Taking over the running of Unilever’s Knorr, a 184-year-old food business, would be a daunting task at the best of times but to do so during a cost-of-living crisis makes the job that much harder. But Frank Haresnape, who has worked for Unilever for 25 years – five years longer than the UK consumer giant has owned Knorr – is confident the international bouillon, seasonings, soup and recipe-mixes brand is fit for purpose.
Haresnape is a South African based in the Netherlands, who has previously held executive roles at Unilever including CMO of its Pepsi Lipton joint venture and vice president of foods in Africa. He took the reins at Knorr in September and is steering a course based on brand reputation and solving consumers’ problems. It is a job that comes with plenty of responsibility: Knorr is the largest brand in Unilever’s nutrition division and its second-largest overall (after Dove).
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Just Food: What were your first impressions on taking up the Knorr role?
Frank Haresnape: Just what a truly global brand Knorr is. I was at our facility in [Heilbronn] Germany recently and I was struck by the history and tradition of the brand. Its scale comes from its breadth of geography, which is impressive. It’s a EUR4.5bn (US$4.67bn) turnover business and is [present] in more than 90 markets and 400 million households. It is a business of EUR50m in 26 different markets. It also has more than 1,500 products. Knorr products are chosen more than three billion times a year.
JF: What is its success based on would you say?
FH: In all these markets, Knorr is regarded as a local brand rather than a global one. Its top ten markets include the US, Germany and Mexico but also Indonesia and the Philippines. Just outside the top ten are countries such as Nigeria. It is always known as Knorr apart from in Indonesia, South Africa, Kenya and Uganda where it is called Royco.
JF: How do you go about ensuring a brand established in 1838, even one with such reach, remains relevant today?
FH: If you want to stay relevant and keep growing you have to modernise, even if it is one of the oldest brands in Unilever. I would say that we have evolved the portfolio. There is a real variety of flavours but what made it strong in the beginning – a convenient way to eat better – is still the core anchor of the brand today. Those core capabilities remain relevant.
JF: What have you identified as your main challenge in the job?
FH: Great brands resolve real consumer problems. We are focused on defining the problems facing consumers in food in the next decade. How can we eat better in a way that is enjoyable and not done grudgingly? It means less of the bad things – salt, fat etc – and more of the good things, such as vitamins and fibres.
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By GlobalDataJF: Is this a trend-based approach?
FH: It’s about less meat and more plant-based and understanding the nutritional values and environmental impact of animal-based [products]. The perception of this is evolving.
JF: Is Unilever’s product innovation for Knorr linked to this better-for-you approach?
FH: We launched zero-salt bouillon in Brazil, for example. The great thing about it is when you take the salt out you find out which other herbs and seasonings work and add value. In Indonesia, we have seen a lot of opportunity for a natural mushroom stock-type product. We are also fortifying bouillon with zinc and iron to tackle deficiencies in low-income markets such as Nigeria and Kenya. And meal kits in the Netherlands have been reformulated to include more vegetables in recipes.
JF: What, in general, is your approach to innovation?
FH: We talk about micro-battles – key trend areas for our innovation agenda and all elements of our marketing programme.
JF: Do you also take into account the current cost-of-living crisis which may force consumers to choose between the must-haves and the nice-to-haves?
FH: That’s a false choice. Meat disproportionately adds cost to a meal and is more cost-inflationary. There is no correlation between plant-based and cost. Part of the problem in the food industry is the environmental cost [of meat-based food] is not factored in. At the moment we have an inflationary spiral but I think we will see a long-term inflationary trend on meat-based ingredients.
JF: You mentioned the inflationary spike. How is Knorr coping with costs rising in the supply chain?
FH: I think it has been a very difficult time for everyone with unprecedented cost inflation. We have had to recover some, not all, of that cost inflation. We try to keep the right balance between the quality we offer and price – responsible pricing. We are working hard to even out efficiency initiatives and cost initiatives. We are making our marketing harder working to offset cost inflation. It’s making us a stronger business. In every crisis there are opportunities.
JF: Are you talking about initiatives such as Rinde-Mas in Brazil, a mix which is intended to make homemade products such as meatballs and burgers stretch further?
FH: Yes and this is spreading from South America to Europe. It’s not rocket science. People remember their mothers doing it. It is also about creating more affordable formats. It could be pack sizes. This is particularly important in cash economies.
JF: You have also launched the Calling All Chefs initiative in the US, a contest for US consumers to create their own signature recipes for under $4 per serving. This is about using different tactics for different markets presumably.
FH: Calling All Chefs has been incredibly successful as a platform to show consumers how they can enjoy good food in a less expensive way.
JF: Returning to pricing, is Knorr facing intense competition from white-label products as cash-strapped consumers trade down?
FH: The differential between DOB [distributors’ own brand] and ourselves [on pricing] has never been smaller. The DOBs have to deal with the same issues as us. That’s a point to consider. But making sure the quality remains strong is also critical. In blind testing, the quality we build into our products has come through even in something as simple as a bouillon cube.
JF: You suggested that cutting marketing spend could be a useful tool in this economic climate.
FH: To be honest it is the opposite. It has never been more important to reaffirm the credentials of the brand and its products. But we are making sure that our ROI [return on investment] is greater. Price promotions is also something we are looking hard at.
JF: Presumably, trading across more than 90 countries, you can’t take a one-size-fits-all approach to these things?
FH: It goes back to the power of a global brand. It needs to be fit for purpose going to the [individual] market. In Indonesia, for example, it is much different to Germany or the US. Food is globally enjoyed but locally unique. Part of Knorr’s success is in embracing that. We have a methodology where we try to understand the top dishes in each market – it is a surprisingly small repertoire – and we also track fast-growing dishes. We use this information in designing products. Top SKUs are underpinned by knowing what type of dishes they are used for.
JF: What is the blueprint for the future?
FH: We really believe the fundamental consumer problem to solve for the next decade is how do I eat better – and more enjoyably.
