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 document outlining the company’s commitment to improving the health of its employees, suppliers, and customers, while also reducing environmental impacts and sustainably sourcing 100% of their agricultural raw materials used in production. Our world faces enormous challenges with regards to food security, reducing poverty, sustainability of resources, and climate change, as well as social, economic, environmental development. Unilever CEO Paul Polman realized the interdependent hardships that we all will experience if these issues go unchecked and implemented the Unilever plan with the hope that meeting the company’s ambitious goals would encourage product innovation, drive savings, and increase differentiation across the company’s portfolio of products. HAS RAINFOREST ALLIANCE CERITFICATION BEEN SUCCESSFUL FOR UNILEVER? Unilever’s decision to pursue certification was relatively easy one considering the fact that the approach to sustainable agriculture by Rainforest Alliance was in-line with the goals established by Unilever. A great deal of success has been experienced by Unilever through their Rainforest Alliance Certification initiative. There have been increases in sales and market share, positive impacts on the environment, but...