Unilever Exits Russia: Too Little, Too Late for Brand Reputation?

By The Malketeer

Journey Towards  Rebuilding Trust and Repairing Potential Damage to the Brand’s Reputation

In a move that has been long awaited by many, British consumer goods giant Unilever has finally completed the sale of its Russian subsidiary, joining the ranks of multinational companies that have exited the country following its invasion of Ukraine in February 2022.

This decision, while significant, raises questions about the long-term impact on Unilever’s brand reputation and its marketing strategies moving forward.

The Exit Strategy: Selling to a Local Player

Unilever announced on October 10, that it has sold its Russian operations to Arnest Group, a local manufacturer specialising in perfume, cosmetics, and household products.

The sale, which includes all of Unilever’s business in Russia and its four factories in the country, also encompasses the company’s operations in Belarus, a close ally of Russia.

Delayed Departure: The Cost of Hesitation

While Unilever CEO Hein Schumacher emphasised the completion of the sale as the end of Unilever Russia’s presence in the country, the company’s decision to maintain operations for nearly two years after the invasion has not gone unnoticed.

This delay triggered widespread criticism and even led to Unilever being placed on Ukraine’s International Sponsors of War list.

Balancing Act: Business Interests vs. Ethical Considerations

Unilever’s initial decision to continue operations in Russia, despite strongly condemning Moscow’s invasion of Ukraine, highlights the complex challenges multinational corporations face when navigating geopolitical conflicts.

The company’s delayed exit raises questions about the effectiveness of its crisis management and the potential long-term consequences for its brand image.

Rebuilding Trust: The Road Ahead for Unilever’s Marketing Team

As Unilever finally severs ties with Russia, its marketing team faces the daunting task of rebuilding trust and repairing potential damage to the brand’s reputation.

This situation presents both challenges and opportunities:

1. Reputation Management: Crafting a narrative that addresses the delay while reinforcing the company’s commitment to ethical business practices.
2. Stakeholder Communication: Developing targeted messaging for various stakeholders, including consumers, investors, and NGOs, to explain the company’s actions and future commitments.
3. Brand Repositioning: Potentially repositioning certain brands or product lines to distance them from the controversy and emphasise positive corporate values.
4. Corporate Social Responsibility: Strengthening and highlighting CSR initiatives to demonstrate the company’s commitment to global issues and ethical business practices.
5. Market Reallocation: Strategising how to reallocate marketing resources and efforts previously dedicated to the Russian market.

Lessons for the Industry

Unilever’s experience serves as a case study for other multinational corporations, emphasising the importance of:

• Rapid response to geopolitical crises
• Clear and consistent communication with all stakeholders
• Alignment of business decisions with stated corporate values
• Proactive reputation management in the face of potential controversies