Hello, everybody. That was very impressive. The client actually arrived with the finish of the ad reel. So hello to everyone in the room and also those joining in by the webcast. And very much a welcome on behalf of Keith and all the team here at Englewood Cliffs to this, the Unilever Marketplace.
And in a moment, I'm going to ask Mike Clemente, who's Head of HR here for North America and led the redesign of this site to tell you a little bit more about this space and also, of course, give you the all important safety briefing. But before we do that, I just thought it would be worth walking through the agenda for today and for tomorrow, just so you know what's coming. So after Mike's introduction, I'm going to hand over to Graham. And Graham will tee up the event, setting the scene with a few of the key messages that we are that we have for the event. And then we'll hear from the categories.
We'll hear from each of the categories as to how Connected for Growth is delivering growth, 1st and foremost, and superior value creation. Now I think most of you know that there are going to be a number of management changes in January. So Kevin Havelock, where's Kevin, is retiring after 32 years with Unilever. He'll be taking up a plural career of non executive roles. I think many of you, many of us have known Mike, Kevin over the years through these events presenting and I'm sure would join us at Unilever in thanking Kevin for that contribution over many years.
And I'm sure we'll share a drink over dinner. Then Amanda is coming here to be President of North America. And Kevin will take over the newly integrated Foods and Refreshment business. Sorry, what did I say? Did I say Kevin, I'm sorry, Nitin, thank you very much.
Nitin will take over the newly integrated Foods and Refreshment Business. And of course, Kees will take over from Nitin as President of Home Care. And Alan will continue running Personal Care. But all of these changes are to come in January. So today, you'll very much hear and see from the Presidents in their current roles, of course.
So after the categories, we will have Mark Engel will talk about how he's driving costs out of the system throughout the supply chain and how that's both providing fuel for growth and margin expansion. And then Graham will return and do his main presentation, which will be on allocating resources and delivering value including portfolio change. Through that, we'll have plenty of time for breaks and Q and A during the day. Then I'll say something later this evening about the before we leave, about the logistics for the dinner tonight. For now, let me just say that I'm delighted that we will both have a short address by our Chairman, Moraine Deckers, who's with us today, Marijn.
And we're also delighted to have Brian Cornell, who's CEO of Target, who can share some interesting insights on the U. S. Retail landscape. So that's the agenda for today. And then briefly for tomorrow, we start we'll have buses shuttling over here from the park out from 8 We'll start promptly at 9 here with Kaes, who will talk about how C4G is building a stronger, more agile business in North America.
That will be webcast. And then we'll move to the interactive sessions, which will not be webcast. So we will you'll get a chance to meet some of the people who are leading our country category business teams or CCBTs in a panel session. You'll hear more about Connected for Growth in practice from then. We'll have a session from Stan, who leads our global consumer marketing insight organization, And he'll talk about the power of data in a connected world.
You'll also get to see that illustrated a bit in our people data center that we have here with Kathy and Gabby, who leads the people data center. And we'd also like to have Luis Tacoma, who runs our global media team. He'll also be joining for that session. And then I'm very excited about what we have next, which is an entrepreneurs panel. So what we're going to do here is we're going to have a panel session here, where you get a chance to meet some of the people who are running the more entrepreneurial parts of our business.
So you'll have Josh Solstheim from Ben and Jerry's. You'll have Vasilyki Petro for Prestige. We will have Joey Bergstein for 7th Generation Michael Dubin, the Founder and CEO of Dollar Shave Club, of course and Rishio Denis, who's the Founder and CEO of the new latest acquisition we have, which is Sundial Brands, which we only announced a couple of days ago. So I think that will be very interesting indeed. Then after lunch, we'll resume the webcast with Paul and his concluding remarks and a good Q and A session at the end of that.
So that's the agenda for the next 2 days. Before I hand over to Mike, this is the Safe Harbor statement, which is going to apply to all of the presentations over the next 2 days. We're not going to keep showing it in every presentation. So please take this as read for all the presentations. And with that, Mike, if I could ask you to take the stage.
Thanks.
Great. Well, thank you, Andrew, for that. And really welcome to the Unilever marketplace. Hopefully over lunch, you got a chance to see a little bit about the building and actually be in the representation of the larger part in the open aired marketplace. So we're going to do 2 things today before we get started with the formal part of the presentation is, we want to talk a little bit about the building and why it's the Unilever marketplace.
And then we're going to do, as Andrew said, a little bit about safety because we want to make sure that you have an informative session, but also one that is, of course safe. Driving value for Unilever. The first thing we would say is this building just opened 2 weeks ago and it's a consolidation of 5 different offices into 1 head office in North America here in one of our heritage sites just outside of New York, as you know. The other thing is you can see we've reduced the overall operating expense by 20%. And then finally, we went for a feel, which was the best of New Jersey and the best of New York.
So if you're looking around saying it's a campus feel, but it's also got a loft feel that's been the design on purpose. We want to be able to attract the best talents from the area. When we look a little further, we also want to make sure that the marketplace is a physical representation of the building and culture that we want to have. It's not just about collaboration, but it's also about collaborating in a way that drives better growth, better working together. And so what you'll see as you walk around the building is you'll see people working in workstations or in quiet rooms or collaboration space or hopefully in the marketplace itself, just people maybe even having a cup of tea and chatting over our business.
From a technology perspective, we're proud to be really at the forefront and have the most technological advance building in Unilever. In January, we'll you'll see sensors on the ceiling. They will all be Wi Fi enabled to allow us to control lights, to find each other, to book conference rooms, everything from our smartphones. And again, another way that we want to bring collaboration to life. And of course for us sustainability is so important.
So with the use of solar energy, we will have reduced our overall cost by 30%. We're using recycled materials. When you came into the lobby, you may have noticed that the front desk was actually built from recycled trees from the site And we're using lots of materials throughout the building that have been recycled. And you'll see lots of bins for our recycling efforts across the facility. And then finally, the building has been designed purposefully to standard for LEED Platinum and for Well.
And if you're not familiar with Well, we'll be the 1st site in Unilever to have a Well certification, which is all about the well-being in the health and how it feels to work in the building from a sitting in a chair perspective to walking around and engaging with the lights and the energy in the building. So now let's talk a little bit about safety. Safety is our number one priority. We of course want everyone to have an incredibly informative session, but we also want people to be safe. This is an active construction zone.
You probably would have seen that as you came in today. We are still working to finalize the building and we want to make sure that we spend an extra second to make sure that we understand and how to operate and move through the building safely. The first thing is you'll have these badges please Actually wear them at all times. There will be multiple spots where you won't be able to get in and out of the building unless you have these. You'll see your Unilever host.
There's a couple in the back. I see Joe and these white T shirts with the Unilever marketplace. If you ever have a question, find one of those folks, they'll help you get around the building or the rest of us in the Unilever tags as well can help. So as you move through the building, also please make sure that you do hold the handrails, particularly as you move in and out of the building. In the marketplace in particular, we're very cautious about this because it is concrete, it's a steep area and we're really trying to drive this behavior.
And please don't text and talk while you're doing that at the same time. The last two things, I'll show you a little chart just on where to go from an evacuation perspective. There is nothing planned. So if something happens, it is real. But what I would ask you to do and we mean this sincerely, the building is only open 2 weeks.
So if you see something that looks unsafe or you have a question about it, please tell us. We are in a continuous learning journey. And if you see something, just tell any of us and we will be more than happy to address it and we would love your feedback on that. Okay. So the evacuation procedure, again, nothing is planned.
So if you hear an alarm, it's real. And this building will make sure that all of us know where to take you. But basically, long story short, we will go out the sides and we'll gather behind our building behind us in the rear. So that's all we have planned, a little bit on safety, hopefully a little bit of an introduction about the building. And now we'll move over to Graham, our CFO, to give us some key messages.
So please, let's welcome Graeme to the stage.
All right. Thanks, Mike. Right. Good afternoon, everybody. Thanks very much for joining us here, and a warm welcome to this year's investor event.
Let me crack on. The theme of this year's event is Connected for Growth, Delivering Value. I think it's fair to say that in the last decade or of the last decade, the last 2 years have seen more change than any of the preceding 8 years. That's not a surprise to us. It's probably not a surprise to anyone really here in the room.
I think we've all been anticipating this period where you get an acceleration of change within our sector, within our industry. We are going to share with you over the next 24 hours quite a lot that will get you thinking, I think, quite a lot that will get you understanding what Unilever is doing to embrace that, quite a lot of what we are doing to seize on what we believe are huge opportunities that the changes and the fast pace of change with consumers, with technology, with channels, etcetera, that they bring. We think that if you prepare for that and you adapt early to that, there is tremendous opportunity. We are in the 3rd year of a journey really. You see here my first investment event actually in Manila and Singapore.
That's where we first started talking to you about 0 based budgeting and what we call then new functional models. And really, the new functional models were a precursor to what you will understand now as Connected for Growth. Actually, it was 2 years ago, over 2 years ago, that we first conceived of Connected for Growth and started to express it that way. And then last year even in Port Sunlight, we talked more explicitly for it for the first time. Connected for Growth really is, without a shadow of a doubt, the biggest change program that we've had in Unilever for the last decade or so.
And today and tomorrow, we're going to focus very much so on how Connected for Growth is, 1st of all, already delivering value for Unilever and secondly, how it fundamentally underpins our growth model going forwards in this much faster changing world. But while the pace of change in our sector is definitely accelerating And whilst arguably the barriers to entry in the sector are coming down, we have a very clear and a consistent vision. And in fact, we think we have 4 defining strengths that are built up really over the many, many decades that Unilever has been doing what it does. But we do continue to sharpen these defining strengths ready for tomorrow's world. I just wanted to quickly run through with you what the four things are.
First of all, we have a very, very strong portfolio of purpose led global brands and some very iconic local jewels. In fact, just to and I always think this is the most relevant thing for consumer companies, 85% of our portfolio sits in number 1 or number 2 positions in the categories or countries in which we operate. It's an extremely strong portfolio of brands. Secondly, we, of course, have what I think is absolutely unmatched, unparalleled global reach. We're in 190 countries, as you know, and we are almost 60%, 57% now in the emerging markets.
The third strength that we have is the depth and the breadth of our distribution. We reach 2,500,000,000 consumers every single day. Every single day, 2,500,000,000 people out of the 7 in the world reach out and touch one of our products and use it, which I think is an incredible amount of everyday contact with a large proportion of the people that there are on the planet. And we reach them through a staggering 30,000,000 outlets. We'll hear a bit more about the consumer tomorrow from Stan Stananathan, who's our Head of Consumer and Market Insight.
That's going to be a great session. But ultimately, what I'd like you to think about is the broad channel expertise and capability that we already have. I'll pick this up in today's closing session. But really, that depth of distribution and that ability to reach consumers through many channels is quite defining. And that ranges, of course, from our strength in the traditional trade in the emerging markets right through to e commerce and now more of our business that where we reach the consumer directly, direct to consumer, as we say.
And finally, I think we are genuinely, without doubt, the most international talent bench that exists in the industry. You're going to see quite a good portion of that over the course of today and tomorrow. We have diversity both in our global teams. Our global teams are diverse. Very, very important that when we make an investment and bring somebody into a global role, we think about the mix and diversity of international representation globally.
And of course, we have deep, deep experience within our local markets. 80% of our country leadership teams in our emerging markets are, in fact, local from that from the country itself. And as you know, we are the number one employer of choice in the industry in at least 34 countries, which again is a defining strength. There are 3 big themes of the event that I very much hope that you take away over the course of the next 2 days. The first one is that we are truly all about growth.
It is unmistakably the top priority for us in this company. We are seeking to grow always 1% ahead of our markets. We do that through fantastic execution and the fact that our portfolio is strong and we have those strong number 1 and number 2 positions, which mean we have very high market shares generally. And therefore, that allows us, if we execute well, to grow usually 1% ahead of our marketplace. We also are talking now about an extra 1% of growth that comes from evolving our portfolio.
And those 21 percents ahead of the rate of market growth give us the confidence to reconfirm, as we did in our release before this event, our 3% to 5% underlying sales growth guidance with a step up in volume. The second thing that we hope you take away from the event is that 5S, with our which our Chief Supply Chain Officer, Mark Engel, will talk about later on this afternoon, and 0 based budgeting together deliver €6,000,000,000 in savings between 2017 2019. That is fuel for both growth on the top line and allows us to operate going forwards at a higher margin. And that combination of growth and margin expansion, of course, creates an awful lot of value. Finally, the 3rd theme we'd like you to take away is that we are positioning for future growth opportunities.
We're doing that by changing the portfolio and by working on our channel footprint. And of course, we're building capabilities to sustain that. Now this is my last chart of the kickoff. It's not a perfect analogy, I know, but that's the Hudson River, which you probably drove past or drove over on the way here. It's just over there.
It's what I've been thinking about when I ponder the challenges and opportunities of faster disruption in this sector. I'm thinking of it like crossing over a river. You've got to do it. You've got to get to the other bank. And the water runs a little bit faster in the middle of the stream.
Now we started well over 2 years ago to reposition and think about the business for this faster pace of change. I think we've crossed the faster flowing part of the river. I think some companies are with us, and I think some others are still pondering the journey from the far bank. We hope to show you that over the next couple of days, and we'll let you decide who you think gets across the river. But certainly, as I think about it, it's a river crossing that we're going on, and we're well on our way.
So before I hand over to Alan, is going to take you through Personal Care, there's one other personnel change, of course, which you know about, and that is that Andrew Stephen will retire at the end of this year. And I'll say a little bit more about that briefly tonight. He had to go, by the way, after 35 years because if you can't tell the difference between Nitin and Kevin, then it's time to move on. That's what 13 years in IR will do for you. So anyway, I'll say a bit more about how highly we think of Andrew, and I'm sure you all do in the room as well this evening.
But I did want to introduce you to Richard Williams. So stand up for a minute, Richard. This is Richard Williams, who is taking on from Andrew. He's going to shadow him over the course of the day. Please give him a break and don't he has been working on spreads.
Don't ask him every question there is about spreads. But Richard has had a fantastic career, positioning himself very well for this most demanding job. He's worked in the frontline of our operations. He's worked in emerging markets. He's worked in developed markets.
He's worked in some really key corporate roles. So I just wanted to let you know who Richard was. And as I said, we'll have plenty of time to thank Andrew over the course of the next 2 days. With that, I'm going to hand over to Alan, who's going to take us through Personal Care.
Afternoon, everybody. It's nice to be here kicking off the category sessions. I've spent 14 years of my career working in the United States and it's nice to be back on this campus with a bit of a facelift and a refresh. But Mike, I'm not absolutely sure that I'm in a safe environment right now and I'm not quite sure how to report that. So bear with me.
Let's see what we've got here. I'm going to talk for about 20, 25 minutes and that should leave maybe 5 or 10 minutes at the end for questions. And before I do jump into our strategy, I want to remind you on the landscape of our Personal Care business. PC has grown to become 38% of our turnover, accounting for a little under half of the group's operating profit. And over the last period since 2008, we really made a step change in the scale of the business adding on over €9,000,000,000 of turnover.
2 thirds of that growth has been organic, solid organic growth another 1 third or so coming from acquisition. And this has really established us now as one of the big three players in the global personal care market. We're currently number 3 closing in on the number 2 position. We really operate with leading positions in most of the big segments of the personal care category. And to the nearest €1,000,000,000 we have a €6,000,000,000 hair care business where we're joint number 1 globally.
When we close the Quala acquisition in Latin America, that will put us just with our noses and head as the biggest hair care business in the world. We have a €5,000,000,000 skin cleansing business where we are 3 times the next biggest player. We have a €4,000,000,000 deodorants business where we are 4 times the size of the number 2 players and we have the number 1, number 2 and number 3 deodorant brands in the world. In skincare, we're globally number 3 and it remains a high priority for us to grow and strengthen our position in this important and typically faster growing skincare market. And oral care is a €2,000,000,000 skincare is €3,000,000,000 and oral care just under €2,000,000,000 So nice and easy to remember, €65,432.
And in oral care, we're the global number 4, but we're number 2 where we play because it's about half the world where we don't have an oral care business. So that gives you a sense of the big categories that we're operating in. These are on the left are our top 15 brands. 5 of them have turnover of over €1,000,000,000 The top 5 there Dov, Rexona, Axlux and Sansog. And of course, we get excited and talk about the new brands that we're introducing and the white space expansion.
But let's not forget that 75% of our growth between now and 2020 will come from our core brands in our core existing geographies. And so that every day driving our core business is our first priority. I'll talk about that in a second. Our top 15 markets on the right hand side, interestingly, we also have 5 markets over €1,000,000,000 The biggest, of course, is the United States where we now enjoy clear leadership in the big categories of hair care, skin cleansing and deals something that frankly a decade ago would have been almost unimaginable. And tomorrow, Kaes will share a bit more of how he and his team have really driven us to leadership in our big categories in North America.
But interestingly, the other €5,000,000,000 or more euro markets, India, Brazil, Indonesia, China exemplify how strong we are in the developing and emerging world. And as Graeme said, Unilever is 57% D and E, but Personal Care is at 62% D and E. And we think that's an inherent growth advantage. And the final point I would make is this chart doesn't capture 3 or 4 markets that are nascent and which are about to go into a period of extremely rapid growth. So places like Myanmar, Bangladesh, Iran, Pakistan are going to deliver very, very significant amounts of growth.
Each one of those markets will deliver a similar amount of growth as total Western Europe, just to give you a sense over the next 4 years. That's the size of the prize in places like Myanmar, Bangladesh and Iran. Now having thoroughly enjoyed growing ahead of the market with sequential quarter over quarter improvement between 2014 2016, our growth this year to date at 2.4% is frankly below expectations. And I could talk at length about lower global market growth or I could talk about a slow year holding us back in a couple of our most important markets like Indonesia and Brazil. Or I could talk about more recently how it's become harder to take price in personal care.
But I'm not going to. I'm just going to say that we remain unsatisfied. I'm particularly unsatisfied of the 2.4% growth, but determined and confident that we will soon be growing competitively above the magic 4% level, which is the benchmark I've set for growth in Personal Care. So what is our strategy to deliver that growth? Well, it's very much an evolution of what we shared with you last year and with some of you at the Bernstein Conference earlier this year.
Similar themes, a similar point of view on where the world is going, But I think you'll see much more determination to treat the fragmentation in the world as an opportunity and take full advantage of the new responsiveness and agility that Unilever's Connected for Growth organization offers. So here it is on one page. Our strategic ambition is to be the fastest growing global personal care business also growing faster than some of the local players. We choose to grow in our core as a number one priority with brands that are built on purpose, which deliver and own functional superiority and their core benefits and which operates as the tip of our spear on growing markets, market development, getting more people using endodern, getting more people brushing twice a day, getting more people using conditioners and treatments beyond a shampoo. But at the same time, we continue to evolve our personal care portfolio.
