Case Study

Unilever sustainable tea: Leapfrogging to mainstream

20 pages
December 2010
Reference: IMD-2-0157

The case documents Unilever’s journey toward exclusively using certified sustainable tea in its major tea brands. It illustrates the decision of Lipton’s executives to source all tea from Rainforest Alliance CertifiedTM farms and follows their efforts to raise it to a higher level within Unilever by positioning it at the core of an ambitious market transformation effort. It provides a framework for discussions around the business case for sustainable sourcing of mainstream brands. It also raises questions related to the potential economic impacts for Unilever and its competitors of transforming the entire industry to certified tea. The case sets the scene for discussions around the challenges of supply chain and market roll-out of sustainability conversion of high value brands. On the supply-chain side, it shows Unilever’s approach of obtaining quick wins by going for the “low hanging fruits” in sustainability conversion, supported by already existing capacities in Lipton’s own tea plantations in Kenya. It also follows the company’s efforts to extend training and certification to more fragmented parts of its supply chain. On the market side, it shows the case for an accelerated roll-out. It documents how Unilever changed its initial strategy of focusing on the Western European market for the first three years by quickly expanding to Japan, the US and Australia. The case ends by pointing to the significant challenges Unilever faces as the demand for certified tea grows exponentially and other major players in the global market begin to certify their own brands. It also describes Unilever’s dilemma when it considers taking an even bigger step: extending sustainable sourcing to the domestic market of India, the world’s biggest producer and consumer of black tea.

Learning Objective

1) To gain an understanding of the business case for major brands to convert to sustainable sourcing. 2) To identify the dilemmas involved in rolling out sustainable agriculture certification with regard to the supply chain and the market. 3) To understand the framework of market transformation for sustainability and its business case. 4) To recognize the change in the traditional perception of business responsibility by promoting action on sustainable agriculture and other “mega-issues.”

Keywords
Sustainable Agriculture, Tea, Brand Development, Corporate Sustainability Management
Settings
Global
Unilever
2006 - 2010
Type
Field Research
Copyright
© 2010
Available Languages
English
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