

be interpreted as an opportunity to play to their higher consumption levels, but also to design a

new offer that could attract women, perhaps on a healthier low fat platform. A quarter of

consumers are looking for healthy options, and a third want to see nutritional information

included with all sandwiches. Of concern though, the large variance in usage between butter and

spreads was something to understand and address in this category, especially if it is based on

perceptions of quality.

Spreads & Dressings: Flora & Hellman’s. What do Unilever’s brands currently offer their consumers and customers, and what does the

competition look like? These are clearly important questions to answer since the strategy must

set out how these brands will beat the competition in foodservice, and how this will fit in with

the overall brand positioning crafted for the retail customers. The Unilever spreads and dressings

business was acknowledged in the company’s recently published third quarter results statement

to have been “weak” in the UK, and there was some discussion about this internally and

externally. Clare looked over the arguments.

Flora became the number one margarine in the UK long ago, based on a claim of “good to eat”

before it could legally say “good for you”, the positioning it adopted in the rest of Europe. The

heart logo said family and love, and this warmth allowed the brand to maintain a leading share

through the eighties and early nineties. Annual retail brand sales last year were £350m, split over

five variants, the largest by far being Buttery (£195m). Flora also offers Light, Original,

Pro.activ and Lighter than Light, with the healthy variants accounting for £155m. The only two

products that showed sales increases over last year were Buttery and Pro.activ, and the latter is

now bigger than original Flora (Marketing, 17th

November 2010, p.18).

Positioning has become slightly confused, perhaps as a result of responses to an aggressive

advertising onslaught from branded butter. Both Anchor and Lurpak have promoted heavily, and

Lurpak in particular has been gaining share at the expense of Flora, based on the claim that the

nation wants a butter “created by cows, not chemists”. Flora is successfully challenging on taste

with Buttery and also owns the “heart health” proposition, but these are conflicting ideas when

attached to one brand name. For sandwich bar operators, the big advantage of Flora is that it

spreads easily and quickly. It is available to foodservice operators in bulk, 2kg packs but faces

stiff competition from other margarines as well as from butter (Appendix 3 shows list prices and

a few competitors). No other spread offers “heart health”, but for taste Utterly Butterly is

available in foodservice format, and salted and unsalted butter is offered in blocks, bulk packs

and portions. Standard margarine (of which Summer County was recently launched as a Unilever

price fighter) is considerably cheaper than Flora, and although acceptable it doesn’t offer the

same benefits.


9

Hellmann’s is the UK’s leading mayonnaise brand, introduced from America in the 1960’s. In

the retail market there are at least five variants in the range including two with a clear health

positioning, Light, and Extra Light, while the Light version is also available in a catering format,

allowing operators to offer their consumers a choice. Unilever is working hard to reposition

mayonnaise away from the pure indulgence perception its consumers currently hold. Since the

main ingredients of any mayonnaise are egg yolks and oil it is seen as high in cholesterol and fat,

and therefore extremely unhealthy. In fact, Hellmann’s contains “good” vegetable oils rather

than those containing trans- and saturated fatty acids, and is high in omega-3, enough to promote

“rich in…”. Hellmann’s can therefore make three important claims, which build into a healthy

positioning:

Rich in omega-3

Contains vitamin E

High in good fats that combat blood cholesterol

Of course mayonnaise contains calories, but as an ingredient in a sandwich this is likely to be

less than 5% of the recommended daily intake; all this and great taste too!

Appendix 2 gives list prices for foodservice mayonnaise products and some competitors. Like

Flora, Hellmann’s is a quality brand at a premium price, and some own labels are available at

less than half that price. There are brands competing too, the biggest of which is Heinz, which

respondents claimed to like slightly more than Hellmann’s. What is interesting is that the same

consumers also believed that they could taste the difference in quality between brand and own

label, and would be prepared to pay a few pence more. What operators think might be a different

story in these difficult times.

Health versus Taste A value proposition needs to be developed for the two brands that creates an explicit and

persuasive positioning, able to differentiate throughout the entire foodservice channel. On the

one hand both brands are well known and have powerful health attributes which can be claimed:

Flora already owns “heart health” and by communicating a “good fat” positioning for Hellman’s

it would also be possible to own health in the mayonnaise category too. Conversely, Flora is

competing mainly with butter, and a head-to-head taste claim coupled with a health story may be

convincing. Hellmann’s is already indulgence itself. Which approach will drive higher sales

growth? Are any claims strong enough to overcome the deep discounting that seems to be

prevalent in the sector? Will consumers respond, and reward operators with their business? How

can the claims best be communicated to distributors and operators as well as consumers? Figure

2 shows the main touchpoints where brand communications can be made to the key audiences,

but will one positioning be understood by everyone, and how should it be delivered?

Having reached the end of the available secondary data, it seemed that some more research was

needed, especially around the questions of communication. In identifying a major opportunity in

the growing sandwich market Clare felt that she had made a breakthrough in identifying this


10

product/market combination for strategic investment, but the next step was harder. What was

needed was some specific information about operators and customers in the four main channels

where sandwiches were prepared and served, namely pubs bars and restaurants, cost-sector

catering, delis and sandwich bars, and hotel, travel and leisure outlets.

Three questions needed specific answers:

1. What is the best communication channel to reach independent operators?

2. What kind of communication will be most influential/persuasive?

3. Who is buying sandwiches in this sector, and what are the key behavioural drivers for

them?