We're moving into fast growing segments such as naturals, therapeutics, male grooming and we are extending into relevant adjacencies such as baby care and prestige personal care. And we've prioritized 2 fast growing channels which I'll talk about in a second, e commerce and the health and beauty or our drug channels. Of course, all of this is underpinned by the 5 S and ZBB programs that Mark Engel will talk about. In Personal Care, we're already extremely profitable. And the majority of the resources that we unlock through 5 and S and ZBB will be reinvested to ensure competitive top line growth.
And the sustainable living plan, the U. S. LP, remains at the heart of Personal Care, most notably in our purpose led brands. And I'll show you a few examples of that. So I've had to capture our strategy on one page around growing the core, evolving the portfolio, developing channels and underpinning it with a commitment to efficiency and sustainable business, this is what it would look like.
So let's give a couple of examples of how we're growing our core. So Dove Dio is a fantastic business. It's a €1,000,000,000 business on its own Dove deodorants growing at 3 times the category growth rate. We've recently relaunched it with superior underarm wetness and odor protection and better skin caring technologies. But the way that we market it is subtly different.
So in Brazil, we ensured relevance by really dialing up the emphasis on 48 our protection because that's a more important attribute in Brazil. But in Indonesia where people are more concerned about the condition of the underarm skin, where dark patches are a problem, We talk more about how Dubbedo is better at ensuring smooth, even toned underarms. So same global proposition, nuanced difference in how it's landed by market. By the way, rolled out already in 65 markets, I wonder how many of us have ever even been to 65 different countries, just to give a sense of what it's like to manage these big global franchises. Another example is another of our purpose led brands, Lifebuoy, strongly growing.
And here again, we improved the product with new antimicrobial technology using silver ion formulations. And again, we're using local insights to bring that to life. Silver is associated with protection from germs in many countries around the world. But let's take a look at these 2 films, 1 from India and 1 from Vietnam and how we bring the proposition to life slightly differently in different markets. This is the Indian one.
So the silver as an anti germ protection in India associated with silver spoons. And here's the similar film, but this time from Vietnam where you'll see is a different use of of silver as an icon of germ protection. Life with local relevance. It is true that the global PC market has strong growth, very clearly evident. 1 rooted in a macro trend is around naturals.
Now about a quarter of the global personal care business or categories can be described one way or another as naturals and it's growing at twice the rate of the global PC category. And we are underrepresented. So we made a conscious choice 18 months ago to really accelerate our naturals platforms, extending our brands into natural spaces, rolling out more aggressively brands like Simple, which are very clearly positioned on the Naturals platform and even introducing a couple of all new Naturals brands, which we'll share with you in a second. And as a result, we're now finding that our Naturals portfolio is growing in double digits twice the rate of the overall market. And so we're closing that gap to fair share in this high growth segment.
And there's similar stories in therapeutics, the intersection of personal care, wellness and pharma where again we've prioritized therapeutics for stepped up investment and innovation. We're rolling out the therapeutic brand in our oral care portfolio, Zendium. And this month actually here in the U. S, we will launch a new platform under Dove, Dove Derma Series, bringing together prescription strength products with fantastic sensory properties to help women who suffer from chronic skincare problems such as psoriasis, dermatitis, eczema and so on. So we're playing quite aggressively now in this therapeutic space.
And many of you will have heard me talk about male grooming before. It's a €44,000,000,000 category. It's growing at twice the rate of the female market. And we are very, very well placed with Dove Men Plus Care, with our biggest global brand, AXE, with some specialist brands such as Rexona for men and Clear for men, and of course with the Dollar Shave Club, which you'll hear all about from Michael tomorrow. By the way, I didn't like Andrew describing tomorrow's session as the entrepreneurial part of the business.
We consider all parts of Unilever to be highly entrepreneurial. So you'll hear about Dollar Shave Club a bit more from Michael tomorrow. Here we offer Here, we offer moms functionally superior baby skincare products differentiated with very emotional communication that many of you will have seen as we roll it out. It's a very different business model. You need to re recruit your users every 2 years, but the business is doing very well.
By the end of this year, it will be in 30 countries globally. And by the end of next year, it will be fully extended into 40 different markets. The leader of our Prestige business, Vasiliki will take you through the progress on our Prestige platform tomorrow. Suffice to say, we remain very committed to this faster growing part of the PC business. We're well on our way towards delivering our €1,000,000,000 ambition And we're also starting to see examples of trends trickling down from our prestige portfolio into our mass portfolio, which is part of the rationale alongside growth of entering this space.
Really there are 2 channels with huge growth potential that we're putting our focus on. The first is called Health and Beauty, previously sometimes known as the drug channel or the pharmacy channel. It supports a couple of different types of consumer shopping journey. It's where people go for a lot of personal care top up shopping, but it's also by far the most experiential channel. This is where women go to find out what's new, to experiment, to try new products.
And so it's a very important venue for us to generate awareness and trial of our brands. It's also a particularly fast growing channel. And the other of course is e commerce, important not just as a route for selling, but as a very important platform for building our brands. Now putting some data around this, health and beauty will grow from about 16% of our business last year to 20% of our business in 2021. And e commerce, although currently 4% of our turnover, is growing this year for personal care at 93% year to date.
So that's 2 to 3 times the global growth of PC and e commerce and will grow to become about over 10% of our turnover by 2021. And this won't happen by accident. We need to deliberately resource ahead of growth, ensure we have the right portfolio, ensure we have the right marketing activity to win in e commerce, a very different type of business model. And these two channels together will deliver 70% of our growth over the next 3 or 4 years. Speaking of e commerce and digital, we are increasingly doing e commerce only or e commerce led launches.
So the one in the middle here is the launch of Axe Skincare for men as an e commerce exclusive launch in China. Of course, much of our communication is tilting into digital. Luis will talk about that tomorrow. In personal care, we're already at 32% of our media spend going through digital channels. That's ahead of most of our competition.
Although I can't help feeling that our industry is barely keeping up with the consumer, that the consumer is moving very quickly and we have to benchmark the speed with which we digitize our business against the consumer and not the other players in our industry. And digital technology, of course, allows whole new business models, most famously at Dollar Shave Club, which continues to do well and from which we've learned a lot. You'll hear more about that from Michael tomorrow. But let me, on that note, share with you how we're developing some of our own digitally enabled new business models. So on the left there, you see a new brand that we've launched in North America in beta mode.
It's called Skinsay. It's a personalized direct to consumer skincare regimen. And I think probably the best way to explain it to you is to run this short video. Dollars 55 Anyone want to sign up? We're taking customers.
No takers? Look, this is using really the latest thinking on business models, direct to consumers, diagnostic driven, subscription model, completely personalized. We've launched it also in a kind of Silicon Valley mindset. We've launched with a minimum viable product and beta testing. Will the eventual scale up look exactly like this?
No, I highly doubt it, but we're in a strong learning mode right now. And of course, this has been highly informed by what we've taken away from working with the Dollar Shave Club. At the same time, we need to keep upskilling ourselves. And this week, we announced the opening of our new digital disruption center in downtown Manhattan. This will be a facility where we will host project teams and residents for digitally led products.
We'll stay at the cutting edge of technologies such as voice, which we think are going to have a big impact, and where we will run some of our digitally led brands such as SkinSafe entirely out of. So we really want to make sure that Unilever is staying at the forefront of the digital transformation that's happening in our industry and in our world. So speaking of the world changing, I think the overall theme that you're going to hear from lots of the speakers today and tomorrow is one of fragmentation, consumer fragmentation into massively more segmented markets, channel fragmentation, media fragmentation and competitive fragmentation. And I think one of the changes versus where we were when we spoke to you last year is that we now see this as an opportunity not a threat. And the mindset shift that you have to make to accept that is that the notion of us winning in such an environment with a handful of global brands in a purely global portfolio is frankly far fetched.
So geo fragmentation has given rise to successful local brands, very targeted and moving at speed. It's now possible to target much more narrow groups. And the example in the middle here is it's not from Unilever. It's a German blogger called launched a brand called Belu that became the number one skin cleansing product in the DM drug chain in Germany. It's the kind of example of things that we are now doing and I'll give you some for instances in a second.
Our whole new business models, Blow is an on demand hair, makeup and nails service at home. Think of it as Uber for beauty, started in London. And in this instance, Unilever is in an ownership position. We've done it through Unilever Ventures because it's too early stage to bring into our main business. And so Unilever Ventures have invested a significant position in this whole new business model.
So we see this fragmentation now not as a threat, but rather as an opportunity unlocked by Connected for Growth. So yes, we're very proud of our big global brands. Dove continues to grow above 5%, our biggest and most important brand in our portfolio. And we're having a new love affair with some of our strong local brands. So for example, LACMA here is the market leading iconic Indian makeup brand and it's growing over 16% so far this year.
But we're also moving faster on trends and you'll be able to see on the table in front of you a brand that's launching next month. In fact, it's meant to be embargoed talking about it, but we broke our embargo for today. Love, Beauty and Planet, millennial focused, right on the naturals trend, developed entirely in house using almost exclusively digital insight and research methodologies. Or on the right hand side there, Keju, it was a fast track launch in China, co created with a French perfumer and a Korean graphic designer. And it seems to be off to a great start and that was launched start to finish in less than 6 months.
So we're really starting to see opportunity in localization, opportunity and speed. And speaking of local agility, here's a couple of examples of acting quickly on local trends. So in India, we've recrafted and launched Ayush across 4 categories offering Ayurvedic beautiful products. We tried that in 2 provinces initially in India, 2 states sorry, and it's now rolling nationally. Or in the middle there, our Impulse fragrance brand where we co created with German blogger and a U.
K. Blogger, actually 2 bloggers in each country, a limited edition impulse variant. Will it be around for 10 years? Probably not. But we're doing these with business models that have positive PBO, positive profitability from day 1.
And the third example here is we had a gap in our hand and body lotion portfolio in Indonesia in the lower priced Tier 3 space. And we have a very strong team in Indonesia, so we empowered them to develop the mix to compete in Tier 3. They borrowed the Pureline Naturals master brand from Russia of all places and developed this proposition, Hijab Fresh, that obviously taps into the modern Muslim sensibilities, developed and launched within just a few months and off to a tremendous start. So some examples of where we are really using C4G to allow our global brand and consumer insight teams to work with global R and D, but led by our local markets. We are going to continue to evolve our portfolio.
You catch the headlines when we acquire things. So things like the Carver Korea launch sorry, acquisition, the Quala acquisition, Hourglass or this week, our exciting acquisition of an ethnic naturals brand Shea Moisture. So yes, that catches your attention. But we will also this year launch at least 4 organically developed new brands. I've mentioned most of them, Ayush, SkinCe, Love, Beauty and Planet, the one I haven't talked about is called Apothecare Now, very premium priced, naturals positioning, beautiful, beautiful products, again launching 1st here in North America in a limited distribution model.
So you probably can't remember a decade where we launched 4 new brands in personal care, far less a year. And this is a pace that we need to continue with. However, it has to be done using a P and L and business model that does not distract resources away from our core business, which remains our number one priority. And we think we've cracked that. We are pretty confident that we've found ways of doing that.
So in summary, we're evolving our portfolio by strengthening our core brands on their core propositions, prioritizing some higher growth spaces such as naturals, driving adjacencies and new business models and growing through altogether new brands that we develop and launch ourselves. But all this is really unlocked and enabled by Connected for Growth, where we're acting more quickly on global and local trends. We're turning fragmentation into opportunity. And we're really re empowering Unilever's local companies. If we do this well, we think we're well placed to compete and win in this rapidly changing, rapidly fragmenting, but exciting world full of opportunities.
So thanks very much for listening. I've timed this perfectly because we've got 1 minute and 36 seconds left for our question.
No, it's
all right, Andrew. I don't want to screw up your agenda. So any thoughts, helpful suggestions, criticisms or questions? Yes.
It's Warren Ackerman at SocGen. Graham, at the beginning, said that the number one priority is growth. But obviously, you showed us the growth has slowed down. You said that you're disappointed by the 2.4%, and your ambition is to get back to 4%. Can you maybe share with us how quickly you think you can do that and what needs to happen for you to get back to that kind of level?
And then related, can you maybe share with us why you think growth has slowed in PC?
Yes.
You told us many examples of things growing double digit. What's actually going backwards?
Yes. So I anticipated this might be the question that came up. So thanks for asking it. So I have to be careful in answering this question not to make any forward looking comments or statements. I did mention what the big drivers are.
So the slowdown in the market growth, we believe, is cyclical and not secular. We're pretty confident that markets will start to come back. Secondly, I mentioned 2 big important countries in PC that have slowed down dramatically this year, Indonesia and Brazil. Frankly, if they were growing at their normal rates, we'd be having a very different 4 plus percent type of conversation. Thirdly, I mentioned that we would that we are also facing competition from local players.
The first two on market growth and on local players, I think are temporary sorry, on market growth and country slowdowns are temporary situations that will come back. The pressure from local players who have been gaining market share at the expense of the global players is not a short term phenomenon. And that's why you'll see that a lot of our response to this global slowdown and the thing I've really concentrated on in this presentation is a step up in our local agility. I'm not going to give an exact date of when we'll be back above 4% growth for obvious reasons, but I don't think I'd be standing here with this tone and this cocky, relaxed position if it wasn't going to come around quite soon. Do we have time for one more question?
Yes.
Okay, sure.
Thanks. I have 2, if that's okay. Last time you stood up at the seminar last year, you said that you thought Personal Care would be growth accretive to the group. Do you still think that's possible given what you said? And then secondly, at the beginning, you mentioned one of the things you didn't want to focus on was that pricing has become more difficult to get.
Is that because of the local competition you said? Or is there something else going on?
I think those are 2 very related questions. It's very clear in our business model that PC, our role has to be accretive growth to the group. And one of the reasons why I'm confident on that is we're already at extremely high levels of margin in Personal Care. There is room for further improvement. But in PC in particular, as we unlock efficiencies with 5S and ZBB, which have really taken hold in the business, that money will flow back into driving growth very clearly.
And in our first half results, you can see there was a big step up in margin on Personal Care. That's partly phasing through the year. And as this year goes on and into next year, I'm very confident that our financial growth model will allow stepped up investment in PC that will unlock some of that growth. Another unlock will be the particular profile of commodity increases over the last 12 months has made it hard to take price in Personal Care. We're anticipating an environment over the next 12 months where commodities will not be as benign.
There will be more inflation, and that will reintroduce some of the pricing led growth that's not been evident in our business. You'll have noticed that we had quite good volume growth in a low overall growth quarter in Q3. The volume growth in PC was reasonable and the issue was lack of pricing and I think that'll change moving forward. Okay? So with that, I am going to wrap up because I'm 3 minutes over just to say thanks very much.
Look forward to engaging with you over the rest of this conference. And now happy to hand over to my friend and colleague, Nitin, to talk about our Home Care business. Nitin?
Good afternoon. It's a delight for me to be here today, following up from what Alan has said and listening to him talk about our plans for 2017. I just get the feeling that there are a few terms that you're going to hear again and again through the 2 days. It's about growth, it will be about 5S, it will be about ZBB and it will be about C4G. And these themes might run through a lot of what we are going to say about.
Now what I'm going to do over the next 25 minutes or so is to give you a sense of the Home Care strategy that we had spoken of in 2014, the progress that we've made since then, but even more importantly, share with you why I believe that the business is very well poised to address the challenges and opportunities that we are likely to see ahead of us. But first, let me remind you of what we have said in our strategy. At the end of 2014, many of you would remember, we were at a stage where the home care business had been doing very well in terms of growth. In fact, if you take a 5 year period or so before 2014, we were growing at a CAGR of over 6% per annum. That's a wonderful rate, growing ahead of the market every single year, growing market share.
However, you would also remember that at that stage, the margins of this business were low. And that low profitability that we had at that point in time was largely on account of some very conscious choices that the business had made, conscious choices to correct for years of underinvestment that the business had faced to fix the underlying issues of the business. And that's what we had done. But somewhere in 2014, we came to the conclusion that the period of correction that underinvestment phase is over. The business was strong and it was time for the business to embrace a new role, a new role which meant that it now needed to deliver strong value creation as it went ahead.
For that, we put in place a strategy, that strategy we had called simply winning today, winning tomorrow. And that strategy really meant that we had to remain. We had to remain focused on the things that had worked for us, which is what I would call the brilliant basics or the fundamentals of a consumer goods business, which is focused on product quality and the investment in our brands. That is what helped us and that we had to continue. But even as we did that, we had to have an eye on the future because the world is changing very, very rapidly.
We had to future proof this business by identifying those pockets of future growth, be it benefits, be it channels, be it geographies. That was the 2nd leg. And the 3rd, of course, a relentless focus on cost, end to end cost to step up margins at a pace that we hadn't done before. That is what we have said at the end of 2014. As we stand here towards the end of 2017, I'm really happy to report that when you look at the results that we've got in this period, you have to say that the strategy has been working for us.
In this period, we've been growing at a CAGR of 5%, ahead of the markets. Markets have been slowing down, and we've continued to grow ahead of them. And as you would see from these charts, continued to grow share year on year. But what is even more heartening is the fact that we've managed to do that with a step up in our margins. First half two thousand and seven operating margins of just under 12%, and there's a big step up from where we were just 3 years ago.
And the experience that we've had over the last few years gives us the confidence, confidence to get to the 16%, which is what we said we would get to as a part of our strategic review, which was announced in the month of April. Now this performance is underpinned by a few factors which work for us. The first and foremost is the quality of our brands, The strength of our brands and our portfolio, strong brands, iconic brands, brands which are household names across the world and that's helped us, be it in fabric cleaning, fabric conditioning or household care, really solid portfolio is what we've got. But even more, not in addition to this portfolio is the geographic footprint that we have. You saw Graeme talk about the fact that Unilever is 57% in the emerging markets and we know the value of that.
When you look at home care, 80% of our business happens to come from emerging markets And not just 80% from the emerging markets, which of course has its advantage, the fact is that we have very strong positions in most of these emerging markets. 7 out of 10 were leaders and leaders by a mile in many of those markets. Now we all get the value of this footprint. But I have to say, as we started looking at this more closely, as we started carrying out an exercise as to where will the pockets of future growth be, and we did a quantitative modeling exercise to understand this through the lens of geography, through the lens of benefits and through the lens of channels, some very revealing things came across. If I was to give you a sense of what it means to the lens of geography, we were pleasantly surprised by what we found.
Over the next 5 years, more than 85% of all market growth will come from the emerging markets. Not just that, if you look at it a little more closely, 40% of all growth will come from 2 countries, almost a quarter of that coming from one country alone, which is India. That's revealing. What is even more revealing is when you look at countries, which are seemingly small countries like Philippines and Vietnam, each of those countries in terms of incremental market growth would be the amount of incremental growth that you could get from the United States. And Nigeria and Pakistan could give you the same incremental market growth as Brazil.
