HOMEWORK ASSIGNMENT #2
TO: FROM: RE: DATE:
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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The other main issue related to Unilever’s sustainable farming practices in India is that child labor and pesticide use by farmers were in direct conflict with Rainforest Alliance standards. While the UN’s International Labor Organization set the legal age for employment in developing nations at 14 years old, Rainforest Alliance certification required that farms do not employ anyone under the age of 15 years old. In addition, the highly toxic pesticide Paraquat was widely used in tea production. Options for Unilever to address these challenges would be to work with local NGOs for training and implementation of sustainable farming practices, implement industry-wide initiatives, and introduce alternative standards based on and tailored to India’s local growing practices which can be used as a stepping stone towards future Rainforest Alliance certification. It may also be beneficial for Unilever to implement a national public marketing campaign based on education of Rainforest Alliance certification principles, sustainable agriculture practices, and specifically sustainably sourced tea. With tea bags and green tea emerging as growth segments in the India tea market, Unilever can gain a competitive advantage by becoming the leader in sustainably sourced tea and marketing the high quality products that will result from agricultural practices established by certification. While branded coffee shops are another growth area, Unilever