Answers to these questions and any further information from observing the operators and

consumers could only help in reaching the necessary insight to develop a winning strategy to

grow the brands in this sector.

Figure 2: Unilever Foodsolutions key industry touchpoints.

Research was subsequently organised among channel operators and consumers in London, and

some important observations gathered which would have an influence on shaping a future policy

for the brands. The most important findings are given below from presentations delivered to the

Foodsolutions marketing team, and while some of these findings confirm Clare’s earlier

research, others add to understanding of the situation greatly.

Findings A substantial number of questionnaires were completed by consumers in various segments, and

depth interviews conducted with both operators and consumers to probe motivations and

attitudes to the brands and company, and to buying and consuming sandwiches.


11

Consumers The research generally confirmed earlier findings that consumers wanted to be made

more aware of what they were eating, including any branded ingredients. Women especially

were concerned about “healthy eating” questions, and needed to be given more nutritional

information with any purchase. As to the brands, consumers confirmed that they would consider

paying more for a branded spread, and would think more highly of an outlet that used one, but

when asked which brand they preferred, did not consider it that important. This may be a result

of the absence of brand communication in the channel to date, and could be an opportunity for

Unilever to exploit.

As to outlet choice, consumers confirmed that the main drivers here are location, convenience

and speed of service given the limited time available in a lunch hour, but many commented on

the importance of making up sandwiches to order, lots of fillings and efficient and friendly staff.

It was however commented on that a choice of spread or dressing (eg a light version) was only

infrequently offered, although butter was preferred over margarine by a very large majority of

respondents. Men were less concerned about this choice than women, and were generally found

to be less “brand-conscious”, but a view emerged that the visible use of brands conveyed an

impression that the outlet “cared about quality”. Women indicated (sometimes strongly) that they

would switch outlet to get a healthier sandwich.

Operators The research found that operators were buying spreads and dressings from a wide

variety of sources, including local supermarkets, cash & carries and delivered wholesalers. Many

were using own-labels or price fighting brands, and like the customers, claiming an interest in

quality, yet were driven by cost. Despite this, customer loyalty was often stated as a priority, and

dependent upon quality. If customers asked for a branded spread, they would certainly be offered

it. The stakes are high: independent operators are competing with supermarkets and chain

bakeries such as Greggs, who offer meal deals on price promotion, and convenience by using

pre-packs.

As to communication channels, many operators use the internet and email, as well as the biggest

trade magazines. While some found calls from wholesaler telesales teams to be “a waste of time”

in other words they brought no added value or convenience, many used a paper catalogue to

order from, supplied by a wholesaler. Trade shows were hardly ever visited. Many however

expressed a very strong preference to see a sales representative in person, to keep abreast of

current trends and to hear about promotions or product innovations, and to receive samples. In

the pub sector, an interesting communications proposal was for Foodsolutions to organise

consumer research in order to demonstrate the levels of interest in quality food, and its capacity

to generate a strong revenue stream beyond the sale of alcohol. This could be a means of

demonstrating the quality not price proposition, but most independent operators are in very close

contact with their own customers, and can respond quickly to emerging trends. There was also

strong interest in the provision of point of sale material to draw attention to the quality of the

brands being used, in much the same way that Coca-Cola does, or the breweries.


12

A very major area of concern which emerged in several depth interviews was that many

operators either know little about Unilever Foodsolutions, or were actually hostile to the

company. One operator expressed this very strongly:

“Multinational companies are the death of small businesses. They are only interested in

working with the chains.”

This attitude is hardly surprising given the amount of exposure the corporate brand gets in this

sector, and yet it is a clear opportunity to develop a profitable relationship for both parties. There

is also a gap between brand recognition (which is high for Flora and Hellmann’s) and their

association with UFS or the parent group (for which awareness is low).

Observation, Insight, Solutions Clare now felt that she had a very clear picture of the opportunity in the independent sandwich

sector, and could see a way to develop a winning strategy to drive growth for her two brands.

This would have to make it clear how Flora and Hellmann’s were going to attract more

customers more often for more money at every stage of the marketing channel, over a

competition that included strong added-value brands like Heinz as well as deeply discounted

own label products.

It had emerged that the independent catering market was large and potentially profitable, but it is

hard to reach by the usual mass-marketing communications such as advertising. Operators are in

close touch with their own consumers and like to run a face to face business. It would need a

very convincing value proposition and a major commitment from Unilever to break down the

barriers to entry at every level in this segment. A big question is whether the firm’s core

competences and unique resources stretch to this. Nevertheless, if a sustainable competitive

advantage could be obtained, then Foodsolutions had other brands that might benefit from the

investment, and strengthen a new position over time to create important barriers to competing

firms.

It was time to start drafting the strategy, and the 2011 marketing plan.


13

Appendix 1: UK Foodservice Outlets 2009

Unilever Foodsolutions (Source: Horizons 2010. Data, Full Year 2009)


14

Appendix 2: Relative Prices – Mayonnaise

Source: www.nila.co.uk accessed 13th

December 2010

http://www.nila.co.uk/


15

Appendix 3: Relative Prices – Spreads

Source: www.nila.co.uk accessed 13th

December 2010

http://www.nila.co.uk/


16

Appendix 4: Foodsolutions channel definitions

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