It's important for us to understand this because it tells you that there is a very, very significant advantage because we are very well placed in general across all emerging markets. Yes, there's a job to be done in China, but otherwise, we are very well placed to address opportunities of course coming forward. So that was a look through the lens of geography. Let's have a look at where that future growth will be when we look at it through the lens of benefits. Now if I take the example of laundry to illustrate this point.
Now seemingly niche benefit spaces like care, like hygiene, like naturals, like eco friendly, seemingly niche benefit areas, they are likely to grow at over 2 times the rate of other benefits like stain removal, whiteness and fragrance, the space that we focused on thus far. Now I'm going to touch upon just 1 or 2 of these to give you a sense of what it means. Take sensitive. Now we all know that there are more and more people who are concerned about the effect that they have. They have sensitive skin.
They're suffering from allergies. Research suggests that that number in markets like the United States and in Europe would be about 10%. But research also suggests that if you ask people about this question, almost a third of people believe that they have sensitive skin and therein lies the opportunity, the opportunity for our own brands to have extensions and offer products which actually address this, but also opportunities for specialist brands like Neutron, which are focused around the space. And it's a brand which has now been extended to 11 countries and in my view has the potential to go across many, many more countries. Or take the case of naturals.
We know naturals is a big trend. We can see that growing everywhere. It's small today. But it might be small, but take a market like the U. S.
Or Europe, it already accounts for more than 50% of the total growth of that market. And that's the thing that we have to understand at this stage, yes? And while we may have offerings of our core brands, which can move into this space, the truth is our portfolio lacked. Our portfolio lacked a brand which was truly natural in its core, in its genesis and how it was founded. And that's why the acquisition of 7th Generation was such a strategic acquisition for us and we will look to see how we can extend 7th Generation to other parts of the world.
Let me move on to the 3rd leg. I said we looked at future pockets of growth through 3 lenses: geography, benefits and channels. It should come as no surprise to any of you when you look at this, when you find out that when I say that e commerce will be the fastest growing channel, fastest growing channel by far. But what is surprising and certainly surprised us as we did this work was to let us realize how significant it could be in how short a time period. We believe €1,000,000,000 opportunity for home care alone in the next few years.
What is also revealing is that the bulk of this opportunity is likely to come from the top 5 or 6 markets. Equally, while grocery online, the traditional stores moving into online sales will be important, the biggest disruption will be from pure play retailers like Amazon and Alibaba. And that really means for a business like ours, as Alan said, we have to start investing in capability building. We are investing ahead. We are doing a lot of work to understand the needs of this channel, build capability and also start thinking in terms of how we can innovate for this channel so that we start winning in the space.
So with that, hopefully, the actions that we are taking to shift our portfolio into the benefit spaces of tomorrow to address the channels of tomorrow and of course aided by the fantastic footprint that we have, our geographic footprint, I believe that as a business, we are very well poised to continue the wonderful growth momentum that we've had over the last 7, 8, 9 years, where we've continued growing well ahead of the market, we should be able to do that in the years to come as well. But that is only one part of the story that was there. The second part is, what do we need to do to step up our margins? Now many of you have heard 5S. 5S, a program that was launched over 2 years ago, just under 3 years now, where we've been driving this, a program that has delivered wonderful results, a program which is much more and I highlight, a program which is much more than just the conventional cost saving exercise that every company undergoes, a program which looks at end to end costs far more holistically than we've done before.
That has delivered great results is here to see. But this program and I'm going to just give you a sense of a few things that makes this program more than just a conventional cost saving exercise. Now, helped by tools like design to value as we call it and design to value is essentially a very forensic exercise and a look at cost. And we look at cost through a lens of what does it cost us, But for that cost that we are inputting or incurring into the product, what is the value that a consumer will attribute to that cost which is incurred. Wherever the cost incurred is higher than the value received by the or perceived by the consumer, that's an opportunity for you to think again and see how you can save and alter that cost structure that we've got.
Or indeed, a strategic Partner to Win program. Now we've been running a partner to win program for several years. And over the last 2 or 3 years, we've seen the huge value that we get out of that by leveraging on the enormous capabilities that these partners have, by accessing new technologies in packaging or alternative surfactants or just weight efficient ingredients which have now come up which our partners have capabilities in, By accessing those, we found an enormous opportunity to save cost in this period. Now while we do all of this, there is another aspect which consumes cost in the organization, which is the hidden, unwanted, non value added complexity. 3 years ago, we started talking about this drive for simplification.
Simplification in a way that does not compromise the consumer value that you add and yet is dramatically simplifying our own operations and reducing costs. We had a belief that we could dramatically reduce, dramatically reduce the number of product formulation chassis, the number of packaging options, the number of ingredient specifications that we have and reduce all of that without compromising the consumer experience. Over this period, you can see we started off with laundry powders and moved across to toilet cleaners and liquids where we are between 50% 60% already in terms of the reduction that we've had. But and on an overall program when you extend it to everything else, you've already reduced 40% of the hidden internal complexity, which did not add any value to the consumer, has been removed. All of this starts contributing to the savings program that we've got.
Last but not the least, I want to talk about ZBB and NRM. Now while the 5 S program helped us focus on product cost, yes, the ZBB program enabled us to focus on the marketing investment, the logistics and indeed the overhead space, which is there and Mark is going to talk a little bit more about that space. But if you take the marketing spend, I think it was revealing. Just the exercise that we went through demonstrated that there was an opportunity for us to save not just in promotions which didn't work, but in terms of the assets which we produced. We discovered that less than 5% of the assets that we produced were worn out, which meant that they'd finish the effective life that they had, less than 5%.
What it means is that we can reduce making new assets. We can run them for longer and running the same asset effective assets for longer is actually has plenty of benefits. It improves consistency, strengthens memory structures for the consumer and saves production costs. In media, we found enormous benefits as well. We found in several markets, we were oversaturated and there was an opportunity for us to cut back without compromising brand measures.
And those the results, like I said, you can see out here. On net revenue management, again, a really, really powerful capability that we've started building across the organization. Now in layman's term, net revenue management is simply the art and science of pricing. When you get it right, of course, there's a lot of detail and a lot of science which goes into this. But in the end, when you get it right, you uncover smart opportunities for pricing.
And a smart opportunity of pricing delivers 2 things. It must give you incremental turnover and it must be margin accretive turnover. That's the value of running a good NRM exercise. And as you can see, as we've run that across 15 markets, both in laundry and in HFC, we've already discovered the opportunities to drive margins and turnover along the lines that you see out here. So that really was the strategy that we were trying to drive over the last few years.
In many ways, like I said before, the strategy that we had put in place was working. It was delivering the outcomes that we wanted. But there was something else that happened in this period, which in my judgment will be the most transformational outcome for us and take us to the next level. Along with driving the strategy, which was based on winning today, winning tomorrow and the 3 pillars that you see out there, around 2 years ago, we started thinking about the organizational transformation, which Graeme referred to and Alan spoke of, which was Connected for Growth. Connected for Growth is really that one change, that transformation, which gives us the edge.
It unleashes the unleashes the potential across the organization by creating a seamless organization, a seamless marketing organization and an organization which provides clarity helps us decide clearly who does what, drives empowerment, enables us to be more global, more local and more agile, something that every organization aspires to be, particularly in the world that we find ourselves in. Now you've heard of this. I want to give you a set of some examples as to how it's added value for us. And if I was to take this organization, I would the first thing I would say is the beauty of that one seamless marketing organization has, amongst other things, provided us clarity. Clarity in terms of who should do what.
And the who should do what has been based on who is best placed to do that. So if I was to take a global organization, global team frankly must not focus on anything other than the things which absolutely benefit from scale or expertise, things that no one else in the organization can do must only be done and can only be done by the global team. And there are several examples of that. So be it the work which we need to do on our brands, the thinking about our brand, the key, the point of view that our brand needs to have, the purpose that our brands need to stand for, embody and take forward. That's something that cannot be done differently across different places.
And yes, when a global brand team will think about what this is, the manifestation of that and the expression of that will be very local so that it resonates in the markets. But the conception of this has to happen at a global level. Or indeed, breakthrough technologies, which can power our innovation stream, benefits from expertise and benefits from scale. The best example of that is the one on the right, which you see, which is Persil Power Gems. Now Persil Power Gems was work, which was done over years by people in R and D Labs and our marketeers put together and they've come up with a new format, a new format in laundry, a totally disruptive first to the world format.
And this format marries the benefits of a powder and a liquid together. It offers incredible cleaning to the consumer and it's wonderful for the consumer, but it's also wonderful for the planet. It removes all the fillers in the stuff which didn't do any of the cleaning. It dramatically improves the greenhouse gas profile of the offerings that we've got. Now these are the sorts of technological breakthroughs that have to be done and run at a global level.
And that's really what the global team focuses on. But if I was to then now shift gears and to say what's happened as far as our local markets are concerned. The one marketing organization has meant that our local teams are far more empowered. Work has shifted and decision making rights have shifted and some resources shifted to allow us to be more connected with what's happening in those local markets, allowing our people to respond well to the needs of the local market as well as the competitive changes that are taking place. This chart is just a set of a few examples, few amongst tens of examples that have taken place over the last few years last year or so, which demonstrate how we've unleashed creativity and innovation across the organization.
So be it a fragrance variant that you might have launched or indeed the extension into a new benefit space, extension into a platform, the skin friendly range in China that we've got again a wonderful example. Here is the skin friendly range of comfort inspired by a local need, endorsed by local dermatologists, etcetera, brought into the market with an idea to launch in a 6 month period. Or indeed, the example that you see of a new brand which got launched, a new brand called LiveOpen was put into the market in Argentina, which really leveraged and took open innovation to a completely different level. It looks at us exploring an entry into a large relevant new market of insect repellency. And in Argentina, we are exploring whether it is possible for us to have a differentiated offering and a differentiated play in that market.
That's really what's happened there. So as you would see here, Connected for Growth is unleashed speed, innovation and agility and enabled people to do things locally for sure. But the real value of Connected for Growth is more than addressing local needs. The real value of this is the opportunity for us to have many ideas that we see. Some of these ideas and local innovations have the potential to become global ideas.
They have global scale and can be picked up and rolled out across the world. And I want to refer to the last example that you see here, which is SIFT Duo to illustrate what I mean when I talk about that. Now the SIFT Duo was an idea which came up in Italy, but there was a team that says, won't it be wonderful if you can take the Sift spray and see whether you can allow the consumer to get the benefit of a spray and a form, but through one bottle, one trigger mechanism without making any change. Wouldn't that be great? It provides the versatility, allows consumers to use it differently on different occasions and would be a great value add.
That idea was brought to life working with local third party resources and packaging and a clever idea which involved a slight manipulation and a change in the nozzle enabled us to actually deliver both. When this idea came to light, it was clear that this is an idea which must go beyond Italy and over the last several months, we've rolled it out to 15 markets and can potentially go even further. So hopefully, this gives you a sense of how Connected for Growth is driving the transformation that we feel so strongly about and can make a difference for us. So in a way, that's really all that I thought I'd share with you. I'd look to summarize what I've said.
Home Care had set out a certain strategy at the end of 2014. It was a strategy which was looking to drive value creation after having recognized that we had finished the period of investment. Now is the time for us to drive competitive growth ahead of the market and demonstrate that we can do so with a sharp step up in profitability. ACT results over the last few years do show that it is possible for us to do that. And more importantly, the experience that we've got in this period gives us the confidence that we can get to the 16% operating margin that we've spoken of at the strategic review because the more we dive into the space, more we see there is plenty of runway ahead of us through 5S, through ZBB and through the other initiatives that we are talking about.
While all of that was the outcome of the strategy that was put in place, nothing has enthused me more than the C4 gs initiative that we launched, genuinely a transformational initiative and in my judgment will allow us to try and get to almost the Holy Grail that every organization hopes to achieve, which is how do you get the benefits of scale while retaining the fleet footedness, the agility, the nimbleness and the focus in local markets with local consumers. That's really we are well on our way and there is much more that we need to do to fully realize that opportunity. But like I said, well on our way. That's really it for me and thank you very much. We have about 5 minutes more for any questions that you might have on this.
Yes.
It's James Edwards James from RBC. Where did those market growth forecasts that you're talking about come from? And what are the absolute levels that are implied in there? Obviously, if you're making comparisons with the U. S.
And Brazil, it depends on what those markets are going to grow. And I think there's quite a lot of doubt about that.
For sure. So we have an internal modeling exercise. We have a team which studies market growth. We have our internal factors which determine it. But 2 of the biggest factors that drive this, there are many factors in this model, is population growth, GDP growth assumptions, which we've picked up from many areas and the shift that happens as a result of other factors like the increase in women moving into the working class, urbanization and other drivers.
Putting all of this together, we have our own models to determine what sort of market growth are we likely to see. And using those models, these are the conclusions that we've come to.
Thank you. You outlined a lot of steps you took to get this dramatic margin expansion over the past 3 years from here to get more margin expansion. You spent a lot of time talking about getting faster to market with innovations. Can we fairly interpret that a lot of the margin expansion to come is just from mix, selling more premium, more profitable products?
I think mix has a role to play. But like I said, the experience that we've had in our 5 years journey and in our ZBB journey tells us that there is plenty of runway ahead of us to drive inefficiency and cost out of the system and improve our margins. So yes, mix has a role to play. Innovations have a role to play, but simple acts of efficient management of cost and elimination or non value added complexity will contribute substantially. Okay.
Thank you very much.
So thank you very much. And sorry, Georgi Baggett. Sorry, Baggett. So we're going to take a 10 minute break now. There's some refreshments over on that side of the room, so please do help yourself.
And we'll aim to start back here at half past 2. Thanks. Okay. If everybody could take their seats, please, we'll get started in just 2 minutes.
Good afternoon, and it's great to be with you today. Kevin and I are going to do a shared presentation on Foods and Refreshment. I'm going to open. I'm going to give you an overview as to where we are on the integration of these two categories and then I'm going to talk food specifically. And then Kevin is going to talk about the refreshment category and then wrap up for Food and Refreshment, and we'll leave some time for questions at the end of our session as well.
So let me start just by giving an overview of our Food and Refreshment category and talk a little bit about the rationale for why we believe it is such a good idea at this time to put the 2 categories together, which is obviously something that you heard us announce coming out of the strategic review in April. We have a €20,000,000,000 Food and Refreshment business. That actually puts us within the top 7 peer companies in the world. We've got a phenomenal portfolio of so around €6,000,000,000 of it is in the savoury category and about 15% of the business comes from each of dressings and from tea. By putting the businesses together, and you can imagine that there are a lot of similarities when we're talking about food and refreshment, particularly as far as things like consumer trends are concerned.
Then we're able to more dynamically allocate our resources across categories. The biggest single cluster for both food and refreshment is Europe. And by putting our businesses in Rotterdam adjacent with our European business, we can obviously have stronger integration and synergies. And also very importantly, we've got a very strong food service business, our Unilever Food Solutions business that is already in Rotterdam and that we will be co located with. And I'm going to talk a little bit later on more about our UFS, Unilever Food Solutions business.
You probably also know that we are in the process, in fact we have already started to break ground on what we believe will be a truly world class R and D facility co located on the campus of Bargaining and University. And I know that I've got quite a U. S.-centric audience today, but I will tell you that Bargaining University is considered to be the world number one academic institution when it comes to agri technology now as well. So that's a very exciting opportunity. But just some of the key reasons why it makes sense not only to put these businesses together, but to be co located in the Netherlands as well.
We also said in April in the strategic review that we saw the opportunity through integration to be able to have a very distinct operating model for the foods business at a reengineered cost base. Basically one that says it's going to be aligned with what it needs to be able to do as a food and refreshment company and at the same time take the benefits of scale and of the corporate capabilities of Unilever. So working on 20% lower overheads than we did in 2016, 16 as well as leveraging programs such as 5S and ZBB to get to a 21% operating margin in 2020. This is a business that importantly has got a very strong emerging markets footprint. So 46% of this business is in emerging markets.
Now that might sound low. It is lower than the numbers that both Alan and Nitin have been talking about today. But I think you'll find that if you benchmark that against a peer group of food and refreshment businesses, this is an extremely strong number indeed. But Kevin and I will be talking more about that as we go through the presentation. This is also a phenomenal portfolio of brands.
You've heard a lot today about the themes of global and local. And again, in Food and Refreshment, we have what we believe is a true powerhouse stable of brands. We've got 5 brands, which are global and are over €1,000,000,000 And then we have got a stable of truly iconic local jewels. And you'll see again shortly how some of those are brought to life. Some of you who are part of the Investor Relations event that we had 2 years ago in Southeast Asia will know, for example, the BANGO brand and what a phenomenal local icon that is in the Indonesian market.
But I could say the same about Kissan in India or about the Robertson's brand in South Africa, just to name a couple. This portfolio provides us importantly also with leadership in ice cream, in mayonnaise, in ice in savory and in tea. We've designed the new food and refreshment organization. The leadership is announced and it will be in the very capable hands of Nitin. But not only has Nitin been announced, but the top team to run food and refreshment has also been announced.
We are on track as far as the process of the divestiture of our spreads business is concerned, again that we announced coming out of the strategic review. And we are also all set to start relocating our food and refreshment teams into the Netherlands starting in January with the intent to be complete with that process by August of 2018. So let me shift now to talk specifically about foods. And those of you who have heard me present before, heard me talk about what it is that we are trying to do in foods. And that is to serve our purpose of food that tastes good, does good and doesn't cost the earth.
We have a much more focused and arguably much more competitive foods business than we had. And so if we could just go back for a moment to 2,008, we had a foods business that was actually bigger than the business that we have today. It was €14,800,000,000 compared to the €12,500,000,000 that we have. But it is also a portfolio where we have divested €2,900,000,000 worth of turnover, a lot of it Kees will be touching a little bit on that tomorrow. But I think you can Kees will be touching a little bit on that tomorrow.
But I think you can see in the pie chart that where the big change in that has come is that we have now focused the business very much against our core categories of savory dressings and spreads. And that other part that was 16% of the business in 2,008 was only 6% of the portfolio in 2016. This was a business that was also for legacy reasons as far as our portfolio, but also I think because of the nature of packaged foods and the development of packaged foods globally beyond just our categories that was very developed markets focused. So again, going back to 2,008, 30% of the business was in emerging markets. If you look at where we are today, it's 44%.
If you look at our top line numbers for the 1st 9 months of this year, 46% of our business was in emerging markets. And if you take out the spreads business out of that equation, then 50% of our turnover on the go forward foods portfolio as of the 1st 9 months of this year was in emerging markets. And I will talk more about emerging markets again, one of the big themes that we've been running through this afternoon. It's a business that's more competitive than the business that we had before. We've gained 90 bps of market share since 2014 in our savoury business and almost twice that as far as dressings is concerned over the same period.
