Unilever Essay

1120 Words Apr 26th, 2013 5 Pages


Karl Schmidt Jared Sessum Sustainable Tea at Unilever, Harvard Business School January 29, 2013

This memorandum addresses the following questions based on information found in the Harvard Business School case study on Unilever:
Why did Unilever commit to sustainably source 100% of its tea? Has Rainforest Alliance certification been success for Unilever –why or why not? What should Unilever do with its tea business in India? Why has Unilever committed to sustainably source 100% of its agricultural inputs? Does this make strategic and economic sense?

WHY DID UNILEVER COMMIT TO SUSTAINABLY SOURCE 100% OF ITS TEA? The “Sustainable Living Plan” was rolled out by Unilever in 2010 as a
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Customers of Unilever have historically expected the highest quality tea so the implementation of Rainforest Alliance certification was also wellreceived by consumers of Unilever products. The following is a breakdown of some of the gains realized by Unilever in the first year of implementation of Rainforest Alliance Certification:
In the U.K., PG tips market share increase 1.8 points, 6% sales increase, purchase repeat rate 44% to 49% In Australia, market share increased by 158 basis points from 24.2% to 25.8 %, sales rose by 11%

In Italy, sales increased by 10.5%, market share increased 2% points, increased buyer base In the U.S., the marketing campaign spread awareness of the benefits of the certification but this did not relate to a significant effect on overall market share for Unilever products.

January 29, 2013 Page 2

WHAT SHOULD UNILEVER DO WITH ITS TEA BUSINESS IN INDIA? There is tremendous growth opportunity in the tea market in India for Unilever. However, there are at least two critical factors that could be substantial roadblocks to Unilever reaching 100% sustainably sourced tea from India. The first issue is that there is no organizational model to train and rollout the farming practices that will be required in order for farmers to reach Rainforest Alliance certification. Without established government sponsored cooperatives

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