I completely agree with Terry Smith that mayonnaise is for salads and sandwiches, but that might be about it on this one. Unilever has of course not lost the plot when it comes to purpose driven marketing. 

To think that Unilever has gone purpose mad - and to the detriment of their performance as a business - would ignore the entire context for purpose at Unilever and indeed the performance of Unilever’s Sustainable Living brands in recent years.

But before getting into an impassioned argument for purpose, let’s not lose sight of the most revealing thing about the furore around Unilever and its mayonnaise: FundSmith is holding onto its shares in Unilever! So no matter what Hellmann’s mayo’s reason for existing might be and how that makes us feel, it evidently isn’t a reason to walk away from Unilever and FundSmith has probably made the right decision to hold.

There are three reasons to think why Unilever has not lost the plot.

Purpose and profit

When Unilever decoupled growth from its environmental impacts it wasn’t in acceptance of lower returns or poorer performance. As more businesses integrate purpose it broadens the value they create (and measure) and whilst some of that value isn’t as easy to quantify as quarterly returns, that doesn’t mean solely financial metrics are the right judgement of the impact of purpose.

Unilever’s purpose and sustainability achievements are cited as a major reason for wanting to work there, bringing talent into the business which can spur innovation, enhance the culture and drive growth, not to mention a myriad of other benefits. 

Corporate purpose and brand purpose

Unilever has integrated purpose across its business strategy, product portfolio, and operations, it is recognised as one of the most purposeful businesses in the world. Purpose penetrates how it defines success and through its Sustainable Living brands, it has had a positive impact on its commercial performance with those brands growing 69% faster than the rest of the business.

Unilever’s corporate purpose shouldn’t be conflated with each of its brands having purpose-specific comms. Brand comms and marketing in the context of corporate purpose can help make a meaningful connection with consumers and help stand out (and stand for something). So in that regard, Unilever hasn’t lost the plot. However, without that context and golden thread from corporate purpose to brands, brand-related purpose comms and marketing can warrant some cynicism.

If that healthy dose of cynicism can be constructive and be geared towards improving the effectiveness of brand purpose comms that is infinitely better than standing aloof and attempting to stop the tide of change. Our takeaway from the recent research from Peter Field that explored the effectiveness of purpose marketing is that it is a skill that needs to be honed and brand purpose campaigns will succeed or fail depending on the application of that skill and how it responds to the changing business and consumer contexts.

Purpose isn’t a distraction

The strength of Unilever’s brands was cited as a reason FundSmith was holding onto its investment in Unilever and as consumers become more socially conscious and this shows up in their purchasing habits and interaction with the world, it isn’t a reach to see Unilever’s commitment to purpose being a positive factor in the strength of its brands.

Purpose is far from a distraction, if anything, it is the opposite - a beacon and in our opinion at Given, the evidence suggests it is a signal of a more effective organisation, whether that be in the context of purpose-led businesses having higher levels of innovation, driving stakeholder engagement, or attracting talent.

Purpose and performance in 2022

Having said all of that, a healthy dose of cynicism is not a bad thing. Whether it be greenwash or purpose-wash, there is lots of scope for bad comms or disingenuous action to undermine the good work many businesses are engaged in. Unilever probably has some purpose-credit in the bank, but that doesn’t mean its performance shouldn’t be critiqued, but that assessment should be balanced and look at all the value it creates over the long-term.

Unilever is not alone in the attention being paid to its performance. Danone lost its CEO, an advocate of responsible capitalism, last year after it was argued he had neglected shareholder interests. There is an ongoing tension between the responsibility to create shareholder value and how we define that value in financial and non-financial contexts. 

In 2022, that tension might be more acute than ever before and as businesses grapple with the changing dynamic between their role as a business and role in society, different stakeholders will assess businesses success very differently.

Taking a long-term view, at Given we believe that profit without purpose is dead. That is not to say businesses that haven’t integrated purpose into their business strategy won’t make money, but they won't be as successful in the long run or maximise the full breadth of value they could create compared to businesses with a clear and embedded purpose that drives it forwards. Unilever is a great example of a business that has integrated purpose and sustainability and that should be applauded.