Importantly, we have delivered a step up in underlying sales growth. And those of you who followed our foods business carefully will know that in 2014, we had a business that was in decline. We turned the corner on 2015. We had a step up in 2016, delivering 2% growth overall, but very strong performances from savory and dressings. When you look at our numbers through the 1st 9 months of this year, then we're at 0.9% growth.
So a little shy of where ideally we would have wanted to have been after that 9 month period. But again, and very important caveat is to say that if you take the spreads business out of it in the 1st 9 months of this year, then we were growing our portfolio at 2 point 2%, which against the backdrop of foods globally is a competitive performance that we've had there as well. This might look complicated. It's actually a very simple framework that we've got. I talked about what our purpose was before, but when you think that Unilever is about making sustainable living commonplace then as a foods business that what we are trying to do is really to make sustainable nutrition commonplace.
Is all of our portfolio from a consumer perspective perfectly in the bull's eye of that? I would be the first to say no. Are we shifting there? Yes. And I think that when you look at our renovation and innovation program, you can see that.
And similar to the other categories that you've heard about this afternoon, we're focused on growing the core of our business. We're focused on evolving the portfolio, particularly critical for the foods business and obviously around developing our channel footprint further. Growing the core is about continuing the growth journey that we've been on in emerging markets, renovating our core brands and products. Evolving the portfolio is about the innovation spaces that we're entering into, but it is about the portfolio and acquisitions that we've had. You'll have noted that we have had the first two acquisitions in the foods category since 2,009 and I'll touch on those shortly.
And then I'll talk more about developing channels. And obviously, all of that underpinned by the work that we are doing to drive savings with 5S and ZBB and obviously enabled by what we believe will be a world class food and refreshment organization in terms of the capabilities that they will have to drive this portfolio. So growing the core, and this really starts with what it is that we're doing in emerging markets. If you look at the period 2014 to 2016, we've grown our emerging markets foods business at over 7% CAGR. It's just a little shy of that for the 1st 9 months of this year and just over 6%.
We talk a lot about global, but I think this really matters when you look at the fact that within our portfolio, about half of it is in the global brands of NORE and Hellmann's and 50% of it is coming from these truly iconic local brands. And very much enabled by the very deep Unilever route to market capabilities that we have in the emerging markets. And by the fact, as again you've heard several times already this afternoon, by the fact that we have got teams in market that are fully empowered to make the right decisions for their local markets so that we're attuned to consumer insights. And importantly, obviously in this category to particularly consumer food, tastes, cultures, preferences, etcetera. There are also teams that are truly connected to our global teams as well.
And so in that way, we really bring the best of our global scale and insight to bear together with the best of our local intimacy as well. I could probably talk all day about the capabilities that we have and the strategy that we have in emerging markets. But I thought that one way to bring this to life would be just to give you a snapshot of 1 market. And I'm going to focus on Turkey because I think it's a great case study of where we have been able to both renovate the core and ensure that it continues to be relevant for consumers and at the same time to pioneer new categories in emerging markets. So about this time last year, we relaunched our bouillon cubes, absolutely the heart as you know of the Knorr brand.
And remember the Knorr brand is a brand that is almost 180 years old. And I think a great example of how you can continue even as an old brand to be very relevant in today's food environment and where we have been able to gain market share considerably over the last year. And at the same time, we have launched a new format for that market of ready to heat soup. So I've got 2 films back to back just to try to bring to life how we're actually doing this in Turkey. Let's take a look.
So in emerging market, global and local working together on that, growing the core and expanding the portfolio into new segments for that market. And we have been growing our business in Turkey by just shy of 20% in the 1st 9 months of the year. So hopefully, that just gives you a sense of how we look at the business. Now if we shift to looking at how we evolve the portfolio and that obviously is the name of the game when it comes to developed markets in particular. I think that food has never been as exciting as it is now.
You can probably say that I'm biased in that. But I think that if you talk to millennials, you see that millennials actually Instagram and they tweet their food before they've even eaten it, but never have we had as involved a food generation as we do now. And although you get one particular read of food when you look at it at a macro level, actually when you look at sort of the granularity of growth and dig into that, there are many segments of the foods markets which are growing. And they're obviously ones that I suspect that many of you as consumers are participating in. So areas like all natural, plant based eating, vegan consumers looking for more conscious snacking options that they have the traditional meal fragmenting and it being very much about smaller eating occasions, many of them on the go, etcetera.
And then the rise of particularly dietary preferences, gluten free, obviously extending well beyond the population that is truly gluten insensitive or allergic, dairy free, lactose free, etcetera. So all of these offer us enormous opportunities to be on trend with consumers so that we can serve their needs better. And that is very much where we're focused as far as both our global brands and our local brands are concerned. But if you look at what we've been doing over the last 2 years, we've introduced 100% natural lines within Knorr. We have a portfolio of organic products under the Knorr brand as well as snacking options.
And just to dimensionalize that a little bit more, you can see some of our most recent introductions. You can see actually the third one from the right of me at the top line, a new line of meal starters that we are launching at the moment in the U. S. Markets and fantastic tasting products based on ancient grains. So again, very much on trend.
We have a premium line of side dishes that we also launched in the U. S. Market earlier on this year, 100% natural, also gluten free. And you can see on the bottom some of the other innovations that we have. So I hope you'll agree quite a different looking Knorr to the Knorr brand that we had.
And an important to note, and again, for a brand that as I mentioned is 180 years old, a brand that has been growing at 4% for us. And similarly, if we look at the Hellmann's business, you can also see an old brand brand that dates back to 1912 that is very much part of contemporary eating where we've been expanding into other condiments. And you can see in the ad on the right hand side, our new ketchup launch in the UK, which is sweetened with honey instead of with sugar. And we've also got a variant that is really true to our Unilever Sustainable Living Plan and using the whole crop of tomatoes and having both red and green tomatoes in the product as well. So just a sense of what we're doing and this is a business that has gained more than 100 and 50 bps of market share since 2014.
Connected for Growth has really enabled us to operate with far greater speed as a result of the simplification of decision rights of being very clear exactly as Nitin said for his category about that which can be done locally, needs to be done locally and only that which can uniquely be done at a global level is done at a global level. And I could have also put up hundreds of examples of where we have been beating our own records as far as getting products from inception to launch. And so we're measuring this actually much more in terms of weeks than months, but just some of the ones that I would showcase liquid bouillon launched in Europe in less than 6 months, spices launched into Central and Eastern Europe in a similar timeframe. We've got very flexible models that we're working with. So we have entered into a licensing model for chilled for all of our key brands in the Netherlands, just as one example.
But it's not only about speed, it is also about being able to operate with scale. And that's why I wanted to talk about the relaunch of Hellmann's globally because at least in recent years, I can't find any examples where we were able to launch in foods innovation into 28 markets in 1 year as well. And that is again the power of Connected for Growth. Not only that we're able to go fast because we're doing things for single countries and making all the decisions there, but because we have got connected brand communities and you'll hear more about this tomorrow as well. We have teams that are co developing mix as with the global team being able to take the best practice and roll those through the brand communities extremely fast as well.
We've talked also today about building brand love in a connected world. You've heard us talk before about the fact that our sustainable living brands are growing faster than the average of our total portfolio. And both Knorr and Hellmann's are sustainable living brands. Knorr very clear about its purpose, about people deserving good food. But Hellmann's as part of the relaunch also very clear with the perspective of being on the side of good food.
So let's just take a quick look at this example from Hellman's that gives our point of view on foods.
Because at Hellman's, we're on the side of food.
Interesting. You might not have thought about this a lot before, but free range eggs requires a transformation of the food system. And we are one of the largest users of eggs in the U. S. For Hellmann's.
And so we have driven system wide transformation to be able to bring free range and actually did it in 1 year less than the original timeline that we had. So again, I think an example of us really living the Unilever Sustainable Living Plan because we know that that also it matters deeply to our consumers. We're strengthening our talent and capabilities when it comes to digital so that our brands can truly dialogue with consumers, citizens in a connected world. You'll see more of that tomorrow in terms of some of the specific studio capabilities that we have and our people data centers. Were very much around mobile first thinking.
I know that last year I showed our love at first taste work from that generated more than 100,000,000 views, all in digital, most of it in mobile. And there's a lot of experimentation that we have currently on mobile running as well. Evolving the portfolio, and I did talk very briefly about this earlier on. The Kensington's condiments business, U. S.-based that we announced in April, important addition to our portfolio, very complementary to the portfolio that we've already got, but able to tap into some of the spaces we didn't believe that we could get to with the Hellmann's brand.
And then a brand that you may know less about, Miterra, that means literally in Portuguese, Mother Earth that we announced in October. This is a business that's very much around organic or natural, non GMO brand that represents or respects rather the biodiversity of Brazil and a brand that's very much about taste and love. So we're excited to have these in the portfolio to be able to grow these businesses with their founders and equally to bring the insights and the capabilities from them into the core of our foods category. I talked on the strategy chart about the importance of developing our channel footprint. That's obviously about driving e commerce, but it's also about leveraging the great expertise that we've got in foodservice.
And this is a business that we haven't talked that I recognize a lot to you about in the past. It's about SEK 2,500,000,000 of turnover. It's a business that has been growing consistently in 2014, 2016 period at 5% USG. We've got expertise as far as really helping chefs as we say to do what they love to do. We do that through products.
We also do it through inspiration and training. This is a business where we are digitalizing very fast to be able to serve better the needs of our operators. But it's also a business where not only do we get insights from what is happening in foodservice where typically food trends start, but also where we recognize the opportunity to build our brands more seamlessly across channels because obviously none of us make the distinction between what is it that we're eating in restaurants and that's on a tabletop versus what is it that we have in our refrigerators at home. So a tremendous asset that we believe that we already have within our portfolio.
So to
wrap up on food, we believe that what we're demonstrating is a category that is showing more growth. It's a business that is driving that growth from emerging markets, but also from renovating and innovating into on trend spaces from the core as well as a business that is changing the portfolio from acquisitions. It has done it through disposals. And obviously, you've heard our intent on spreads and also a business that is facing very much into growing channels. And importantly, given the aspiration that we have and the commitment that we made out of the strategic review as far as the underlying operating margin of the business is concerned, where we're driving a lower cost base so that we're able to put money back into the reinvestment behind our brands and capabilities as well as to expand the margin.
So with that, I'm going to hand it over to Kevin and then be back up for questions after that. Kevin, over to you.
Thanks, Amanda. So good afternoon, everyone. I'm Kevin Havelock. I'm President of the Refreshment Business. I'd probably like to leave you with 3 messages today at the end.
1, we have a strong growth Refreshment business, and the growth is strengthening with a good step up, a strong step up in cash contribution. The second is that we've reshaped our complete portfolio so that we are very much in the trend spaces, both through new launches and also through acquisitions. And third, we're driving our growth into new channels in particular, with more than half of our growth coming out of new channels, not the traditional channels of supermarkets. If we look at the growth, 14% to 16%, 4.2% growth ahead of our markets and ahead of food and beverage companies generally, step up to 5.1% in the first 9 months of this year. What I'm pleased with, and you see that on the right, it's about continuing very strong growth of our ice cream business ahead of markets, but a step up in tea.
We've doubled our tea growth and we've now had 6 strong quarters of tea growth above 4%. If I take that ice cream number this year, what's also important to reflect, it's actually slightly different than most years. We had a very tough time in the U. S. We had a big competitive challenge from a brand called Halo Top.
We've actually fought back well, but we've actually declined 2% in the U. S. But we had such strong plans. We've had double digit growth across our D and E markets and a 4th year of strong growth on ice cream in Europe, which has allowed us to grow at 5.6%. These growth rates are sort of compared with, I think you'll know many of the mainstream food and beverage companies, the better ones growing at 2%
to 3% and some actually in decline in the
1st 9 months of this year. Called out 4 years ago our need to step up our cash contribution, in particularly from ice cream. It's a big part of our business, a significant turnover. We've now got to nearly 17% return on invested capital on ice cream. Again, that's ahead of the average of most food and beverage companies.
And as you might guess, with the strong results of this year, that will be developing further. We've doubled our cash flow since 2014, and we've tripled it since 2012, and it's been the most significant cash contributor to the growth of cash for Unilever. How have we done that? That has been about C4G, ZBB, but most importantly, sweating our assets really strongly across the world. And that's one of the reasons why we were also very focused on getting to cash through premiumizing margins and through growth because growth is very, very important on an end to end business like ice cream with the use of capital in factories, in trucks and in cabinets.
So sweating the assets has been key to that. Over this last 8 years, what we've been doing is gaining and growing market share across the world of the broad ice cream business. We've increased our share each year. The number 2 competitor lost share each year. And as you know, last year they decided to throw in the towel on their own and that she combined with the number 3 in the market.
So that was Nestle came together with R and R to create Forneri. It's worth noting, of course, that our market share our market share gap versus the number 23 together is much bigger than the gap it was that we had versus just the number 2 back in 2,008. And I believe absolutely strongly with the portfolio of brands and repeatable models that we have, we will continue to grow and succeed in ice cream in the future against the new competitor. We needed to reset our tea portfolio. Although you can see top left here that we had we're nearly 3 times the next biggest player in the market, leading on with the Lipton and the Brooke Bond brands being the 2 biggest in the world.
Having said that, we had a portfolio somewhat stuck in mainstream, which was growing at around 1%, and that was a problem for us. And so we've spent the last few years reshaping that business, and I'll talk about that. I'd like to mention ready to drink tea. We have a joint venture partnership with Pepsi. Our ready to drink business has been growing with Pepsi together about 7% each year over the past 3 or 4 years, so one of the fastest growers you can see across the world.
It's a fifty-fifty joint venture partnership. Of course, with that, that's also been delivering profit. You don't see that in the underlying operating margin of refreshment, but of course, that does contribute overall to our earnings. Accelerating core portfolio, we've been growing the core of our portfolio. It started with Lipton Yellow.
Lipton Yellow has stepped up this year. It's €1,000,000,000 in itself within Lipton. What we've been doing is putting value brands just in below Lipton, so that it doesn't get dragged down. And we have great clarity now on where Lipton can operate and win. And what we're finding is, 1st, coming from black tea, green tea is an area we've been able to grow and win, and we've taken leadership outside of North Asia.
And also benefit teas. And we've been bringing benefit teas to the market, such as, for example, the benefits you get from Matcha from North Asia. But we also knew we could not do enough with just Lipton and Brooke Bond. And that's why we've reshaped with new brand launches and with acquisitions. In North and South Asia, we launched Sir Thomas Lipton and Taj Mahal.
We launched the Pure Leaf brand that we've been growing and ready to drink. We've now launched it across 12 of the developed markets in leaf tea. And we acquired, of course, Pukka Tazo T2, and I'll come back to those. This is our refreshment strategy house. I mean, basically, we are about making feel good across the world.
Feel good why? It's about bringing people together over a cup of tea to have a chat, friends, family, etcetera. And for ice cream also bringing people together, particularly parents with their children. There are 3 areas I'd like to touch on. We've been about growing the core, evolving this portfolio and developing the new channels.
Let's just talk about the trends and how we've evolved the portfolio on the trends. There are 5 big trends that have been impacting our markets and many food and beverage markets. The first is people up trading to brands where they want superior sensations and they're prepared to pay more for them. And with that, we've driven into it. Magnum is probably the best example.
With Magnum Double, big success in 2016, again in 2017. We're seeing over 15% growth on the Magnum brand. So if you go back to the earlier chart, Magnum was a €550,000,000 brand in 2008, now €1,400,000,000 and we're driving it forward with fast growth. But also, we're applying this in local areas. We have a brand called Taza in India.
It's an important brand. And there we found by understanding local consumer tastes, we were able to give a better product at a lower cost and better margin. And that brand is growing 60% this year by being really, really focused, connected for growth on the local market. Pure Real and Authentic, we've taken leadership position in gelato in the world. That's primarily through acquisition.
We acquired Talenti in the U. S. We acquired Grom in Europe. We've taken now Grom into in home. Grom was very much ice cream boutiques.
We've now actually applied our skills to bring it into the in home environment and it's beating our expectations. And Pure Leaf, I mentioned as a launch. Health and Wellness, we got beaten to the mark by Halo Top in the area of low calorie and protein. It suddenly took off. It took off first at the end of Q for 2016.
It really took off in 2017, and we didn't have an immediate answer back then. What we did do, we responded fast. In a connected for growth way, we took our leading brand in North America, Briars. With the Briars brands, we 6% growth rate across Ben and Jerry's in spite of the attack that we've been able to 6% growth rate across Ben and Jerry's in spite of the attack that we've had. And we are in good shape for next year.
We have 60 new items that we are that we've presented to the trade for next year and have a very strong response in the North American market. So by responding fast, what could have been a very serious situation for us actually landed with a 2% decline, which in the greater scheme of things is manageable, and we can then grow our way out of that. Health and Wellness in Tea has been at the heart of the new innovations we've been bringing. And just to mention this Matcha product on Lipton, we've taken that across 15 markets. It's a trend that's come from Japan and we've really seen that when Lipton brings new things as the leading brand in the world, it can move into these new spaces.
Fluid Lives is about people being out and about. And in ice cream, one of the things we're focused on is not only winning in ice cream, but now increasingly winning in the broader snack market, which is an even bigger market. So by doing that, we've been designing brands and products to launch into those markets. So for example, if I take the snacks that we've launched into Southeast Asia and Mexico, we've had 20% growth in that segment just by focusing on sandwiches that have unlocked the market. Ben and Jerry's has done that as well in North America and particularly successfully in Europe.
The final area is the one around experiences around the product. You've heard a lot about the fact that people probably don't watch as much TV as they used to. TV still has a very important role to play for our brands, but you actually have to offer people experiences. That's why we've set up a retail operations department. We have more retail shops and kiosks across the world than any other FMCG company, many of those with Ben and Jerry's, with Grom, with T2, etcetera.
This gives people the chance to have a real experience with our brands. If we take Magnum, the 25 leading cities in the world all get a Magnum store, and we drive it to make sure it's high on the time out list, that everyone has a chance to Instagram their experiences to all of their friends. It's very, very important that one actually engages individually with people and deeply, and that's what we're able to do with these brands through experiences. Growing the core, we talk a lot about brands with purpose. What's very important with tea, tea is actually very intimate.
It's about those situations that you have at home, with friends, with family. And across Brook Bond, we've been finding touch points that really talk to people relevant market by market, And we've seen 3 times the growth rates when we've been able to bring this to life. Let me just give you an example of
didn't know you're
having a friend
over. Dad, this is Amy. She's not just a friend. She's my girlfriend.
