Unilever Sustainable Tea. Part II: Reaching out to Smallholders in Kenya and Argentina

Commodity value chains around the world are increasingly stressed; some even face severe and dire circumstances. This is due to myriad social, environmental and economic challenges linked to the finite nature of natural resources and rapidly growing populations. These pressures threaten not only the raw material supply for key industries such as food & beverage and textiles, but also the livelihoods of tens of millions of people and the natural resources they depend on. For this reason, companies, NGOs, and governments are actively seeking solutions to render commodity value chains more sustainable. Tea – production, processing and consumption – is one of the commodity value chains in question. Part one of this case, the first of IDH’s Market Transformation case series, documents the strategic evolution of a groundbreaking initiative by Unilever, the Anglo-Dutch food & beverage company, to make its own tea value chain sustainable. This initiative started with the popular Lipton and PG Tips brands in specific countries and is gradually rolling out in other regions of the world. By reading part two of this case study, business executives and other stakeholders will learn from Unilever’s journey in multiple ways. The company, recognizing that no single entity can solve the complex issues around conversion of the tea value chain on its own, entered into a partnership with the Rainforest Alliance. Through Rainforest Alliance certification of tea plantations, the partnership has accelerated a transformation to sustainable Unilever tea products. Part two of the case study focuses on the very different experiences of Unilever “on the ground” in Kenya and Argentina. The lessons learned from building the partnerships in each country and the “win-win” outcomes for the players involved are carefully extracted and reported in each case. The Kenyan and Argentinian case stories are excellent examples of how companies, by carefully building multidimensional business cases for sustainability and strategic execution plans that account for the specific challenges of sustainability and partnerships, can grasp opportunities and forge new markets. It shows how companies can become first movers and leaders in contributing to more sustainable business models, stimulating multiple local environmental, social and economic pay o_ s while simultaneously ensuring the financial and longer-term sustainability of their core business.