Unilever is a strategic Limited Partner in the current Physic Ventures fund. We invest capital on behalf of our strategic partners and work with them to add growth resources to our portfolio companies. Unilever is a global consumer products company with over $60 billion in annual revenues from food, beverage, home and personal care brands that are used by more than 2 billion consumers every day in over 180 countries. Unilever is also a global leader in sustainability. Last year Unilever published its ambitious Sustainable Living Plan which aims to double Unilever’s revenues by 2020 while simultaneously halving its environmental impact.
This Sustainable Living Plan has two components. The first is to make each product more sustainable by greening supply chains, manufacturing processes and distribution networks. The second goal is to reduce the environmental impact of consumers using Unilever’s products. For a consumer goods company, it is this consumer usage which has the greatest environmental impact. For example, the carbon emissions and water usage from taking a shower with Dove shampoo or doing laundry with Persil detergent are far greater than the environmental impact of manufacturing those products.
Changing the way consumers select and use products turns out to be more challenging than greening the production of those products, so Unilever has been doing a lot of research into this consumer behavior. This week Unilever released a new report on how Unilever plans to inspire its consumers to adopt more sustainable practices while using its products. They have identified 5 keys to inspiring sustainability: make sustainability habitual, provide consumers with sustainability information, make sustainability rewarding, make it desirable, and make it easy. Here’s a short video summarizing Unilever’s approach:
At Physic Ventures, we have developed a Network Innovation model that uses the insights developed by our strategic partners to inform our investment practice. We provide reciprocal insights to our strategic partners by sharing the technologies, services, and business models in which we are evaluating an investment. Once Physic has invested in a company, we work to facilitate partnerships with our strategic partners, like Unilever, to accelerate the growth of that portfolio company and help our strategic partners achieve their growth and sustainability goals. Unilever’s recent report on how to Inspire Sustainable Living provides two great examples of how this Network Innovation Model works.
In 2009, Physic invested in GoodGuide, the leading source of information on how the health, environmental and social performance of products aligns with consumers’ preferences and values. GoodGuide is delivering on Unilever’s finding that consumers make more sustainable choices when they understand the sustainability benefits of the products they are choosing. GoodGuide is also helping CPG companies understand which sustainability values are the most important to consumers.
Another Physic investment that was influenced by our discussions with Unilever’s sustainability team was our investment in Recyclebank. Earlier this year, we identified Recyclebank as the leading company providing consumer rewards for taking a broad range of every day green actions. This approach perfectly aligns with Unilever’s finding that rewarding sustainable choices helps reinforce those behaviors. Since completing our investment in Recyclebank, Physic was delighted to help facilitate a partnership between Recyclebank and Unilever based on Recyclebank’s rewards service.
In addition to these two examples of Physic portfolio companies that are now working with Unilever, Physic has recently made a number of other sustainability investments where our investment thesis was based on similar themes to Unilever’s plan to Inspire Sustainable Living. For example, our investments in companies such as EnergyHub, Gazelle, and WaterSmart all align with the themes of making sustainability habitual, desirable, easy, and rewarding. As I have discussed in previous posts, we believe these are enduring themes that can harness the technology of social connectivity, mobile access to information and collaborative consumption to help us all adopt more sustainable lifestyles.