This is approach we've taken by finding relevant touch points in each market across the world. This is classic C4G for me. For example, in India, where we took market leadership in our biggest tea market in the world this year, on our biggest brand, Brooke Bond, we approached it, for example, Hindus and Muslims together, actually making bridges where there is a world that's pulling apart. And that's very, very important across the whole of tea. Lipton actually takes a similar space, but much more where Brooke Bond is about homes and families.
Lipton generally is about friends and the broader environment. And here we use an idea of being awake to what really matters around you in your world. And this has also unlocked for us a double digit a step up of growth. So not double digit, we've doubled our growth on Lipton. And then again, I mentioned about snacking in market development in terms of growing the core.
The second thing that's been important and will continue to be important for us to keep driving this growth is having repeatable models that we're clear that we take market. On the other, it's bringing the best of our skills of where we know how to win. On tea, we have a flywheel which helped us in India. We've taken it across Pakistan and across the Middle East, which actually allows us to take every market and train them how to win decisively in tea. And in ice cream, we've been doing that for a number of years.
If I take Cannes, it's an activity we've done for 6 years. It's the Cannes Film Festival. We partnered up this year, for example, with Cara Delevingne, with Moschino, with the designer, and we had £15,000,000,000 impacts across the world as we made sure that that flowed out to make sure that Magnum was a desirable brand. And then we have a DAVE program, desirability, availability, visibility and execution. In an impulse brands market, this is the way to win.
And those of you that have visited, for example, Turkey in the past will have seen how we've brought that to life. We needed new brands in our portfolio because Lipton and Brooke 1 was unable to do it. Hence, Pukka, the fastest growing organic brand in the world. It's organic, I have verdict built on Indian traditions, really beautiful brand. Tarzo, Lipton again was unable to stretch into the new growth spaces in a U.
S. Environment. Tarzo is a beautiful new exciting teas brand within the portfolio. T2, which brings luxury. We've doubled the T2 business since acquisition and taken it across new markets.
And then finally, Pure Leaf. Let's give me an example here. This thing about pure, real and authentic, consumers are looking for that. And here's an example of the way that we bring that to life with the Pure Leaf brand.
Tea is something to discover. You can't be impatient. When I craft pure defies tea, I don't take shortcuts. I fine tune the blend according to what comes from nature. I want people to experience the same amazing taste of iced tea that I do.
That's why I taste and taste until I craft a smooth, delicious iced tea. I'm Alex White, Pure Leaf Tea Master. Pure Leaf, our thing is tea.
So Alex White has brought this to life for us across all of these markets, leaf tea to RTD, to make sure we have a consistency in Italian gelato. We have the leading Italian gelato brand in Grom. We've also been driving pints. We're now at 34% of our total portfolio in premium. And this year, a big breakthrough for us was Magnum for the first time going into the pint moment, the evening moment that people consume together.
It beat our expectations. It was 40% above the original plan. I'll just give you a sense of what the Magnum Pines looked like. Given that we've reasonably recently presented it, so I would look out for this in a local store near you very soon. So that's premiumizing.
The second was snacking. Along with snacking, we also see a drive towards some sort of fresh fruit type positionings being necessary, certainly in Southeast Asia and Australia. That's why we acquired the Weez brand, which just fills out the portfolio at that end of the world. And then in Health and Wellness, we've got the leading non dairy positions across the world with Ben and Jerry's across North America. We launched a brand called Swedish Glass across Europe to take a number one position in health and wellness.
I mentioned about Briars coming into the space of low calorie and high protein. Having seen what happened here, obviously, in a Connected for Growth world, we've been able to take that now across Europe, and therefore, we will be leading into Europe. We launch in 12 countries in Q1 next year. So it's important for us we can learn in one market and make sure we move very quickly so that we don't miss out in another. At the heart of what we're doing is also, of course, a digital world.
And funnily enough, ice cream becomes more relevant now that delivery times come down. It becomes more relevant for an impulse product. So apart from Grocery Online, I'll talk a bit about icreamenow.com. Because if you think about it, one of the things that people say, e commerce is all about the last mile of delivery. We have 3,000,000 cabinets across the world that for me are small wholesale points that I no longer need people to come to.
I can use them as wholesale points to deliver to others. And that's fundamental to where we will be going in terms of the e comm opportunity. In retail, I mentioned already, we're driving retail and growing at more than 10%. And that retail capability, we're now extending across the whole of Unilever. Next year, we will have 18 brands across so not just refreshment, right across the other categories, all with retail offerings.
And then we have D2C. We do direct to delivery from, for example, Portugal through to Brazil in areas such as parties and offices. What's important is 60% of our refreshment growth is coming outside of our traditional supermarket channels because we're driving towards them. Icreemnow.com is basically saying people are wanting and ordering at home. For example, food, they're ordering at home.
So whether it's now we have a Domino's Pizza partnership to make sure if people order a pizza, they can also get a Magnum or a Talenti or a Grom or a Ben and Jerry's with the product. The same with Just Eat, the same with Deliveroo. So wherever we look across the world, there are different models building and we're making sure that we are the ice cream offering as the market leader in the world to come with those. And of course, driving up our route to market partner digital capabilities. So whenever our partners need product, we are immediately able to offer it to them.
We've been looking to very much leverage agility and speed. With the new brands we brought in, we are getting learning across the new companies that we bring in from our own companies and sharing those learnings, and those entrepreneurs are very much still part of the business, founders' mindset. We're looking for the fast rollouts across the world, which I talked about. And very importantly as well, because the number 2 in ice cream across the world is looking at licenses as a core part of the program. We have 70% of the license business across the world.
We have the Mondelez brands, Oreo, from the U. S. Through Turkey, Philippines to Australia. We have the Hershey's brand with Reese's in our portfolio. We have Disney in 7 markets.
We have Mars in a number of markets. We have Minions in Europe and we've just launched Kinder so we've just announced our partnership with the Kinder ice cream with Ferrero. So we're taking Ferrero across kids across the world. The driving of margins, it's been about premium innovation in the market. It's been about embedding the 5S program that you heard about earlier, and it's been about ZBB.
That's given us 170 bps of margin improvement in the first half of the year. So as I said, for refreshment, we're in a great shape now for the next phase as we put F and R together. It's about a strong performance, an enhanced portfolio with the best portfolio to win in ice cream and tea and an ability to transform through new channels. So as we go into F and R, finally, €20,000,000,000 business, 7th biggest globally. You heard that earlier.
We have a strengthened organization with strengthening performances in both food and refreshment. We're reengineering the cost base for the future. We've got global and our local portfolio of really strong brands, and the integration of the 2 is well on track. With that, I'd like to ask Amanda to come up and we will take any questions that you have. Yes, please.
1 at the back and then here.
In combining the Foods and Refreshments business, do you expect to be in a position to deliver any sort of commercial synergies by bringing the 2 businesses together? I think you spoke a little about sharing consumer insights, for example. Or do we think about this as being very much a cost driven led combination? Thanks.
I'll make a couple of comments and then, Amanda, you add. So I think that, first of all, actually, no, definitively, there'll be some synergy opportunities for growth as well as for cost. One of those would be if you think of the capabilities we've driven in out of home, for example, snacking across ice cream, Snacking goes across food and ice cream together. So our out of home capability. And then Amanda, on her side, offers a whole restaurant capability through the Food Service and Food Solutions business, which today does run separately to the ice cream and beverages business.
So there would be two examples that I would have where we get real synergy and benefit from coming together.
Yes. I think the channels part is a big one. I think it will be an emerging story that you'll hear as we bring the businesses together. Obviously, we felt that the time was right to do it for the reasons that I said before, but I think it's not to say that how we've been operating to this point wasn't right. You saw me talk about getting to a much more focused foods portfolio than we'd had in building a depth of capability reigniting growth.
You saw Kevin talk also about the huge amount of work that has been done to get to a different portfolio and to a different level of performance on the refreshment category as well. So it was an inflection point for us, the right time to bring them together, some obvious cost synergies, some things that we believe we will be able to tap into as far as channels on the commercial synergy point. And then I think you'll see us talk more about some of the opportunities as we get into it.
It's Jeremy Fialco at Redburn. So two questions. First one is just on margin. Can you talk a little bit more about the building blocks of the 500 basis points of margin that are going to deliver by 2020 beside the synergy opportunity? And then the second question is, I know in Alan's presentation, he talked a lot about how the margins were already good and therefore, he was going to be able to use all of his savings for reinvestment as we're about performing his end markets.
Clearly, you've got to allow a lot more of your savings to drop to the bottom line. So in that context, can you talk about what your ambitions are to outperform your end markets? Thanks.
Yes. So let me talk about it. And in that reengineered cost base, then there is a chunk of it that comes from a lower level of indirects or overheads attributed to the Foods and Refreshment organization by virtue of the fact that we're able to streamline that, that we've demonstrated already in terms of the leadership team that we put together. We said that, that will be on a lower cost base than the 2 categories that have been run separately. So that's an important building block that if you like is specific to fruit and refreshment.
At the same time, each of the categories are well on their way as far as the 5S programs are concerned, delivering savings into the P and L for this year. So just as one of the examples that we've got on foods, we've reduced the number of different formulations that we've got by 20%. And that's just one of many as we've gone systematically through the 5S program. And then we have a level of efficiency that comes from the continuation of the corporate programs that we have in place, both connected for growth flowing through, but also ZBB as we go into the 2nd year. So I think you've got to look at it in those chunks.
So there's a gross margin improvement plan underway. There's a corporate program, specifically ZBB, C4G. And then there's a specific F and R program that we're now in the implementation phase of.
I think if I would add to that, the opportunity to continue to drive towards premiumization of our portfolios, We see that across both Foods and Refreshment. We touched on it earlier. But for example, naturals, health and wellness, each time you go into these, they actually offer new opportunities to margin up. And then if you just take the refreshment business alone, the fact we drive into new channels, as we go into those new channels, in most cases, we drive towards a higher margin as well. So that plays a significant role.
I think what is important is we're very focused on growth and profit going together. And it's a the growth can bring a lot when one is actually making sure we utilize our factories brilliantly and it really makes a difference.
It's Warren Ackerman of SocGen. Amanda, you talked about a spreads divestiture, not any other structure, as Unilever has talked about in the past. Can you I'm asking you for prices or when, but can you kind of just outline what you think the portfolio looks like in terms of growth for Food and Refreshment once Spreads has gone? And also on the margin, obviously, when you sell Spreads, it's going to be very dilutive on your margin given it's making margins north of 20%. Does that 500 basis points include or exclude spreads?
So it's really around kind of the timing and what it means in terms of what's left for top line and margin
outlook? Yes. So two points. To be really clear, and I'm glad that you caught me out on that, so we said disposal. And so the divestiture is one of those, but not the only route, and we've been consistent on that.
So thank you for the opportunity to clarify that. And then as far as the margin that we've shown, that is the margin excluding spreads. So it's exactly as when we came out of the strategic review. And you know that we're now communicating our results since the Q2 showing total food and refreshment broken down by food and refreshment as separate categories, and we're showing numbers with and without spreads, so that we're hopefully clear to all of you in our communication on that.
Thank you very much to all of you. Thanks very much. Enjoy the rest of the day.
Thank you.
Thank you.
Talk of food and refreshment and the lovely bits of ice cream and tea, probably worth taking just a short break, 10 minutes or so. So if we could be back at quarter 2, then we'll resume. So there's tea and refreshments over there. So shall I just take it? We'll start in a minute or so, and I'll just get everybody to go see it here.
Okay. So if everybody could take their seats again, and we'll get started in 1 minute. Thanks. Thank you, Marai.
Right. Good afternoon. I'm going to take you from the magic to the logic in the next 25 minutes because I'm going to be talking about how we're going to be providing the fuel for growth and margin expansion. My name is Marc Engel. I look after Unilever Supply Chain and the product supply operations.
Just a quick recap about what is Unilever Supply Chain. Well, we sell about 50,000 unique product codes, products that you have in front of you in 190 markets. In order to do that, we procure about €34,000,000,000 from third parties, from suppliers, €22,000,000,000 in raw and packaging materials and finished goods and the rest in goods and services to run our business. It can be logistics, it can be media, it can be IT services, etcetera. We have 3 0 6 factories on 2 25 locations across the world in 67 countries, and we sell around about 20,000,000 tons a year.
We also have 4 88 contract manufacturers. We make about 85% of our turnover ourselves, and 15% of the turnover is made by others. And we have around 400 primary distribution centers. We deliver to 400,000 unique delivery points around the world, do 5,500,000 shipments a year, and we have around about 1,500,000,000 of truck kilometers. And we employ twothree of Unilever's employees, around 104,000 in total.
When you look at the supply chain last year, I talked more in detail in one of the breakout sessions about the transformation since 2009. And we went from a tactical cost dispersed manufacturing unit to an integrated and competitive supply chain for Unilever. The basis for Unilever to unlock cost, cash and service. When you look at the cost side, in the last couple of years, we've been delivering north of €1,000,000,000 a year on cost savings. In terms of cash, we were roughly 0% of turnover that was our working capital.
And in 2016, it was minus 6.6. And we've improved our customer service levels significantly, 180 basis points from 2011 to 2016. That we were becoming a better unit was also recognized externally. The Gardner we were ranked number 1 in the Gardner Top 25 Supply Chain Companies in the Global Oil Companies, in the European Oil Companies and in the FMCG Sector. And in the Carbon Disclosure Project, we were only 1 of 2 companies in the world who are recognized with a AAA rating on climate, forest and water in recognition of the work that we do to fight deforestation, climate change and sustainable agriculture.
What we're going to be talking about today is the 3 strategic levers that I also talked about last year and then particularly with a lens of cost, cash and agility for growth. And that is about resetting the cost and the asset base for Unilever speed and agility for a changing shopper, a different consumer shopping in different places, what do we need to be there and digitizing the supply chain. Those are the 3 key strategic teams for the supply chain to be winning in the next couple of years, underpinned by everyday brilliant execution of the key metrics of any supply chain, which is customer service, cost, cash, quality and safety. Now if we recap to the 2020 ambitions that we've published in April, we said we want to take an underlying operating margin from 16.4% to 20%, 3 60 bps and a cash conversion from 86% to 100%. And if you look what that means for our savings projects is we've all you've heard a lot of times already today you talk about ZBB and supply chain and 5S.
Now on ZBB, I'm not going to deep dive very much, but I want to say a couple of things about it. It is by far the most comprehensive cost savings project in the company. It touches literally everyone in the company around the world, and it's driving a deep culture change, not about doing a little bit better from what you spent yesterday, but with an owner's mindset looking at all the spend that you do in the company. We also have 19 cost segment owners around the world that are looking at certain cost types. For instance, there's somebody looking at a cost center segment owner for IT that is not working in IT.
And this generates the healthy tension in the business to really challenge what we spend. Initially, when we launched this in 2015, we set ourselves an ambition of EUR 1,000,000,000. Earlier this year in quarter 1, it was very clear that, that EUR 1,000,000,000 would already be achieved by the end of 2017. And therefore, we've raised the stakes on ZBB to $2,000,000,000 which is why you see it as a $2,000,000,000 ambition for the 3 year period. Then on Supply Chain, you've heard the number a couple of times.
We move from a €1,000,000,000 a year to a €4,000,000,000 savings program over the next 3 years, a slight step up in supply chain savings that we need to deliver in the period. From the cash conversion, the 2 big levers that we can pull is to basically look at the CapEx as a percentage of turnover, moving from 3.6 percent 2016 to at or below 3% in the future and to continue our working capital journey and reduce by 1.5 to 2 days a year. When we look at that supply chain cost, the €4,000,000,000 where does that come from? Well, first of all, it's coming from material cost. A lot of talking about the 5S program, I'm going to explain that a little bit in a minute.
Material cost, EUR 22,000,000,000 of our P and L, 70% of our total supply chain cost, is an important bucket of cost savings that we need to continue to explore. Our production cost of our 3 0 6 factories around the world with manufacturing excellence and world class manufacturing, we're driving the production cost down. It's roundabout 8% of our turnover. So again, it's a significant bucket of cost. And our distribution costs, almost as much as our production cost as we distribute our products around the world, We've started to apply the logic of ZBB to logistics this year and again are finding that we have significant savings projects.
Also in supply chain, we've adapted our organization to Connected for Growth, supporting the 250 CCBTs, the category country business teams, and we've basically cut our organization by roughly 15%. Now the 5S program. Nitin has already talked about it. When you look at Home Care, this program has been running a number of years very successfully. It has increased the material savings from 14% to 17% by 60%.
It has delivered in the period 2014 to half one twenty seventeen, 460 points of basis points of gross margin and delivered a higher UOM despite having more BMI. So this is a very good proven track record of the program worth. And what we've done in 2017, we've rolled it out now in all of the categories. So we now have a consistent 5S programs. You've heard it in all the presentations before.
And it's essentially about 5 smarts. It's about pricing. It's about mix. It's about buying and partnering. It's about how we source the product and how we design the product, what is the product platform.
We apply it in all the 4 categories, and we have very structured interventions. Nitin also talked about design to value. And design to value is actually the unlock. It is easy to cut cost out of a product, but it is difficult to do it without affecting the quality and the functionality and the consumer experience. And Design to Value is actually designed for that.
Design to Value will basically tell you which attributes of your product are actually important for the consumer and, more importantly, which ones are not. And you take the cost out of the points that the consumer doesn't value so much as others, and you retain those points where the consumer value is created. It looks at the end to end supply chain cost from raw materials to distribution, and it allows you to take cost out without affecting and very often improving the product quality. Last but not least, Partner to Win is our program that has been run between R and D and our procurement, which is targeting the best of the best suppliers in the world to help us with innovation, to help us with competitiveness, to help us with sustainability and to help us invest in new markets because if we build factories, they also need to build factories to suppliers. An example of 5S is Smart Buying and Partnering.
And I chose to show you an example of e tendering. We have started relatively late with e tendering. We started in 2014. One of the reasons why it took us some time is we had very complex specifications, and we had a lot of complexity in our raw materials. And through the 5S program, we've sorted that out.
This year, we have tendered about €6,000,000,000 turnover of spend. And by 2020, we want to ramp that up to €20,000,000,000 We run more than 1600 e tenders this year and have delivered more than €300,000,000 savings, so that's a savings rate of about 5% on e tendering, which we will continue to roll out. Now you can e tend the raw materials, foods, ingredients, packaging, chemicals, etcetera, but we've also started to e tend the other things like services and logistics and events and all this kind of stuff. And it's a really transparent and efficient way of making sure that actually you use the competitiveness in the market that you need. When you look at the design to value, as I said, it's really looking in-depth at all the attributes of the product that drive cost.
