Unilever makes ‘purpose-driven’ deal for Seventh Generation
Photo: Seventh Generation

Unilever makes ‘purpose-driven’ deal for Seventh Generation

Unilever is looking to grow through acquisition. The consumer packaged goods giant, which recently acquired Dollar Shave Club, has reached an agreement to acquire Seventh Generation, the maker of plant-based household and laundry cleaning products as well as personal care items including diapers and tampons.

The deal, reportedly valued at $700 million, will have Seventh Generation join Ben & Jerry’s and Dove among Unilever’s growing lineup of “purpose-driven brands,” said Kees Kruythoff, president of Unilever North America, in a statement.

“Seventh Generation has long been a disruptor in the U.S. marketplace, leading the industry in sustainable innovation while attracting new generations of conscious consumers,” said Nitin Paranjpe, president of Unilever’s Home Care business.

The deal to acquire Seventh Generation comes on the heels of reports last week that Unilever was in talks to acquire The Honest Company, co-founded by actress Jessica Alba. The talks were described as being in the early stages by The Wall Street Journal. It is not known if the Seventh Generation deal will end Unilever’s pursuit of The Honest Company.

For those questioning whether Seventh Generation will lose its “green” mojo if it is acquired by Unilever, the company only need point to the experience of Ben & Jerry’s acquired by the CPG giant in 2000. Back then, the company pledged to let Ben & Jerry’s be Ben & Jerry’s. While tensions may have arisen over the years between the brand and its parent (see GMO labeling), Unilever is credited with allowing Ben & Jerry’s to stay true to its mission and the business has seen subsequent growth.

BrainTrust

"These are brands that are important to the all-important Millennial shopper."

Zel Bianco

President, founder and CEO Interactive Edge


"Maybe, as some of the panel believe, Millennials are more likely to buy these brands, but they have families and they are influencers within them."

Joan Treistman

President, The Treistman Group LLC


"The big question is whether their ideals will take a hit as these shoppers age."

Dr. Stephen Needel

Managing Partner, Advanced Simulations


Discussion Questions

DISCUSSION QUESTIONS: Is Unilever on the right strategic path with its acquisition of Seventh Generation and its pursuit of the “purpose-driven” brands market? Does an acquisition of The Honest Company still make sense since the brand markets products similar to Seventh Generation’s?

Poll

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Ian Percy
Member
7 years ago

At first glance this sounds like a conversion experience so how can we but applaud. Still I wonder what the other option is to being “purpose-driven.” This is like companies who list “honesty” as one of their corporate values. What exactly is the other choice?

I wrote a book on corporations being purpose-driven so I’m in the choir. But the brutal reality is that every company is purpose-driven. Sadly many of those “purposes” are destroying us. Still, this is great and encouraging news.

Zel Bianco
Zel Bianco
Active Member
7 years ago

As stated, acquiring Ben & Jerry’s did not hurt the brand and only helped it continue to grow. There is no reason to think that the same would not be true for Seventh Generation. This is a smart move for Unilever and may not preclude them from folding in The Honest Company as well. There are many examples where a huge CPG like Unilever has acquired multiple companies and brands in the same category. This is not far from the idea of Walmart buying Jet. These are brands that are important to the all-important Millennial shopper and increasingly will be the most important segment to companies like Unilever as they push for growth anywhere they can find it.

Dr. Stephen Needel
Active Member
7 years ago

The purpose-driven path will only be good as long as shoppers stay in that mind set. If we attribute this behavior to (primarily) Millennials then we have no clue as to what will happen as they grow up, (hopefully) get jobs, have to start paying bills, etc. The big question is whether their ideals will take a hit as these shoppers age. Keep in mind, Seventh Generation is a minor player in most of their categories and they’ll be taking Unilever North America to places they haven’t been in some time.

Max Goldberg
7 years ago

Unilever is following the time-tested strategy of buying stellar craft brands rather than trying to create them from within. So far the CPG giant has shown a willingness to give its acquisitions a good deal of freedom to run their businesses. InBev and others have followed similar strategies. With bureaucracies in large companies stifling innovation, buying successful craft brands makes good sense.

Adrian Weidmann
Member
7 years ago

Millennials, Generation Y and Generation Z shoppers support brands that have a moral compass and clearly and continually demonstrate their social conscience (Toms, CVS) with their (e)wallets. Acquiring brands that meet that criteria is simply good for business now and for years to come. Unilever clearly understands who their customers will be in the years to come and they are making certain those consumer dollars flow into their coffers.

Cathy Hotka
Trusted Member
7 years ago

One question here is whether the acquisition of Seventh Generation makes customers feel more positive about Unilever, and I’ve got to think the answer is no. Will the average customer be aware of the change?

Patricia Vekich Waldron
Active Member
7 years ago

Like all CPG brands, Unilever needs to review and refresh its portfolio to stay relevant to consumers. Honest Company and Seventh Generation are good choices for the growing segment of eco-conscious shoppers.

Joan Treistman
Joan Treistman
Member
7 years ago

Of course it makes sense to incorporate Seventh Generation in the Unilever portfolio. Plant-based products are getting more attention and consideration. Purpose-driven brands that promote themselves effectively, like Toms, are successful. Maybe, as some of the panel believe, Millennials are more likely to buy these brands, but they have families and they are influencers within them.

Yes, it’s still a question of effectiveness and value for the money among consumers. However, “value” is being redefined. “Value” includes my values as well as dollar value.

Dave Wendland
Active Member
7 years ago

Yes, this is an excellent acquisition and will provide compelling growth for the company. My encouragement to Unilever is to allow the “purpose-driven” brand philosophy to infiltrate other brands within the Unilever portfolio. At the end of the day, consumers will decide whether the acquisition makes sense and if Unilever is remaining relevant with Seventh Generation and its other franchise brands.

Jasmine Glasheen
Member
7 years ago

I clean with Seventh Generation products and I’m thrilled with their acquisition by Unilever — it means a powerhouse has gotten behind one of the brands I trust. Not only is Unilever is genius with their purpose-driven brands, but they remain true to the brands’ core values (and demographic). Ben & Jerry’s, under Unilever’s ownership, created an ice cream supporting the Bernie Sanders campaign. Regardless of your political inclinations, these guys know how to penetrate a demographic. They’ve also come out with vegan options.

Unilever understands what matters to Millennials. They don’t test on animals and are snatching up brands with great reputations. Pretty no-fail strategy.

Craig Sundstrom
Craig Sundstrom
Noble Member
7 years ago

Yes, the “mojo” issue is, I think, of most interest, since it’s reasonable to assume many “green” consumers will be inherently suspicious of a (large) corporate ownership (though that assumes they will be aware of it … it’s hard enough to get people to read what’s on the front of a package, let alone read the back to see who the owner is).

Also, as I perpetuate my own stereotypes, I have more confidence in a Dutch company offering autonomy than an American one, answering to Wall Street’s obsession with cost reduction. I wish everyone well.

Joel Rubinson
Member
7 years ago

It’s a business decision, not a form of altruism. If the business fundamentals make sense in terms of trend, appeal to certain demo groups, and gives the ability to find target consumers more efficiently, programmatically, fine.

Tom Dougherty
Tom Dougherty
Member
7 years ago

Funny thing. I don’t think consumers will notice a difference because few will be aware that Unilever now owns Seventh Generation. Being under the Unilever umbrella means greater distribution but Unilever as a brand is not as well known as its product brands.