Unilever, one of the world’s largest and leading companies, acquired Lipton International in 1971 and became a global leader in tea industry. Tea market is consistently growing and is dominated by Lipton tea, Twinings Tea, in addition to Tetley Tea. Unilever's global brand development director of Lipton Tea Michiel Leijnse faces a very important meeting with Unilever CEO in a few short hours. He has to make a decision concerning sourcing Lipton Tea 100% sustainably, recommend strategies on how Lipton can become credible with consumers, obtain sustainable certification, integrate sustainable practices into Lepton's entire supply chain, and tell customers about it. The decision has to take into consideration the financial implications in addition to indicating a reasonable return on investment. There are so many issues relevant to resourcing Tea sustainably so we confined the problem statement to the three most troublesome issues, namely: to become credible with consumers, obtaining sustainable certificate from a credible partner and implementing farming sustainable practices. To fully understand Unilever's situation, we ran a thorough analysis to assess Unilever situation in term of Industry Dominant Economic Characteristic, the five competitive forces, the major Driving force of change, VRIN test for Resources and Capabilities, SWOT analysis and Key Success factors for tea industry. Despite the many challenges facing this initiative that would affect the outcome of the sustainable tea resourcing, all mentioned analysis showed that this initiative is beneficial for Unilever. We highly recommend Unilever to adopt and lead the transformation of the new Lipton brand, and to execute this option employing the highest standards and best practices. Suggestion were made regarding choosing a certification partner who possesses a significant overlap with Unilever’s strategic approaches, the usage of on- field training programs to empower farmers with the required skills and the use of innovative marketing to communicate credibility and the advantages of sustainable tea resourcing to consumers.

1. Tea Production by Sustainable
Practice at Unilever
APRIL 11TH , 2015Amani Siam, Hazem Tirhi, Mahmoud Abu Farha, Mohammad Abu Libdeh

2. Sustainable agricultural practice
• Planting cover crops
• Soil enrichment (using Plant & Animal residuals)
• Utilizing natural pests’ predators
• Bio-intensive best management

3. Established
1929 1971 1980s 1990
Since
2000s
Acquired
Lipton Int’l
World’s
26th
largest
company
Restructered
into 4 core
Businesses
(home care,
personal care,
foods, &
specialty
chemicals)
Adopted the
strategy of
expansion
through
acquisitions
leader in sustainability, integrated into its business strategy and culture
2003
2004
Established
Unilever Health
Institute,
founded
Nutrition and
Health
Academy
Analysis: Unilever history

4. Analysis: Unilever Mission & Logo
represents its diversity
Mission: “to meet every day needs for nutrition, hygiene and personal care
with brands that help people look good, feel good and get more out of life.”

5. Analysis: Tea Industry,
Three Major Players

6. Why Sustainability in Tea Industry?
Social Life
of workers
(poorly managed
plants, dangerous
conditions, etc)
Environmental
impact of tea
production
(Habitat biodiversity
destruction, huge
release of Carbon,
etc)

7. Problem Statement
Unilever
mission
statement
Unilev
er's
cultur
e
producing 100% of its tea through sustainable resources
Drive Unilever
Brands to take a
stronger stance
on social and
environmental
issues
Many problems face this
Unilever's initiative

8. Problem Statement:
Traditionally
produced Tea
Sustainably
produced Tea
Strategic Decision
Scale of
changes
future of
the brand
financial
implications
direction of
Unilever’s
multinational
business strategy
Competitive
Forces
Michiel Leijnse (Unilever's global brand development director of Lipton Tea) faces a very important meeting
with Unilever CEO. He has to recommend strategies on how Lipton can become:
•Credibility with consumers.
• Integrating sustainable practices into Lipton's entire supply chain
•Obtain sustainability certification
•Communications with Customers

9. 1
Options for Solving Problems
Drive Unilever
Brands to take a
stronger stance
on social and
environmental
issues
Obtaining sustainable
certification for Lipton
Tea
Integrating and
crafting sustainable
practices into the
entire supply chain
Telling customers
about it 4
To become
credible with
consumers
Marketing
experienc
eheritage
Message of healthy
Product/ benefit to
farmers or Both
Rainforest
Alliance
FLO
UTZ
Certification
On-land Training
HQ training
(dramatic / incremental)
Resolution Options

10. Situation Analysis:5 Competitive
Forces
Industry
Five
Competitive
forces
Bargaining
power of buyer
(High)
Competitive
force of
substitute
(depends)
Supplier
bargain power
(Low)
Competitive
force of new
entrant
(Low)
Competitive
Force of rivalry
among sellers
(High)

11. Major Driving force of change
Changing societal concerns, attitude
and lifestyles that demand a more
transparently sourced and credible
product.
Bargaining
power of
buyer
(High)
Competitiv
e force of
substitute
(N/A)
Competitiv
e Force of
rivalry
among
sellers
(High)
Competitiv
e force of
new
entrant
(Low)
Supplier
bargain
power
(Low)
Industry
Five
Competitive forces
The five
competitive forces,
Major Driving
forces
Attractive
opportunity to
increase their
market share

12. Situation Analysis: VRIN
•The expected high quality input through successful
innovation of sustainable resources farming techniquesValuable
•knowledge based core competence residing in brand
management capabilities, vertical integration and a
powerful certification agency executing the strategy
Rare
•combination as a whole cannot be easily copied,
beaten, matched or imitated because of the superiority of
the know-how
Inimitable
•Unilever sustainable culture and not easily substituted
Non-
substitutable

13. Strength
- Long term history of success
- Intellectual capital
- Strong brand name & Co. reputation.
- Vertical integration.
Weakness:
- Insufficient information about
Customers & Rivals responses
- High cost & huge financial implications.
Threats
- Growing bargaining power of suppliers.
- Weak or no respond to new product.
- Higher prices are a barrier to
sustainable consumption
- Weak or no response of tea farm owners
Opportunities
- Expanding to meet a broader range of
customer needs
- Already existence of a substantial
market for Unilever
- Market size is big with only three major
players.
Situation Analysis: SWOT

14. Key Success factors for tea industry
KSF
Access to
skilled
labor
Expertise
in tea
industry
Scale of
economy
known,
respected
brand
Quality
control,
know how
Experienc
e curve
effect
Overall
low costs
Vertically
integrated
National,
global
distribution
capabilities
3
5

15. Recommendations:
•To adopt and lead the transformation of the Lipton brand
•To execute this initiative strategy at the highest standards and best practices
•To take full advantage of learning curve method to be as cost- efficient as possible
•To try to reach economy of scale by work at full capacity to achieve the cost- efficiency

16. Implementation & Control
•Announcing the existence of sustainable tea long before it is in the market.
•Story telling of the idea behind sustainably resourcing tea
•Choosing the right medium to disseminate the story
•Choosing a celebrity as brand ambassador
•Holding brand name awareness campaigns
•Special promotions & allowances for retailers
To become credible with consumers:

17. Implementation & Control
•Choosing a certification agency that complies to the newest standards of sustainable
farming
•Choosing certification agency that is respected & accredited by consumers
•The chosen agency should have the resources to handle certifying a brand as large as
Lipton in a timely manner
•Its seal of certification brand should not overshadow or overpower Lipton’s brand
Obtaining sustainable certification for Lipton:

18. Implementation & Control
•Start implementation and certifying farms estates in Kenya
•Design a program for on-land farmer field training process
•Empower and build labor skills by utilizing learning and experience
•Empower some locally-elected farmers who succeed in the individual training sessions to lead
smallholder training through actionable activities
Integrating sustainable practices into the supply chain:

19. Sustainability in the Tea Industry