We already got some early results. In our Knorr Mealmakers in North America, we took out 200 basis points by benchmarking of ingredients and adjusting our fill weights to be more competitive in the market. In Brazil, we increased the margin by 900 basis points of our Luxe Bar range by looking at efficient bar stamp design, by consolidating our fragrance suppliers, by looking at formulation that is a winning formulation at a better cost. And last but not least, in our hair business in North America, we delivered 2 50 basis points of margin by harmonization of caps and bottles, by harmonization of labels, reducing complexity and by making these packaging in modular design that helped us to e tender and to drive better pricing without the consumer losing any perceived value. On the Partner 2 Win, two examples in Laundry.
On the left, packaging. We used to have multilayered carton packaging in Chile and in Latin America. This is non recyclable and looks perhaps a little bit old. So we have, let's say, introduced recyclable PE packaging, a more modern look, which is also better for the environment and also delivered a lot of margin points. On the right, we have the product EcoBoost, which is around laundry liquids around the world, where we brought a number of suppliers together, fragrance suppliers, active suppliers, polymer suppliers, And we've designed through new technology and unlock that gives a better product performance.
It's actually performing better. It is greener because the formulation is better for the environment. And it has really disrupted our cost base. So again, 2 big deliverables that we're working with our strong key suppliers to deliver, let's say, better product and better cost at the same time. 1 does not have to come at the expense of the other.
That is really the outtake here. On Manufacturing and Planning, we are reshaping our manufacturing base for flexibility, responsiveness and lower cost. World class manufacturing is a technique that we've taken from the car became very clear in 2014 that in the fast moving consumer goods, world class manufacturing doesn't really exist And then you had to look at a different kind of industry if you wanted to set a higher standard. And we looked at the automotive industry as the benchmark for us, and we adopted the world class manufacturing technology. We launched it now in 80 of our 300 sites, roughly 50% of the cost base.
And what we're seeing is that the production savings on average between the sites that are engaging in this program and the sites are not are 20% higher. If you look at the best world class manufacturing sites versus the average, it's almost 100%. So this has really allowed us to drive consistently saving and cost out of our manufacturing. Then digital transformation is not just happening on the consumer side. It's also happening on the supply chain side.
And I want to mention 3 things. The first one is democratization of real time insights. We have now more than 35 Internet connected sensors in 70 of our top sites that are allowing us to monitor real time what is happening in these sites around line speeds, around energy usage. And this is really driving an enormous amount of insight and actions to reduce use of utilities and to increase efficiencies. The second one is artificial intelligence, mostly around planning.
We've been able to take out more than 15% of resources and deliver higher forecast accuracy by centralizing a lot of our baseline planning into Bangalore into 1 planning operations center for the world using artificial intelligence, delivering baseline sales for all of our 190 countries. And we continue to do this because the end game for us is a hands off planning process across the company, an enormous unlock that we're seeing that delivers productivity but also efficiency for our business, resulting in higher service and lower cost. And last but not least, robotics. We have a lot of robots in Unilever, but they're all in cages. And the we're now investing in robots that actually work alongside people, not away from people.
We see this as an enormous opportunity, both in our factories, where we have a lot of repetitive work, but also in some of the processes such as order to cash that we run where you can also do process automation through robotics. And we have a pilot in Manila already working where 70 process robots have taken over significant work from our back office. Last but not least, partnerships. I already talked about Partner to Win. But one of the things is Unilever genetically is a company where we used to make everything ourselves.
And more and more, we are changing that. So we have publicly said that we're at 85.15 today, 75.25 in terms of what other people will be making for us is a good starting point, and we are building the right partnerships with the 3rd party manufacturers that can do that. We've also had a lot of insights from our acquisitions because in our acquisitions, almost none of our acquisitions own their own factories. So we've had a lot of insight that we brought back into Unilever that is allowing us to move away from, let's say, having to make and manufacture everything ourselves. In distribution, as I said, we've been leveraging ZBB and the principles of ZBB.
Three examples in Latin America. We've been leveraging our control tower for transport benchmarking, market intelligence, getting better truck utilization using the backhaul miles by combining inbound and outbound cabotage sea freight rather than road, which has generated a lot of savings and higher service. And we've started Uber for Trucks, which is, in principle, exactly the same as the Uber the taxi Uber but then for trucks, delivering €20,000,000 of savings. Segmentation of our supply chain into lean, responsive, agile and rationalized. There are 4 different models that we run-in our supply chain because of our categories.
Two examples: 1 in the agile supply chain, which is Luckme in India, where you have a lot of product changes and small volumes. We've changed our factory layout to run smaller batch sizes. We've centralized the distribution system, and we distribute to order now rather than Brazil, which In Laundry Brazil, which is a lean supply chain because the margins are lower than in Personal Care, We've started shipping direct to customer, which means that you do less handling of the product and you don't have stored the product in your warehouse. We do it now more or less 70% of the volume is direct ship, and this has taken 12% out of the warehousing and transport costs in Laundry Brazil. We're now rolling that out across the world in most of our Laundry networks.
And last but not least, network design. We have a number of network design centers around the world where we apply the network design for our distribution chain in terms of distribution centers, mixing centers, fulfillment centers and the routing that we do. And again, let's say, skill development, the use of standard tools, we see another €60,000,000 of savings opportunity materializing in the next 18 months from that. When we talk about cash, reshaping our fixed asset and inventory base. We went through a period in 2012 to 2014 where we had to reinvest to basically get our industrial base up to scratch again after years of underinvestment.
We are now coming towards the end of the period, so we are dialing back. So you see we, in 2015, 3.9% and 3.6 percent. This year, we will probably end around 3 percent, and we think that somewhere at or just below 3 percent is the right level of investment for our business. Why is that now possible whilst in the future that's not possible? I think a couple of issues.
There's an enormous amount of discipline now into capital investment. We have a process called utopia that is a very severe scrutiny about how you invest and is that investment affordable. And at the same time, we also said because we don't want to make all of our products ourselves anymore, there's another mix now between factory investment that we need to make ourselves or, let's say, our suppliers that will invest for us on making these products. So we do believe that 3% is a good number to be going forward. In inventory, working capital, we've done a lot of work in the past couple of years on extending creditors and reducing debtors.
We believe that going forward, the opportunity is still in inventory. By better planning, the automation of the process I've just described, we believe that, let's say, we will do another 6 days in the coming period, so 1.5 to 2 days a year. We see as possible, let's say, to take out of our working capital. And those 2 are big contributors to get our cash conversion rate to 100%. I want to say 2 things about Agility because it's not just about costs and cash.
We have, let's say, a lot of new consumers and shopping in different moments. E commerce is on the rise. We're growing very fast in e commerce in a number of markets. Last year, I was talking about the basics for supply chain for e commerce, which is making our products suitable to be shipped via e commerce. Most of what you see on the table is shipped in brown boxes upright.
They're not designed to be shipped in an Amazon case on its own. So the first step that we did is making our portfolio now suitable so that they arrive at the consumer's house undamaged and not leaking and all this kind of stuff. What we've done this year so we fixed that last year. What we've done in the last 9 months is we created a global e Basking Shopping Basket where anybody in the world in Unilever can look what Unilever is making where. So if you want to start an e commerce business on a certain portfolio, instantly, you can see with all the price information, sourcing information, label information, what are we making.
The second step that we're doing with that is we have set up a global cross border sourcing operation center in Singapore that is basically setting up a number of hubs where, let's say, country organizations that then want to launch that e commerce business can actually get those products to certain hubs so that we hold them closer to market so that, let's say, businesses that start small do not have to deal with small order quantities and minimum order quantities, etcetera. And we're leveraging the capabilities of our Unilever International Organization. That is an organization that delivers to white spaces, to drive that. And this is basically growing very fast. It's still very small because it's about 9 months old, but the growth in that in this business is very, very fast.
Second one is an example from the U. S. We have a control tower, supply chain control tower that is about an hour's drive from here in Shelton. And one of the things we do there is the real time risk monitoring and prediction of risk in terms of events, mostly weather, but also other disruptions, where basically we're looking at the advanced analytics, all of our points, our factories, our DCs, our transshipment points, our customers, our warehousing routes are all mapped. And basically, by predictive analytics, we can reroute trucks.
We can look at the timing of trucks. We can also select the type of vehicles. A lot of our portfolio needs protection from freezing. So standard, we would always, in the winter months, use the more expensive vehicles that are heated or insulated. Now we have shipment by shipment analysis on what kind of temperature exposures will be there.
So we can now tailor the type of vehicle that we have and time the routes. We use this in the hurricanes, and it allowed us really to have a much quicker response time after the hurricane because we were able to see where we could go and where not. This is, let's say, some of the logistics, real time analytics, predictive analytics, prescriptive analytics that is coming, and we're rolling that out now as well.
At the
end of the day, it's also about brilliant execution, and I wanted to show one example about the Middle Americas. In Middle Americas, in the period 2014 to 2017, We've increased the gross margin by about 3.70 basis points, service by 1,000, taken cost stocks out at the same time by 20% and reduced the quality defects. This is, at the end of the day, also an important job of the supply chain to do all of these things at the same time. And we've got a number of these examples now that are coming, and it's really a proof point that it is absolutely possible to do all of that at the same time and advance that. So to summarize, I think supply chain is a source of fuel for growth and for margin.
We feel relatively comfortable about the €4,000,000,000 supply chain savings project and the €2,000,000,000 of ZBB and the 100% cash conversion. In the supply chain, it's also very visible that C4G is an unlock of speeding up innovation and doing more local market relevant innovation as at the same time driving the local innovations and rolling out faster. And we're driving agility through the digital transformation in the business. Of course, always being focused on everyday brilliant execution. So I think that's it.
I see 2 minutes on the clock. So if there's any questions, I'd be happy to answer them. Thank you. Yes?
Thanks.
Last year, you gave a real impressive presentation about a lot of these things. I guess, it's a broad question, I realize.
This year was a bit crap for me.
No, no, no. This year was excellent. What I'm saying is what like what changed is the targets. How more, faster. Was it is it your sense that these were always potential things you knew about and it's just a question of pacing?
Or with the strategic plan that's gone on this year, is it just completely new things that got uncovered in the process of that margin acceleration plan from the top down. I'm trying to understand how that went.
Yes. Look, I think in the end of the day, the it's very clear what we're doing. Our strategy is very clear, sustainable growth, growing ahead of our markets and at the same time, improving our margin. That is also the strategic direction we've set out. I think one of the things is, as I said, we felt more comfortable with ZBB towards the Q1 last year because we had sight of the 1st €1,000,000,000 that we originally set as a target to be within sight within the year.
So and we just started to scratch the surface. So we said, let's just keep going. And so that's how that target became extended from €1,000,000,000 to €2,000,000,000 We were already delivering €1,000,000,000 of supply chain savings. And of course, we said, well, we can probably stretch that further. We've also changed a lot of the things in the business.
There's a new foods and refreshment unit being set up. There's also a lot of thinking around how we set up for the supply chain and drive more savings there. So there's a lot of things in the strategic thinking that were inherently all there, but I think we have become more focused as we are transforming the organization post the strategic review. But so that's what I would probably say is what is driving that. But if you look back at that excellent presentation last year, a lot of the stuff you see here was already in there.
Yes.
I was also at the excellent presentation last year in the wooded boardroom at Port Sunlight, if I recall. I think, Mark, you said then I thought I heard you say then that you were going to get inventory down by about a day a year, that the target seems to have gone up. So it triggers a broader question of the whole working capital projects, which the challenge is you're already highly competitive on overall working capital by industry standards, but you're pushing even harder. And you need to push to get to the 100%. So it's the sort of, to my mind, the biggest risk in the 100% cash conversion plan.
I mean, I suppose the 2 questions are how do you feel about that? But secondly, how do you feel about the risks you might be taking with the top line from being overly aggressive on working capital because there could be a risk to service levels. Yes. All that and given the whole market pushback on the whole project is how are you going to do bottom line in cash and top line, working capital would seem to me to be right at the heart of that.
Yes. No, that is a fair point. I think one of the things is because we've been, let's say, working very hard on our creditors for the last 5, 6 years, And we've deliberately said, let's not push that any further. So we have not been pushing our targets further on creditors. And the same on debtors, we've done made a lot of progress in debtors, and we think that the business is about right.
So the balance between creditors and debtors, we're not touching. What we did feel is that, let's say, there is still a lot of opportunity in inventory for a number of reasons. A is that if you looked at our forecast accuracy, whilst they're improving, there's still an enormous amount of room for improvement. And if your forecast accuracy of your business goes up, you can actually hold lower stock levels. We also see an enormous amount of variation between the different geographies where, on average, I think our inventory levels is about 52.5 days, but we have geographies that have 30 days, and we have geographies that have 70 days.
Some of that can be explained but not always. So by internal benchmarking and by also looking at the planning processes and the headroom in the forecast accuracy, I do honestly believe that there is still at least 6 days' room that we've said, and we would like to deliver that by the plan period of 2020. So I but it's also been very clear that internally, we've been saying is that for those companies who have unlocked the magic of the triangle of service, inventories and cost, you go ahead full speed. But if you can't do without the other, focus on service first always. So we do not take any risk at the bottom line.
That is very clear inside the company. First, we focus on service. And if you then have means to do it, and we do believe that we have, we're seeing that this year as well. We're making good progress towards what we want to do this year. And so in that sense, I'm not too concerned about that, but I want to assure you that we're, of course, not doing this at the expense of top line risk.
Okay. Thank you very much. Graham?
Right. Thanks, Mark. Okay, last presentation of today before we head off to dinner. Well, first of all, a big thanks to anyone that's still dialing in from overseas in a different time zone. Thanks for staying with it at quite a late time at night.
Let me try and recap what you've heard so far. So from the Canigoo Presidents, you heard all about driving growth in the growth agenda in each category. Mark just talked about the supply chain. He talked a lot about the holistic gross management program sorry, gross margin program that 5S represents. We just covered it there actually, but I just wanted to reiterate that the targeted savings programs that we have are absolutely integral to our growth model and our margin development.
Together with ZBB, we expect €6,000,000,000 in total between 20 17 2019. We're going to drive growth with that money through reinvestment of about €4,000,000,000 of the €6,000,000,000 and margin up to our 2020 target of 20%. I hope that's really clear to everybody. That combination of growth and margin expansion, as I said earlier, creates an awful lot of value. And what I wanted to cover in this last session is how we're allocating resources across Unilever within our growth model to do 3 things: 1st of all, to evolve the portfolio secondly, to win across different channels following our consumers and finally, to build capability and optimize their investment in what's a very fast changing media landscape.
And I'm going to burn a few charts in a second on that changing media landscape. I'm then going to show you how our model positions us for superior value creation through the financial targets on the right hand side of this chart that you're already hopefully very familiar with. Before getting into resource allocation, let me just spend a moment to give you a brief update on the 5 big actions that came out of our 20 20 program that we set out for you in April. 1st of all, simpler, faster organization. All of the CCBTs are in place and up and running.
There's about 240 of them. And as Kevin and Amanda said, the integration of Food and Refreshment is very much on track. Secondly, the accelerated margin progress from those amplified savings programs that Mark just spoke about, really good progress. Savings, as Mark said, coming in faster than we expect, a lot of confidence behind our delivery there. Underlying operating margin, we think of at least 100 basis points in 2017, and that puts us very much on the flight path for that 2020 margin ambition of 20%.
Accelerated portfolio evolution. Well, the pace and the velocity of our portfolio change through M and A has certainly increased. We with the announcement of a couple of days ago, we will have completed or announced 10 acquisitions this year, and the exit from Spreads by sale or demerger is fully on track. We're very happy so far with how that process is progressing. Simpler capital structure.
You saw an announcement yesterday that the board review of capital structure is going extremely well. The acquisition of the preference shares, I think, is very important there to simplify our capital structure and, of course, to improve corporate governance. And I think Marine will touch on that a little bit in his talk at dinner tonight. And finally, the increased leverage and returns to shareholders. The €5,000,000,000 share buyback is virtually complete, and the net debt to EBITDA ratio is well on its way to 2x by the year end.
It might be a little bit short of that. It's mostly because of currency movements, etcetera, but well on the way with that. So good progress on the 2020 programs. Now just turning back to this question of growth. Our model, as I said this morning or at lunchtime, is first and always a growth driven model.
We're fully focused on accelerating growth, no compromises, and our organization, frankly, understands that extremely well. In the context of that growth, we have been talking internally about this idea of 2% to 1% of growth. Let me explain what we mean in a little bit more detail by that. The first 1% is all about execution and leveraging those number 1 and number 2 positions of high market share through strong brands with purpose. We've consistently grown faster than our markets.
There's various ways of expressing that. Absolute bps of share gain is 1. We also talk about percentage of the business winning share. But by and large, the one I prefer, particularly as more and more growth is shifting to channels which are not as well measured as our historical channels is that we simply grow about 1% faster than the underlying rate of market growth, and we've consistently done that. Now in the 1st 9 months of this year, as we said, Andrew and I, at the Q3 results, we only grew in line with our markets.
Now that happens from time to time and especially happens when you're going through a period of change in an organization such as Connected for Growth. But we are confident the actions we're taking will get us back to that position of outperforming our markets consistently by 1%. Why are we confident about that? Well, we're confident for two reasons. First of all, faster changing channels and faster changing trends put a premium on agility, and Connected for Growth is all about delivering that agility into Unilever.
The second reason is that we're progressively stepping up our savings reinvestment through the second half of this year, and we'll reap the benefit of that, we think, in terms of a boost back to growth in the coming quarters. Turning to the second 1%. In parallel with Connected for Growth, we're developing the portfolio faster through M and A, as you know. We expect that the acquisitions and disposals we've done since 2015 will add 1% of ongoing growth momentum to the top line of the business from 2019. And together, both Connected for Growth and the accelerated portfolio change through M and A give us the confidence to reconfirm our guidance of between 3% 5% of underlying sales growth between 2017 2020 with a step up of the volume component within that.
Now like all consumer companies, an enduring consumer packaged goods model starts with the consumer. And we've got 2,500,000,000 of them around the world, as I said earlier. 85% of those are in emerging markets, where clearly the demographics sit in our favor. And I know GBP 2,500,000,000 seems like a big number, but the way I look at it is that there are 5,000,000,000 who aren't using our products every day, and that's where that growth opportunity really sits. And then add to that, there'll be another €1,000,000,000 in the world by 2,030 and another €1,000,000,000 again by 2,040.
And you start to see why emerging markets and the geographic positioning of our portfolio has been something that all of the category presidents mentioned in their presentations earlier. But really, it's about focusing on the core of the business. We're very, very focused about the fundamental health of our core, driving greater penetration of our brands and leading market development there. That really has been at the very heart of Unilever's business since the very early days of the company. Market development in the core of our business is going to be at least as important in the future as it has been in the past, and it might even be that it's a little bit more important because so much of the world's future consumer growth sits in those markets that are not yet fully developed.
