Abstract

Anglo-Dutch FMCG Company Unilever had a presence in India since the late 1800s. By 2013, Unilever’s India arm Hindustan Unilever Ltd (HUL) had 35 brands in its fold, covering 20 different categories. The case discusses the distribution system of HUL’a Pureit Water Purifier. It also examines the various activities that the company undertook to fulfill the parent company Unilever’s goal of providing safe drinking water to 500 million people by 2020. The Unilever Foundation partnered with several organizations like The World Food Program and Save the Children and launched the Unilever Sustainable Living Plan aimed at sustainable growth. With a view to making its mark throughout the country, HUL reinvented its distribution channel and created new channels of distribution to reach consumers at the Bottom of the Pyramid. It formed associations with non-governmental organizations, microfinance institutions, and other micro-credit lenders, to fulfill its commitments in terms of health & nutrition, women empowerment, enhancing livelihoods, water conservation, etc. Various programs for water conservation were initiated like Tank Cascades Development for Livelihood Security with the DHAN Foundation, Water Harvesting and Utilization project with BAIF, and Sustainable Watershed Development through Conservation, Harvest, and Utilization with LEAD. The programs targeted the population in rural areas and helped them to conserve water using various measures and technologies. Also, HUL joined hands with a non-profit organization: Integrated Village Development Program (IVDP) to promote its product — the water purifier Pureit — under the program ‘Unilever Pureit Protecting Lives’. It also aimed to spread awareness about the importance of safe drinking water. Through this program, interest-free loans were sanctioned to members of IVDP. In alignment with reinventing the distribution approach, the customer base was widened with the help of new channels of distribution. In 2012, water sachets under the Pureit brand were test marketed in parts of Madhya Pradesh, India. The company was yet to decide on the distribution system to use for the Pureit sachets. Should it use its extensive distribution system through which it distributed its FMCG products or should it use the new distribution channels it had developed in association with NGOs, to reach the Indian hinterlands? At the same time, this new product by the company came in for a lot of criticism due to the chemical content in the water and the pollution and environmental hazard the used sachets would create in the absence of proper waste disposal methods in the country.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the company’s approach of reinventing distribution and how the new channels of distribution channels worked.
• Discuss and debate whether the new approach is sustainable and competitive.
• Discuss how the new distribution systems helped the company reach new customers.
• Examine how the company used new distribution channels to fulfill its commitment to provide safe drinking water.
• Discuss how the company should address the environmental concerns about Pureit sachet.

Keywords

Distribution Channels, Fast Moving Consumer Goods Company, Corporate Social Responsibility, NGO, Self Help Groups , Water Conservation, DHAN Foundation, Unilever, Hindustan Unilever, Water Purifier, Water Purification , Unilever, IVDP