Growing your core business by 1% beats innovation any day

Kristine Alvarez-Go –CONTRIBUTED PHOTO

Kristine Alvarez-Go is the general manager of Unilever Nutrition for Southeast Asia and a member of the board of Unilever Philippines. She won the 2022 Tambuli Asia Pacific CMO (chief marketing officer) of the Year, among other awards. In this interview, she shares her thoughts about growing the core business through “fresh consistency.”

Q: You have been involved with many brands, categories and initiatives in your career. How should marketers grow the business?

The first thing is to never have too much ego that you believe you are the “savior” of any declining business or challenge. In every new job, brand or category, always go in with huge appreciation for the leaders who have come before, regardless of what state the business was in. When we come in humble, we learn more, absorb more and the people around us tend to be more open.

With that foundation laid out, I would then follow with a strategy of creating growth behind the core, the biggest and most profitable part of the business. A lot of marketers believe that growth comes from innovation—new “toys” that you have to build from ground up and have poor margins. My career, built behind growing the core (and not launching innovations left and right), is a testament that success is built on solid foundations. By selling more of the stuff we have a leading position in, we grow significantly, profitably and without complexity.

To many marketers, especially the young ones, the notion of growing the core is boring and unimaginative. I beg to differ. Creating real impact behind the core business is the most challenging (and rewarding) aspect of a marketer’s career. It is actually more creative to land something new and impactful behind a well-known brand/business; and when that happens, it is a fantastic legacy to leave behind.

Q: How can marketers find the “true north star” of their brands or businesses?

The “true north star” of any business is the core: the biggest and most profitable part of any business (i.e. it pays our salaries!), and where the brand has a leading position in. Continually growing the category, through penetration or premiumization, is to the benefit of the brand.

We all know that penetration is a “leaky bucket” (from Byron Sharpe’s “How Brands Grow”). Our job as marketers is to continually create distinctive marketing mixes, so the brand is recalled and relevant at the point of purchase, and boost distribution to make the brand available in more places. Rather than core brand growth being a one-off activity, it should be a way of working—an ongoing process of idea development and implementation to keep the core business growing.

Q: You and your team turned around Selecta ice cream from a two-year decline to finish 2021 with a double-digit growth. Can you share the story behind the scenes?

The Selecta turnaround story is a great example of why we cannot lose focus on the core business. Prior to 2019, the Selecta ice cream business had been growing double-digit for years on the back of core campaign renovation and increased distribution. Leading up to 2019, it started innovating massively through flavor variety and new impulse ice creams, resulting in huge cannibalization and minimal incremental turnover. With too many new toys, the innovations took marketing and promotion support away from the core, weakening the business that was fueling it. When the pandemic hit in 2020, the ice cream category was deprioritized, with consumers tightening their belts, and in that time, Selecta responded by halting recruitment of new users and going media dark.

At the beginning of 2021, the first action was to stop almost all new innovations planned. With money being tight, all support had to focus on our biggest businesses—Selecta and Creamdae tubs, Cornetto and Magnum. The year started with a core relaunch of Selecta, behind its “creamiest-ever” bestsellers, followed by re-airing of campaigns for Creamdae and Magnum, both of which were still relevant. For Cornetto, we had to pivot to a pandemic-relevant campaign—love amid social distancing—and our biggest break was the collaboration with the newest love team, Donny Pangilinan and Belle Mariano, Cornetto being the first brand they endorsed.

The team also did a lot of cleaning up. We streamlined the portfolio of top flavors that made up the majority of the business. Portfolio simplification led to complexity reduction in manufacturing, allowing us to produce more of what makes us famous and bring down the cost to do so.

But the biggest impact to the business was landing our purpose campaign “HapPinas,” a play on the words happiness and Pilipinas, making happiness truly local. The Philippines had the longest lockdown in the world and many of our kababayans had been separated from their loved ones. The one thing that Filipinos yearn above all else is being connected with each other once more. Through HapPinas, Selecta showed them that just because they were physically apart, it didn’t mean they should be socially distant. Through our wide distribution network, we encouraged Filipinos to share happiness by sending ice cream, and each purchase meant an ice cream for a community in need. This campaign, released in third quarter 2021, brought Selecta to its highest growth in a quarter that is historically low-performing because of rains and floods.

In the end, Selecta managed to turn around and bring back the business to its former glory. In addition, actions on strengthening the core foundations remained intact. I’m truly humbled by the experience, and immensely proud of the cross-functional team behind this success. This story is one for the books!

Q: Unilever’s food business has been growing and is now even bigger than the hair and home care categories, from ranking just No. 3 half a decade ago. What drives this phenomenal growth?

The secret behind the phenomenal growth of the food business is relentless focus on the core. One of my famous lines during sales conferences is, “In food, we are boringly consistent, but we are consistently growing.” I am proud of this because it’s not something other businesses can claim. Truthfully, my slides contain the same campaigns on tinola, monggo, sinigang, sandwiches and salads—these are our top dishes and getting more households to prepare them is our ultimate goal, year after year. Why? Because our brands are the undisputed leader in making these dishes taste great.

There is such a thing as “fresh consistency.” Growing the core requires consistency behind the brand’s distinctive memory structure—what made the brand famous—introduced in waves of fresh communication. It’s about saying the same thing in new and impactful ways. Across all of our brands, our ultimate goal is to get people to use it (i.e. consistency), so we introduce freshness by talking about how our product is made, how the ingredients are sourced, the impact it has on the dish, why the family continually likes the dish, what are the new pack sizes and new occasions to make the dish—and more.

Every year, the question I ask the team is, “What are you doing to step up growth?” The key word is “step up” and not “reinvent.” As long as the brand remains strong, there is no reason to change our formula for growth.

Q: Can you share with us a few failure stories that young marketers can learn from?

Failure happens to everyone, but resiliency is important. One of the crucible moments of my life is my failed low-cost laundry detergent launch in Indonesia. It was one of my earlier days in Unilever, when I had just been named brand manager. We had a big brand under attack from local, low-priced competitors and we believed that the solution was to flank competition with a new, low-cost brand.

I had a lot of ego back then—every single test showed that the launch would be a success and we had won the hearts of the local sales team. But I compromised on little things, like diluting product quality to protect margins and spreading marketing budget too thin by launching nationwide instead of having pilot markets. It was a painful lesson to be delisted in less than a year of launch.

Looking back at that experience, it reinforces my belief that opportunities are endless but core growth is always key. Innovation is often not the solution to a declining business. I’m not saying that innovation is wrong. On the contrary, there have been successful innovations but those are rare. Meanwhile, every company has a core business and growing 1 percent on the core beats any innovation any day. —contributed

Kristine Alvarez-Go will speak at the 14th Mansmith Market Masters Conference on May 17, 2023. Registration is available at marketmastersconference.com

Josiah Go is chair and chief innovation strategist of Mansmith and Fielders Inc.