Our portfolio, our brands and geographies, our global local organization and, in fact, our heritage, position us very well to reap the opportunities that those macro trends present across our categories, particularly in our emerging markets. And our emerging markets business overall is about a €30,000,000,000 business today. The growing belly of the population at middle income levels, we expect to see 600,000,000 consumers move into that bracket by 2,030. That, of course, drives up per capita consumption. Many, many examples I can give of that, but if we just take our deodorants business in Asia, where penetration is still below 50% across the whole of Asia for that category.
Urbanization is a second big trend. We expect 900,000,000 people to move into cities over that period, and that quite simply means more kitchens and more bathrooms to clean. And 200,000,000 women will enter the workforce and move into paid employment for the first time in the same time period. That's more demand for products offering convenience like cooking ingredients that save time in family meal preparation at busy times, etcetera. Now we have proven models for market development in each of our categories.
And there's a simple goal really behind that: more users, more usage and more benefits. It's evolved over time, and the best insights in each of our businesses are codified in very, very repeatable models. Lifebuoy, which is shown here, is a prime example of market development over many decades. I think that's a young Mark Engel at the front of the queue there. And it pays off.
It pays off for us. A nice, steady 5% growth year to date from Live Boy just by focusing on the core, just by focusing on market development, which we've been doing for a long, long time. Now a word about our organization. Since 2011 in 2011, we created 1 Unilever. And generally, it's worked very, very well for us.
The global categories set the strategy and the allocated and managed innovation resources. The local operating teams across our 8 clusters executed that strategy, deploying the global innovations. And increasingly, as you know, we've been introducing more flexible business models into our organization, coexisting with the main matrix of categories and clusters. We run these differently, and we can because they address the needs of alternative channels and alternative segments. If you recall, we started talking about this over 2 years ago in the Philippines when Alan and or actually, it was in Singapore, wasn't it?
When Alan and Vasiliki gave a presentation on our Prestige business at that point. Now this 1 Unilever operating model has ensured great strategic consistency. It leverages our global scale really well, and it leverages our expertise on innovation, but it does restrict speed to address local opportunities since decision rights on all innovation always sat with the global teams. And so therefore, everything had to go up to the global team and everything had to come back down to the global team in order to act on it. And that's why back in early 2016, we started the Connected for Growth change program, so 2 years ago.
So C4G is, however, a lot more than just an organizational change. It's a very holistic program. It covers ways of working, it covers behaviors and it covers the culture in the business, all of it with the aim, as it says here, of making Unilever faster, simpler, more global and more local at the same time. Now at its heart, there are 3 structural changes, which you see here on the left hand side of the chart, also supported by a redesign of all of the functions in Unilever. It really has touched every single part of the company.
The first of the structural changes is what we call the concept of seventy-twenty-ten. This means 70% of our global innovations landed at scale in the business 20% of our innovations, broadly speaking, are implementing local trends on the global brand platforms and 10% are fully local innovations. It means differentiated decision rights, resource allocation and processes for the Global 70 and a different approach for the Local 30, if you like, which is the 20 and the 10. Now it's important in all of that, of course, to avoid fragmentation and bringing nonvalue adding complexity into the business. And so the philosophy we have is that you have to do the 70% really well flawlessly first.
And after you've done that, with a lot of discipline then to unique local needs, which responsible for delivery of the business results. They take innovations from the global teams and they land them in market, but they are now also empowered and resourced to develop those local innovations with speed without the lengthy global approval process of going all the way up to global and all the way back down again. That's the 30 and the seventythirty. With that freedom, as I said, comes Clarity creates alignment and delivery of the global strategy first and protects the scale benefits. And again, it protects against fragmentation and complexity, as I said earlier.
Finally, the 3rd part of the structural change is global brand communities. This is an extension of the global brand teams that we have. It involves all the marketers who are working on a brand. They're there to share and scale local insights. They're there to speed up the adoption of the global initiatives.
I thought the example that Nitin gave earlier of SIF Duo from Italy now going out to 15 countries, but starting locally as part of the 20 and then going out from there. And that's the sort of thing that the organization allows us to do through, for example, the brand communities anchoring everybody together on the SIF brand. The new organization really quite simply, it means we are more global and more local, as we said, with more frontline focus. We're very clear that more resources are placed out there in our markets on the frontline of the business. There's a lot more empowerment.
We've got more resource and activity closer to the markets, which ultimately is where consumers live and where all the trends develop from. Now we believe that the change with Connected for Growth really does position us to win in this fast changing and competitive marketplace. We're progressively going to reap the full benefits of the change going forward and reassuring where we're already seeing good examples of a more focused innovation funnel alongside greater local agility and speed. And I think we shared some of that with you on the last 2 or 3 results calls that we've done. To reiterate some of that, 70% of the innovations are globally led, benefit led, rolled out to more markets faster than before.
We've reduced the number of global innovation projects, and they're of a bigger average size. That allows more focused, better investment behind the winners. The two examples I like best are Magnum Pints and Baby Dove. They're being rolled out to 20 markets, both of those innovations in just 12 months. At the same time, we're landing more innovation that addresses local needs.
30% of the initiatives are indeed locally led, simpler, more flexible processes, as I described. But this bit is about being faster. We're trying to half the time to launch these things. The aim is less than 6 months. And Alan gave us an example in his presentation of Keiju in China, which was developed in just 6 months using exactly that process.
We're also using, as Mark said, more third party production, which again reduces the time to market, balances risk a little bit better and is indeed more flexible, but it's above all faster. Examples here, Hijab Fresh, the new Muslim brand launch in Indonesia, which Alan covered Knorr Fresh meal kits in Netherlands, which is on the right hand side of one of Amanda's charts, that's chilled food done through a licensing model with the online retailer Picnic in the Netherlands. And Nitin mentioned the premium OMO Naturals range in China. That was an exclusively online launch in Tmall in Q3. So there is a lot of confidence in the model that we've got.
The CCBTs, as I said, are now fully operational. And most encouraging is the buy in that we're getting and the reaction we're getting across the organization. We monitor this pretty closely with our people surveys. Now there's always a risk of an echo chamber. You tell people we'll be faster and it bounces back we're being faster.
But to guard against that, this is a sequential improvement chart. So this is the same set of questions asked in 1 quarter and reasked in another quarter to try and take that echo chamber effect out of it. And it really does show the traction. It shows there's been a jump in speed and agility. It shows that people feel they're more able to focus on driving performance.
And certainly, people feel there's a lot more empowerment under Connected for Growth to really make decisions.
Now
perhaps core growth and the first 1% and outperforming markets through organization and execution. I want now to turn to alongside Connected for Growth and the innovation that, that enables, the second 1%, through developing our portfolio through M and A. Look, we are working a really clear strategy to position the portfolio for future trends and higher growth, getting to more consumer touch points in this fast changing time. Each acquisition we've done has got a really strong fit to this strategy. For example, if you're on the page here, Carver Korea and Quala build on the strength that they have in PC, but they also fill in portfolio gaps, either a category portfolio gap or a geography portfolio gap.
Dermalogica, Living Proof and the other prestige businesses extend our Personal Care reach to higher price points with a very, very attractive growth profile at that price point. So Kensington's and Grom are examples of smaller premium brands that will indeed work very well as we take them through our mass channels. Blueair and Dollar Shave Club take us into entirely new channels. 7th Generation and Pukka are examples of meeting the growing demand for natural products. And as you know, since 2015, we've been a lot more active in this space.
If you take the 19 acquisitions that we've either completed or announced since 2015, A consideration, as it says here on the right, was £8,600,000,000 acquired turnover £2,200,000,000 and together, all those 'nineteen acquisitions grew 16% in the 1st 9 months of the year. That's not at all in our underlying sales growth number, but it will feed in. So I'm talking here about the impact from 'fifteen before we did any of these deals to 'nineteen or back end of 'nineteen by the time we've had them all anniversaried and into our underlying numbers. Of course, alongside that, we also dispose brands that no longer fit the long term strategy, typically somewhat lower growth brands. And the combined impact of all of that since 2015, as it says here, adds 1% to the ongoing growth of Unilever.
Now that doesn't include the latest acquisition, Sundial Brands, which we announced 2 days ago. You heard Alan talk about it earlier, and we're going to have the Founder and CEO, Richelieu Dennis, on the panel tomorrow. And that's going to be a really good opportunity, I think, for you to meet him. And when it's really fresh, talk about what it's been like to become a part of Unilever and what it was like to the philosophy behind a founder like Rich coming into the Unilever family. I think it's going to be a great opportunity.
This is just an example of evolving the portfolio through innovation and M and A, focusing in on naturals. Why is it significant, naturals? Well, Amanda showed an incredible lineup of Knorr innovations in the natural space on one of her charts earlier. And as Alan said, in Personal Care, the natural space, I think I get it right, it's growing at 2x the rate of the Personal Care market generally. So very, very strategic significance on naturals.
We're getting there, as this chart shows, through both innovation and through acquisition. There's just one example here for Naturals about how we've shifted through many routes, global and local innovation and through acquisition, significantly upped our game in Naturals over just the last 12 months on one chart. I'd like to move now though from portfolio and on to channels and shift gears a little bit. I want to look at what's also changing through the lens of our channel footprint because it's not only the consumer shift in product choices, but it's also a shift in how consumers are shopping. It's really important that we have the right portfolio and the right channel strategy in order to win.
First of all, there's a bit of a myth that consumer will move completely out of big box retail and the entire basket will shift to e commerce or experience platforms. Of course, there's going to be less reliance on a single weekly shop, and there already is. But supermarkets, as you can see here, will still be our largest channel for many years to come. Now within that channel, we've called it out here, there are areas of very strong growth in shopper appeal, the discount channel and convenience stores, for examples. This has implications for our innovation range, for our product design, etcetera.
And of course, it gives us a little bit more cross channel conflict to manage as more consumers shop across those channels. So it's a challenge, and it's an opportunity for us. We also in the green bubble, you can see that we expect to see continued strong growth of traditional trade in the emerging markets. That's going to be driven by those big macro trends that I touched on earlier. And frankly, that's a demographic force that just isn't going to change and frankly, a really key defining strength and capability of Unilever.
And you can see that traditional trade remains up to onefour of our business, we think, looking forward for the next 5 years. What is changing, of course, in both the developed markets and in the emerging markets is that consumers are shopping much more frequently across more channels. And this idea of an increasingly differentiated shopper mission means that each channel needs to be more focused than ever on meeting a specific consumer need. And you see here over the next 5 years, we expect around 30% of our turnover, that's the 20%, some of the green dots and the last 10%, to come in the what we call the experience platforms and e commerce. And that's about a doubling.
It's about 15% today, but we expect that to double sorry, it's 15% in 2012. We expect that to double over the course of the next 5 years. Channel shift brings a lot of disruption, but we see many opportunities, as you can see on the chart, from the growing channels on the bottom half. The things it allows us to do, take health and beauty as a channel. Well, that's a fantastic opportunity for product education and trial.
You take brand stores, a particular type of experience platform, that gives you direct access to consumers. It gives you a fantastic performance space for your brand. The idea that nothing's gone physical, I think, is absolutely a myth. You need to be able to have a physical presence and a physical performance space for your brand. You build equity in these stores by experience, not necessarily by investing in media.
And e commerce, of course, gives you many, many new distribution points and allows much, much more focused targeting of the consumer. Against that, we think we're very well placed in this channel landscape today and in the future. We're going to build and reinforce the current strengths that we've got through our channel strategies, as you see here. First of all, in supermarkets, we're going to protect the value that we have. This means really strong joint business plans.
It means deep, deep category expertise that we can bring to our retailer partners in order to do the old thing of driving category value. I think the very best example, as I see it dotted around some of the tables, is dry spray deodorant right here in North America. Tremendous uplift in overall category value, a win for the consumer, a win for us and a win for our retailers. And the other skill, of course, that's going to be very important there is net revenue management. In the traditional trade, the green dot there, we're going to leverage technology as we are today, but really accelerate that across our sales force and our distributor partners.
This is you've heard me talk about this before. This is leverage. This is Darwin. This is Fusion. This is the projects we have using technology that come out of India and Brazil.
But of course, we take it then to Indonesia, to Vietnam, to the Philippines, to Pakistan, to Nigeria. So all those places that Nitin explained earlier are where the growth really sits for Unilever. And that, of course, allows us to really work with our small store holders and our distributors to optimize range planning and replenishment and also harness information that we play back to them in order that they can run a better store, they can get more throughput, not just of our products, of everyone's products, but of course, the fact that we implement the technology and reinforce that strong relationship gives us a long lasting advantage. We're also going to invest in new capabilities. Like the experience platforms, which are the yellow bubble here.
We expect, as you can see here, that to grow maybe 50% faster than the rest is our estimate. This is things like Food Solutions, our B2B Food Service Business, digitalizing that for an even better connection and giving real utility and service to our community of professional chefs who sit absolutely at the core of that particular platform within our business. It also means in Health and Beauty, where historically we've under indexed. And as Alan said, we expect by 2021, this will be 20% of Personal Care through this particular channel. We need to rework aspects of our channel model there from portfolio to our go to market approach, and we've been looking to drive double digit growth in that channel going forward.
And of course, we expect that e commerce in the lighter blue dot, we think that will contribute perhaps 40% of our total growth. We're continuing to invest to build capability there across many different models. Maybe it's grocery.com, pure play, direct to consumer, etcetera. But we're really confident whatever e commerce model develops fastest, we will have the capability to grow ahead of our markets as today we do in e commerce in the U. S, for example.
This more differentiated channel strategy is really paying off. Investment in broad e commerce expertise is driving a 40% growth rate for e commerce. It also allows us to have higher online gross margins and higher online market shares versus offline. E commerce is now 3% of Unilever. We expect it to be closer to 4% by the end of Q4.
We have the number one out of home ice cream business globally, as Kevin's chart showed, by quite some margin. Extension. The innovative and expert mindset in that foodservice business, Unilever Food Solutions, has driven USG of 5% and more than half of that from volume. And the launch of the 2 new brand new health and beauty brands this year that Alan mentioned, Love Beauty and Planet and Apothecary, that allows us to build scale in a very, very attractive channel, both organically and inorganically. So we've got a nice balance between the acquisitions we're doing, but also very importantly, developing our own brands with different models which are specific to certain channels.
Now Connected for Growth brings our customer teams much closer to our marketing teams. And I want to share some specific examples for you of where we are, as a result, producing more innovations that are specific for particular channels. In Health and Beauty, we've extended Dove into face care. Alan showed Apothecare, Love, Beauty and Planet. That builds scale really fast in a fast growing channel.
In direct to consumer, we're building capability with quite innovative business models of Dollar Shave Club and T2 in T. In wider e commerce, we launched KJU by Luxe in China, as Alan said, co created really with a Korean designer to get on top of the very exciting K beauty trend with urban millennials. And in the U. K, we've launched 4 Amazon Laundry Bundles, really understanding the algorithm there to win in search and allow us to tailor our product offering. In the discounters, where the price point matters most, we're producing a lot of discounter specific packs, lower retail sales price, maintaining the gross margin.
The example in the bottom right there is Shure in the U. K, produced at a £1 price point. And to do that, we've had to reduce some of the premium technology in the packaging, and we've reduced a little bit of the artwork complexity that we normally have. That's how you get to a 1 pound price point and make sure your margin remains nice and healthy. And that was channel.
And let me go back to the consumer and specifically the communications and media landscape. There's no doubt consumer journeys have become more complex and more digital. It's technology, and it's especially mobile that fundamentally changes how consumers interact with brands. We're all consuming more media on more devices than we ever did before. We're increasingly able to choose the content that we think is most relevant to us.
We're able to create our own content, and we're even able to curate the content of other people's. A combination of this fragmenting media landscape and the changing channel landscape completely rewires consumer paths to purchase. They used to be linear. They're now no longer linear at all. They are more sophisticated.
There is multiple touch points along the way. And yet sometimes, only one click from a consumer will take them from a journey of discovery to a purchase. Now our journey as consumers may or may not involve a trip to a store anymore, but it often starts with search. In fact, it most often starts with search as the point of entry. And there can be a complex research process that uses multiple devices before we make that purchasing decision.
We know that reviews and opinions from social communities play a really large part in our decision as consumers, And we increasingly see world-of-mouth and online reviews as the greatest influencers of purchasing decisions. This consumer journey now leaves a very data rich trail for us, a sort of primordial soup of data that is out there now for us to go and play in. And that's littered with lots and lots of relevant moments where a brand can engage with a consumer. It's understanding this trail and acting well in it that's going to unlock huge opportunity for this business to be more targeted, to be more personal with our brand communication than we ever have been before. So how do we win in this new consumer order?
The quality of our advertising content and reach, despite the fact that consumer journeys are now more digital and more complex, the quality of the content and reach will remain the 2 biggest drivers of return on investment. So we target broad penetration, and we plan multi screen, multimedia now to deliver 3 things. We look to deliver reach, we look to deliver impact and we look to deliver relevance. In the last 5 years, advertising spend has shifted. Digital media spend, as you can see here, Unilever has gone up by 130%.
The cost of creating digital assets, what we invest creating digital assets, has gone up by 60%. Traditional media spend is down slightly in absolute, while efficiency in traditional asset creation means that we're 35% lower investment in asset creation in traditional. Overall, when you package it all together, digital or what you might call digital advertising, I hope we don't call it that anymore, but if you you might call it that, that's now about onethree of our spend. Now 0 based budgeting oops, has it dropped off? There we go.
0 based budgeting quite accurately allowed us to identify where we sat on the relevant benchmarks, and we made a deliberate choice to protect the viability and momentum of our growth model for the long term. We targeted substantial cost reductions in asset creation, but we continue to build our equities through strong media investments, showing fewer assets to more communications for longer, which I think you'll agree is just common sense. You see the impact of that in the €130,000,000 and the €10,000,000 and €10,000,000 and €35,000,000 You can see that we've been spending more on media, less on creation, so fewer assets, more consumers for longer. As we've adjusted the way we plan media to reach consumers at relevant touch points in this new consumer journey, you can see here that it's not really about traditional or digital. As I said, I really hope that we can shift our conversations away from that question of traditional or digital.
It is about Multiscreen Media Planning. I want to dig into this just a little bit. 5 years ago, the idea of digital was very relevant. There was a clear distinction between offline and online media. In that environment, we spent around 15% of our spend on digital and about 85% on traditional.
And we consider that pretty optimal to maximize reach because, again, we were looking to reach as the key thing that we're after. Now that that online and offline distinction has blurred, we see less relevance in that traditional versus digital distinction. The most effective media channel can vary between category geography and indeed the objective of a campaign. And we find that to optimize reach, we need a holistic approach that amplifies messages across multiple media channels. And there's a widely different ROI against all of them.
