Sustainable Tea at Unilever

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REV: DECEMBER 21, 2011


Sustainable Tea at Unilever

op yo To survive and prosper over the long term, learn how to adapt your business model by making it servant to society and the environment. Not the other way around.
— Paul Polman, CEO, Unilever

In 2010 Unilever announced its commitment to a new “Sustainable Living Plan”, a document that set wide-ranging company-wide goals for improving the health and well-being of consumers, reducing environmental impact, and, perhaps most ambitiously, sourcing 100% of agricultural raw materials sustainably by 2020. Such a goal implied a massive transformation of a supply chain that sourced close to 8 million tons of
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India, for example, was a major tea producer and consumer, but the small scale of many of the farms and the nature of local farming practices made certification a significant challenge. What should Unilever do in such markets? Should Unilever hold fast to Rainforest Alliance certification or instead work to implement incremental change through standards better suited for Indian practices? How could they persuade hundreds of thousands of smallholders to adopt new farming methods in market s where most tea production and consumption was local and Unilever was far from the dominant buyer?

op yo The second issue was whether and how Unilever could gain market advantage from its move to sustainable tea. While the adoption of Rainforest Alliance certification appeared to have led to market share growth in some Western markets, it was not clear either that this would continue or that the concept of a sustainability message would resonate with consumers in developing markets like
Turkey, India, or Russia. How should Unilever market its sustainability efforts in emerging markets?
Beyond these two key issues several other smaller but also potentially important questions also consumed Unilever’s attention. The Unilever Sustainable Living Plan committed the company to

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