Sustainable Tea at Unilever Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Sustainable Tea at Unilever Case Study Solution

Global Market of Tea:

After water, one of the most preferred and popular beverage worldwide is tea. About 70% of the global producer of tea were Sri Lanka, Kenya, India and China with 46 other countries producing about 4 million tons of tea. Kenya accounted 8 percent of the global tea production but was one of the largest tea exporter. The biggest importers of tea who accounts for about 30 percent of global tea imports include United Kingdom, United States and Russia. Traditionally, the market of global tea has faced problems from oversupply of the product. Since 2000 to 2010, the moderate gains in tea price were 35 percent lower compared to those in the mid-1980s.

The production of tea is a labor intensive work. Inappropriate management of tea production might give rise to a number of environmental and social concerns. The bad conditions of working had been reported on poor management of plantation that damaged health of workers through harmful agrochemicals and pesticides exposure. For small scale tea producers of growing tea cash crop, the production of tea implies the tropical rain forest conversion into an agricultural land reducing diversity of local specie and degradation of soil. The excessive use of pesticides and fertilizers affect the quality of soil and pollute local waterways and soil. The contribution of commoditization to a spiral of downward price pressurizing workers and the environment.

Recommendations

After taking into consideration the significant analysis concerted to the value chain and the need to ensure that the 100 percent supply chain of the company is sustainability sourced, it is recommended that the company should adopt and lead the transformation of the Lipton Brand. Also, the company should execute this initiative of the best practices and highest standards. Additionally, the company need to take the full advantage of the learning curve method to be the cost efficient. It should put its concentration on reaching the economies of scale by working at the full capacity so that it would be able to achieve the cost efficiency (Ram Nidumolu, 2009).

In addition to this, it is considerably important for the company to consider the difference between developing as well as Western markets to pursue the Rain forest Alliance Certification. Even though, it is the long term procedure, the demand for the sustainable products has been growing with the passage of time, thereby the sustainability of the organization and the increasing demand for the sustainable products in market, a company should pursue the Rain forest Alliance Certification. The company should ensure that the farms are being monitored for the compliance purpose, otherwise there is a likelihood that it might lose its credibility (Fishbein, 2017).

Furthermore, the restructuring of the supply chain in the responsible and sustainable manner at Unilever would most likely allowing the future prospects of the company. In the initial period of time, the company has significantly initiated the highly fragmented supply chain that consisted the minority of the large estates particularly in Africa and the hundreds on the smallholders in many areas which are engaged in the tea production such as Turkey and India (Prokesch, 2010).

It is noteworthy that the transformation requires the company using third part auditor who would mark the estates on the considerable criteria that consist personal protective equipment, worker welfare, sustainable practices including cultivation & picking methods and child labor., it is because the Rain forest Alliance Certification is difficult in different countries including India that has proven to be specifically challenging as there has been little government regulatory devices in place that can confine the practices which are not sustainable particularly child labor and the toxic pesticides usage.

Moreover, the company should keep working with the Non-Governmental Organizations (NGOs) and agricultural experts with the intent of promoting the agricultural sustainability programs which are designed in order to safeguard the future suppliers of its raw material while promoting ecological benefits, good agricultural practices as well as social responsibility. Since, the Unilever tea plantation in the Tanzania, Kenya and India has been searching ways for the purpose of promoting the good agricultural practices that tend to provide ecological and social benefits. These include supporting natural diversity as well as reducing the use of pesticides and this can be done by maintain the forest strips in the tea plantation. The company has also developed good sustainable practices guidelines for the sustainable growing of tea for the smallholders. It has published these as the lead lest in the local language in Tanzania, Kenya and India, which in turn would help the company in communicating its approach to many small tea farmer suppliers.

In addition to this, it is important for the company to market the sustainable tea to the consumers due to the fact that for the shoppers in the United States, the ultimate factor to be considered when deciding what to buy is the sustainability. Since, there are many competitors in the market who has been pursuing the sustainability targets, the decision of the Unilever to not market the Lipton tea as sustainable would most likely undermine the monetary commitment and hard work of company in both short run and long run (Ghemawat, 2010)

Shortly, the company should have 100 percent sustainable supply chain, this can be done by assisting as well as facilitating the contracted producers and growers to meet the minimum qualification of the alliance, the company should create standardization and subsidization such as rewards. Also, it is recommended to the company discontinuing business with non-compliance.................

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