For example, winning in search is increasingly crucial, capturing that consumer attention at the start of the research journey. TV or video though is still one of the very best ways to cut through, but it's relatively expensive to create, as we know. Good social posts, which are perhaps the hardest things to create, But if you do them right, they can have some of the most attractive returns. And good display helps very well to close a sale at that point of purchase. The output of optimizing all of these divergent ROIs is that onethree of our media spend digital that I mentioned earlier.
By conventional definitions, you would say that was digital. However, it's not at all a choice explicitly going in to say, is it traditional or is it digital? It's an outcome of maximizing reach in the most efficient and the most effective way. We've seen a lot of change in the last 5 years. We expect to see even more in the next 5 years.
This is an estimated roll forward. Now nobody has got a crystal ball here. This is market data incidentally, but the Unilever picture that we expect wouldn't be too different to this. But please take a pinch of salt with this. Don't get rulers out and try and think about how things are going to shift, etcetera.
One thing seems really, really clear though, and that's that the degree of online and offline integration is only going to increase even further. Now some people might predict that people will be talking less about TV, but there's no doubt that people will still consume a lot of video content on some form of screen, whether that's a big screen or a small screen. Frankly, the human love affair with watching moving pictures in a rectangle is happily going to continue for a long time. But no matter how much that media landscape changes, it's ROI that's still going to drive our media allocation, and we're always going to seek to optimize the reach of our content across multiple platforms, whatever those platforms happen to be. And that's why the Connected World program, which our marketing function is running alongside Connected for Growth and having one marketing organization focused on Connected World is so important.
It frankly equips our marketeers with the right skill set and the right insets to make the right choices in today and tomorrow's advertising world. We're investing in some world class capabilities in this space. Three examples here: data capability at scale with our people data centers, which Stan will show to you tomorrow. This gives us real time insight in 20 markets with 25 people data centers. It really deepens our consumer understanding.
We're seeking to build 1,000,000,000 richer, 1 to 1 relationships with our consumers. I want to put some emphasis on relationships there. We're not just trying to pick up an e mail address or a data record. We're trying to build 1,000,000,000 relationships. We're reinventing consumer engagement through an in house content capability that we've built with U Studios.
This allows us to create content in a more agile, personalized and efficient way. We've got it now in 17 markets. And so far, we've run over 3,000 projects through U Studios across 200 brands. And finally, we are continuing to leverage efficiency and effectiveness in our media buying with Ultra. And Ultra, frankly, was very pioneering.
It's our proprietary programmatic trading desk. Simply put, it allows us to reach the right people with the right context at the best price. So in summary, it all boils down really to 3 things. It's about better insights generated earlier. It's about relevant content created faster, and it's about effective and efficient media planning and buying.
Last part of this presentation, I want to try and pull it together for you a little bit and answer the question, how does Connected for Growth strengthen our growth model and how does this translate into superior value creation? So as I hope we've shown over the course of this afternoon's presentations, our Connected for Growth program goes way beyond organizational change. It is really a comprehensive set of linked changes that transforms Unilever into a stronger, more agile and more successful business. On trend innovation, more global and more local, remains fundamental to growing the core of our business and so too are extending our emerging markets footprint and driving continuous market development in that core. At the same time, as I said, we're evolving the portfolio to capture the emerging segments of the future.
We're doing this both organically and we're doing it through M and A. Acquisitions can be a faster route to tap into the growth opportunities, and we're more frequently running those acquired businesses with flexible models outside our main organization. And we're also working very hard to develop channels, e commerce, of course, but also out of home, foodservice, brand stores and health and beauty stores. Now underpinning these three pillars are our targeted savings programs, providing the fuel for both growth and for margin expansion. And integral to the whole lot is the Unilever Sustainable Living Plan.
That's, as you know, not just an additional bolt on to our strategy, but it really is sitting at the heart of our strategy. It helps drive sustainable long term value creation. We're very, very clear about that. It drives higher growth for purpose led brands. It drives lower costs through savings in packaging, energy and waste.
It drives higher trust in Unilever and our brands, very relevant for millennial consumers who are going to be an increasing proportion of our consumer base. It gives us continued access as well to world class talent, and it reduces risk in our supply chains. Now our savings programs provide the fuel for growth and margin. I want to give you a very quick summary of progress on them. You've heard a lot about it already actually, but the step up in the rate of saving comes basically from 3 key programs.
First of all, 5S, which Mark described, we're rolling that out across the whole of the business. It brings marketing and R and D, in particular, in more often together to deliver really sustainable gains in product margin. Zero based budgeting. We're really making activity system improvements and better choices across brand and marketing investment and in overheads. We're well into implementation.
As Mark said, one of the reasons for the step up in our margin ambition was the line of sight and the confidence we had in how zero based budgeting or our form of zero based budgeting was landing in Unilever. It's already locked into our 2018 targets and plans. We have really, really clear what we call operational KPIs for 0 based budgeting. That's not to track delivery of the savings. We don't set savings targets for ZBB.
We set operational KPI targets, and that ensures that we're delivering the underlying operating improvements that are consistent with growth, with the savings and reinvestment of the savings as an outcome of making the operational improvements. And the final driver is the organizational changes under Connected for Growth. We're going to we have a 15% reduction in middle and senior management levels outside of customer development. And combining Food and Refreshment into a single lienal division based in the Netherlands. As Amanda and Kevin said, we would aim to reduce the overheads of that division by about 20%.
In total, that's going to give us that CHF 6,000,000,000 of savings in the 3 years to 2019, £4,000,000,000 in supply chain savings £2,000,000,000 across BMI and overheads. Just to say again, twothree of those savings will be reinvested buying competitive growth, onethree taken to the bottom line to grow our margins. Those savings programs really do give us the headroom strategically important to us. In 2016, we did a 19% return on invested capital, which includes all of our acquired goodwill. Now growing a business with already such a high level of ROIC, of course, very value creating.
Once you've got a high ROIC, your objective should be to grow the business. And delivering the 2020 margin targets, of course, accelerates our ROIC even further. We're very, very clear about our value creation model, reinvesting to accelerate growth and compound the returns on investment, reshaping the portfolio towards faster growing segments and channels. Doing that through a faster rate of M and A brings more goodwill onto our balance sheet with a diluting effect on ROIC in the initial years after a transaction, and that offsets the ROIC accretion from the growth and margin expansion. That's a very, very conscious choice that we've made.
We're very clear that growing our business faster for longer is going to create more absolute value than maximizing the ROIC in the short term. Taking both those drivers together, the growth in margin on one side, the goodwill from the portfolio change on the other, we still expect to be able to sustain a high teens ROIC, and that, in fact, has been embedded now in our long term incentive targets. Just to finish up, let me just cover off what I stated at the start today. We've got a strong portfolio of brands. We've got unparalleled geographical presence.
We've got true strength and breadth in our distribution, and we've got diversity and deep experience in our talent. The things that guide our resource allocation are our differentiated category strategies, and that allows us to drive USG ahead of the markets, 3% to 5%. It'll let us get to a 20% underlying operating margin by 2020. And it will allow, as Mark said, to get us to 100% conversion of net profit into free cash flow, up from about 85% in 2016. That rolls into EPS growth.
It rolls into high returns on invested capital, strong free cash flow and hence shareholder returns. And that's the simple framework that we've now built pretty deeply into the short term and long term incentive plans for all of the people who work for you here in Unilever. And I hope that's clear and well understood. And with that, take a couple of questions. 5 minutes of questions.
5 no, not 5 questions. 5 minutes. Good. We have mics. So I'm going to go over here first.
You take it, and we'll come back to you.
Thank you. It's Mitch Collett from Goldman. You talked about how Connected for Growth should be able to help you deliver better volume growth. This time last year, I think Paul said he wanted a better mix between volume growth and price mix. Maybe could you talk about why volume growth hasn't really improved?
I know he said at the time we shouldn't look at it on a quarter by quarter basis. But given the input costs have been fairly favorable, why haven't you had better volume growth? And then secondly, just a point of clarification on the contribution of acquisitions. You've got CHF 2,200,000,000 of sales, growing 16%. By my math, that's about 70 basis points of growth acceleration.
Is that rounding? Are you expecting those acquisitions growth rates to accelerate? Or is there more acquisitions to come that will get you to the 100 basis points you've talked about?
All right.
Thanks, Mitch. I'll take the second one first because the your math might be about right, but there's 40 basis points or so that's the exit of spreads, which is the delta between the two that gets you to the 100 basis points or so. So it's a combination of the acquisitions and the disposals. And
actually, maybe sorry on that. You said most of it isn't in the growth rate you're doing at the moment. So how much is baked into the 2.8% you're doing in the year to date?
Virtually none of it. I mean, this I mean, we closed the transaction 12 months later. It rolls into our underlying sales growth measure, so that it takes at least 12 months. I mean just to be really clear, that 1% we expect to see during the course of 2019. At some point, the benefit of the transactions we've done, the 'nineteen transactions so far, will benefit into our numbers from some point during 2019.
Beyond the question of volume, let's talk about emerging market volume because we've talked a fair bit all the presentations today about strength in EMs. And if you go back over the last 30 years or so, you'll see that if you take out all of the price growth that Unilever's had in emerging markets and you just say that, that is all eventually washed through by devaluation of currencies, It isn't really, by the way, but let's just simplify it and settle there. You have about 5% CAGR of growth for, Andrew, I always get it wrong, 25 years, something like that, of 5% growth. Now that hasn't happened, Mitch, for the last 3 or 4 years. We've been around 1% to 2% of growth.
I thought it was quite encouraging in Q3 that emerging markets got I think we were over 6% growth in the EMs, and we were 1.8% of volume growth. And as Alan said, I mean, he saw encouraging trends within the volume, albeit in a rather low Personal Care number. So there's a question here around emerging market recovery, the cyclicality of that. I think it's very cyclical. I think you go back to the demographics, you go back to the fundamentals of people entering that sort of middle income class, you go back to the trend of urbanization, you go back to the basic growth rate, and we will see volume growth returning there.
What we've had specifically over the course of the last 3 months, just of the year to date, 3 of our biggest markets with a big presence: Indonesia, Brazil and, to some extent, India, with the changes fiscally taking place there. That has hit volumes. And as Alan said in his presentation, it's hit personal care in particular because we have a very, very big personal care portfolio there. But we're confident the volumes will be back up. I think it's less a question of the interaction with commodity cycles and pricing.
I think there's some more fundamentals in there. If you take Brazil, for example, volumes are minus 5 in Brazil. We have a very big business there. Volumes in Indonesia, a very big business there. We're minus 10 in the Q2.
So 1 or 2 specific emerging market hits. But your point to answer your point, really, I mean, it is about emerging markets and when does emerging markets get back. If not to 5, then perhaps to 3, perhaps to 4. But whatever happens, that's a superior level of growth if you've got our sort of footprint.
Graham, it's a
question on M and A, which partly for Alan. The last 2 of the more recent deals, especially in Personal Care, have been from private equity. You've actually got in very recently in the last 1 to 2 years. Is there anything within the organization you can do to change to mean you get there first?
It's a great question. And in fact, I had quite a bit of discussion about this during the coffee breaks. In fee, you'd love to get there first. But in reality, a business like this, a scale business like this, we'll find it very hard, I think, to pick a winner. And it's important to note that for all of the businesses that we look at, as Alan said, we look at way more businesses than we actually end up acquiring.
There's 2 defining things to them, I think. First of all, in the case of some businesses, take Dollar Shave Club as an example, they were far and away from the first people to offer an online subscription shaver business, razor business on the Internet. And they were far from first, and there were many, many companies that tried and failed to do it. So I think for a business like this, our ability to spot the winner and allow that to be proven and then step in offering the scale opportunity to the founder of the business is what the founders find attractive and what's making us, I think, pretty successful so far in increasing the velocity of M and A and using M and A to shift our portfolio strategically. The second thing is that it would be easy to think of these businesses, founder businesses, as new businesses, as start up businesses.
Most of them are, and most of these businesses have been going for 20 years, 10, 15, 20 years. So it takes a long time. And what you typically find is that the business has evolved over a period of time. It's gotten up to maybe €50,000,000 of turnover, maybe €100,000,000 of turnover. At that point, 1 or 2 private equity companies will come in.
They'll, I think, to be honest, secure financially the good work and the incredible brand and purpose and positioning that the founders have created that takes a little bit of risk out of the system for them personally and then actually helps them to scale up further to perhaps GBP 150,000,000 GBP 200,000,000 At that point, Finder reaches a problem where you say, look, I'm really in business here to take my business out. I mean, they're very, very purpose driven businesses, and the founders want to get the business out there and scale with it. And at that point, we see an opportunity in partnering with Unilever to do that, to take it to the next level. That's what we've tended to see in those businesses. But by all means, great question for the Founder panel tomorrow.
The model is unproven.
But the
2 I was referring to, in particular, I guess, are Carver and Sundial, both of which private equity got in within 1 2 years before you, both of which you said demand for 20 years, and you both bought Ashland from the same private equity.
Yes. I don't think that's pure coincidence since I think that's you'd better ask them how they've managed to be so successful with their model. I don't care. You shouldn't care either. I don't think it's I mean, it is a fact that they come in and they help those founders and they create those businesses.
Our business model doesn't say, Well, hang on, how much is somebody making who's only been in for a 2, 3, 4, 5 year period. We look at what we can bring to the business. We're very clear. We're very rigorous. Nothing has changed in the way in which we think about M and A and value creation and M and A.
Nothing has changed at all on that, and we only look forward. So we don't look back about who may have made what money. Rest assured, we're not in the private equity business, so and plenty of private equity firms are successful, and plenty are less successful. Warren,
hi. I It's Eddie Hargreaves here from Investec. Just to follow on from that sort of line of discussion. How do you incentivize the founders who you retain in the business typically?
Well, the first way is to the first thing to say perhaps is that the discussions of course, there's a discussion about valuation. Of course, there's a discussion about structure. With many of these businesses, the involvement and vision of the founders is of particular value to us. We the reason we run them in a separate, more flexible model is to retain the spirit, the brand essence, if you like, and the passion of the business. And therefore, usually, we're in a situation where we are trying to work together with the founders to come up with a model that works for them and works for us.
By far and away, the biggest piece of the incentive must be the purchase price. Obviously, that takes care of itself. In many of these deals, there's a form of back end incentive. In some cases, and you can talk about this in the final panel tomorrow, we will set up perhaps a social mission board in the case of many of the companies. They're B Corporations already.
We will maintain them as B Corporations. That's nothing new to us. Ben and Jerry's is a B Corporation. It's been in Unilever for 17 odd years. So we've learned a lot from that.
And we've actually been able, I think, to scale it. We've been able to use our experience and use the founders who've joined Unilever and had a good experience, including Ben and Jerry, to engage with companies that we're having a dialogue with and get them to represent what it's like joining Unilever. In some respects, possibly one of the toughest things we have to do is to sell Unilever to these founder businesses because they're very strong businesses, and they've been very successful typically. And therefore, the idea of why is Unilever the right owner of the business and partner for the next phase is the question that we come across. Warren?
Graham, two questions. First one's on share buybacks. You've said, I think, that you've almost done the €5,000,000,000 buyback. And on my numbers, I think you're still below the 2x net debt to EBITDA. Is there any expectation that there could be a share buyback in 2018?
And related, if you do sell spreads and it's dilutive, would you consider a share buyback to offset dilution? And the second one is completely unrelated. It's actually on Amazon. What is Unilever's strategy with regards to Amazon? And specifically, in the area of voice search, with everybody owning Alexas for Christmas, do we is there a risk longer term that brands actually start to get disintermediated?
And what's your strategy in voice?
Well, on the I'll take the second one first on that. You're going to hear quite a lot of them steal Luis and Stan's thunder for tomorrow, but you can ask them that and hear a lot about it. Suffice to say, we are voice is hugely exciting. I think it will be a big disruption in the way in which brands interact with consumers and the way in which consumers shop over the longer term. It's one of the technologies that I think is going to be as the home and your car becomes more connected, it becomes more natural to have a dialogue with about how you want your shopping basket to look.
It allows personalization, etcetera. So all the things we talk about in the connected world, I think it does get quite sharply focused in the area of voice. We've got some terrific partnerships running with Amazon right now on Alexa, for example, and we think we've got a we're pretty much at the leading edge in terms of the dialogue and investigating how our brands can play in that space. But by all means, let's pick that up with the guys tomorrow. The what was your first question?
Oh, share buybacks. Look, really, what we are being guided by is that 2x leverage level. And it will be a little bit of a shock absorber. Sometimes, we'll be under it. Sometimes, we'll be above it.
But when that happens, we'll look at all forms of dealing with that. We would hope because of our high ROIC and because of our growth model and the fact that we think we're better investing in the business for a higher return. We'll try and continue to find ways of investing in the business of Unilever in order to sustain the returns and accelerate our growth. That would be our preference. But if we don't get there, then yes, we will look at returning capital to shareholders to swing and equilibrate around that 2x level.
I don't think we can be too specific or pernickety about it. If it sends up drifting a little bit higher, then we have that discussion. If it gets a little bit lower, then it probably means we've been pretty active in being able to change the portfolio a little bit faster. So obviously, we'd like it to be higher rather than lower, to be honest. And that would indicate that we're investing more within the business where we think we can generate a higher return.
But definitely, that's how we would have that philosophy, and that applies to the Spreads divestment as well. Okay. Iain, I'm going to hand you over to Iain Dunning, who's been very involved, by the way, in this terrific building that we've been enjoying today. But Iain, you're going to tell everybody about the buses and whatnot for this evening.
Absolutely. Thank you, Graham.
Okay.
So a little bit of logistics. We've got 8 coaches this evening, which are all going to be staged up at the very front of the building. So the same route you came in this morning, make your way back through there. So we've got a couple of larger ones and then 6 of our smaller branded shuttles going back. We're going to have a member of our team, so whether it's the event team or the IR team, we'll be on each of the coaches to make sure we look after you there in case there's any issues.
Just a reminder, if you've left any coats or luggage, please make sure you collect it on the way out. We don't want anyone getting separated from their luggage and belongings. Now we have chosen a wonderful night to go into Manhattan because it is Manhattan Gridlock Day because they're turning on the lights at Rockefeller Center, okay? So we are expecting probably quite heavy traffic. So what we would ask is, as we leave here, if everybody could make their way as swiftly and smoothly to the front so we can get the coaches on and get them departed.
We're expecting probably about an hour's transfer. So if you do need to quickly make a dash to the restrooms, please do that before you go, will be important. And we're going to be dropping off at 58 Street, which is actually the rear of the hotel, but the hotel will be there to let us in through their rear guest entrance, okay? So don't worry about going in the rear of the buildings. It's going to be the quickest way of getting in.
And then just a final reminder, tomorrow morning, the coaches again from that rear entrance will be departing from 8 a. M. To make sure we get you all here for a nice prompt 9 o'clock start as we'll be starting the broadcast at 9. So the coaches from 8 o'clock from the hotel. Thank you.
I hope you've had a great day.