Frank Braeken Photo: Unilever
Frank Braeken, Executive Vice President, Africa, Unilever
By Eleanor Whitehead | Published: 15 November, 2011
“What we need to do is much more listening to what the African consumer needs”
For Unilever’s Frank Braeken, the business opportunity in Africa is visual – you can lay it out on a map and its size speaks for itself. People forget how huge this continent is, he says. “It is more than three times bigger than China geographically. You can put China, and India, and Europe and North America in Africa.”
The consumer goods company has over a century of experience on the continent, making it one of the longest standing multinationals operating in Africa. The group does not disclose the proportion of its revenue to come from the region, but sales growth is strong at over 10 percent last year – a multiple of the company average. And today, size means markets – markets that are among the fastest growing in the world; and markets that Democratic Republic of Congo-born Mr Braeken is palpably excited by.
“It’s not difficult to believe that we can achieve more than double digit growth in Africa – and that is because of the momentum of the economies, but more importantly, because the opportunities right in front of us are just enormous,” he says.
To quantify, Unilever’s turnover per capita in South Africa is five times that of its second biggest market, Ghana. In turn, Ghana is twice as big as Kenya, and Kenya 10 times the size of Tanzania.
“If we could equalise that a bit, the growth is huge, and that’s just the amount of wide space in the main markets where we already operate. You can add to that countries like Ethiopia, where we don’t operate and the population is huge, or the DRC where we were once big but where, together with the economy, we almost disappeared.”
The potential to simultaneously expand on the products reaching Africa’s markets is huge. “Add to geography category-wide space and you see a mega opportunity,” Mr Braeken explains. “Take deodorants, where we are number one in the world but hardly play outside of South Africa. Think about where we could go with household care, things like Domestos, because there is such rapid urbanisation.”
The group isn’t alone in registering the significance of size. Africa’s more than billion strong population and growing middle class has presented a compelling investment story for a number of consumer goods groups. Reflecting this mood, Unilever has just turned sub-Saharan Africa into one of eight global operating regions, in a move that will allow the company to focus on consumer innovation.
“The times when only a few knew where Africa was and dared to venture there are gone,” Mr Braeken says. “There has been an element of complacency with our long history in Africa, and what this means for us is that we really have to step up our game... The main thrusts are affordability and getting serious about innovation. The reality in Africa is that focusing on the consumer started off by exporting European products and mixes. What we need to do is much more listening to what the African consumer needs.”
As examples, Unilever is increasing focus on Afro beauty products and is marketing low-cost climate stable margarine that does not require refrigeration. It has created a tier system to straddle pricing pyramids with brands of varying affordability levels, and has been aggressively pushing a low-price packaging strategy.
“It’s very ironic, borderline shameful, that most products in Africa are more expensive than in Europe,” argues Mr Braeken. “Infrastructure costs a lot, but that is only part of the problem. The other part is a lack of real innovation making products affordable. That is something that has been happening in Asia and Europe, and something that now in an accelerated fashion will happen in Africa as well.”