Sustainable Tea at Unilever

rP os t 9-712-438 REV: DECEMBER 21, 2011 REBECCA M. HENDERSON FREDERIK NELLEMANN Sustainconducive Tea at Unilconstantly op yo To outlast and flourish counterpoise the desire tidings, imbibe how to mold your occupation measure by making it minister to companionship and the environment. Not the other way environing. — Paul Polman, CEO, Unilconstantly In 2010 Unilconstantly announced its executement to a new “Sustainconducive Influence Plan”, a muniment that set ample-ranging posse-ample ends for fit the bloom and courteous-behaved-substance of consumers, reducing environhyperphysical application, and, perchance most ambitiously, sourcing 100% of unroving raw esthetics sustainably by 2020. Such a end confused a solid metamorphoseation of a give obligation that caused arrepose to 8 favorite tons of movables opposing 50 unanalogous buds. Unilconstantly CEO Paul Polman appreciated that the posse’s ambitious ends could instigate savings, commodities alteration, and unanalogousiation opposing the posse’s portfolio of commoditiess. But elevate expressively, it would relinquish a posse meliorebuke accommodateed to outlast in the advenient which Polman envisaged: tC This is a universe that is defyd. When you contemplate at the interdependent defys that we aspect on acceleration shelter, destitution abatement, sustainability f resources, sky diversify, and collective, economic, environhyperphysical harvest, these defys continue nconstantly been greater. And I appreciate that these hurrys conciliate singly extendth as 2 billion elevate inhabitants penetrebuke this universe and numerous mount to extendth their influence measures. 1 No The diversifys happening at Lipton, Unilever’s €3. 5 billion tea infamy, were an expressive cornerstone of Unilever’s artifice. For counterpoise five years, Michiel Leijnse, the global infamy ruler for Lipton Tea, and the Unilconstantly Procurement team had led the metamorphoseation of the Lipton infamy and its give obligation towards a end of 100% sustainconducive sourcing. Approximately 25% of all Unilconstantly tea now came from Rainforepose Union Assured farms and authentic relinquishs had been made in the collective, environhyperphysical and economic sustainability of tea commoditiesion. The lamina of Unilever’s deepstream joint-interepose entrance was unexampled in the beverages energy, where “ethical” infamys had failed to extend elevate niche negotiate postures. Unilever’s end was to continue all of the tea in Lipton teabags caused from Rainforepose Union Assured farms by 2015, and to continue integral kilogram of Unilconstantly tea sustainably caused by 2020. Michiel Leijnse was assured that these ends could be achieved but the occupation aspectd two ticklish ends as they commoditiesed to fabricate them a authenticity. Do The foremost end was how Unilconstantly could metamorphose a give obligation that was not singly geographically very definite but as-well-behaved greatly fragmented. Unilconstantly bought tea from all producing regions, and in numerous negotiates the seniority of commoditiesion was contro lled by slightholders who sold their tea at unconcealed auctions. Unilconstantly and the Rainforepose Union had consummationeasily assured Unilever’s own tea distinctholds ________________________________________________________________________________________________________________ Professor Rebecca M. Henderson and Elaboration Associate Frederik Nellemann (MBA 2011) comfortefficient this contingency. HBS contingencys are exposed merely as the plea for dispose argument. Cases are not calculated to subsubassist as endorsements, causes of inherent axioms, or illustrations of conducive or inconducive oration. Copyfit © 2011, 2012 President and Fellows of Harvard College. To ordain copies or solicit permission to represent esthetic s, ole 1-800-5457685, transcribe Harvard Occupation School Publishing, Boston, MA 02163, or go to www. hbsp. harvard. edu/educators. This proclamation may not be digitized, photocopied, or incorrectly representd, posted, or transmitted, outbarrank the permission of Harvard Occupation School. This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Sustainconducive Tea at Unilconstantly rP os t 712-438 nd those of numerous great artificetations, but the unwandering now aspectd the increasingly up-hill function of convincing slightholders in negotiates opposing the universe of the blessings of changing unroving usages and pursuing Rainforepose Union certification. India, for pattern, was a senior tea object and consumer, but the slight lamina of numerous of the farms and the truth of open husbandry usages made certification a suggestive defy. What should Unilconstantly do in such negotiates? Should Unilconstantly confide pay to Rainforepose Union certification or instead commodities to tool increhyperphysical diversify through measures meliorebuke accommodateed for Indian usages? How could they dispose hundreds of thousands of slightholders to graft new husbandry methods in negotiate s where most tea commoditiesion and expenditure was open and Unilconstantly was far from the dominant buyer? op yo The second end was whether and how Unilconstantly could relinquish negotiate service from its fluctuate to sustainconducive tea. Timeliness the graftion of Rainforepose Union certification answered to continue led to negotiate segregate extendth in some Western negotiates, it was not distinct either that this would redeep or that the concept of a sustainability notice would resonate delay consumers in enlargeing negotiates enjoy Turkey, India, or Russia. How should Unilconstantly negotiate its sustainability seeks in emerging negotiates? Elevate these two key ends divers other slighter but as-well-behaved hypothetically expressive doubts as-well-behaved consumed Unilever’s circumspection. The Unilconstantly Sustainconducive Influence Artifice executeted the posse to sourcing 100% of all unroving raw esthetics sustainably by 2020. Did this medium tender to sustainconducive paper in tea bags and throngaging or to sustainconducive ingredients caused in very slight amounts—such as chamomile—where there was ordinaryly no sustainconducive give? If so, what was the best way to entrance such fluctuates? And elevate broadly, were there terminateons in Lipton’s knowlbprescribe for the repose of Unilever’s unroving give obligation and for the ability of sustainability as a cause of consumer unanalogousiation? Unilconstantly tC Unilconstantly and Lipton Tea No In 2011 Unilconstantly was one of the universe’s inherent consumer chattels companies, dispose-ofing integralfiction from acceleration commoditiess to specific arrangement and settlement arrangement chattels. It was a posse delay a global attain, delay sales advenient from elevate than 180 countries, counterpoise half of which were in the enlargeing universe. Worldwide, counterpoise two billion consumers used Unilconstantly commoditiess each day, and 2010 fruits was counterpoise €44 billion ($59 billiona). 2 Harmonious counterpoise half of these sales came from accelerations and beverages, delay 31 % of sales in specific arrangement and 17% in settlement arrangement (see Exhibit 2 for breakdown by limb). The posse filled 167,000 inhabitants globally. Ample of the posse’s consummation was due to its portfolio of brawny infamys. The posse had 12 infamys delay idiosyncratic sales counterpoise €1 billion per annum, including such amplely reordinary commoditiess as Lipton, Dove, and Axe . Do The posse aspectd race from a calculate of other great consumer chattels companies , including Procter & Gamble, Nestle, and Colgate-Palmolive. (See Exhibits 3-5 for elevate homogeneousity financial relishnesss). a Using exdiversify rebuke of €1 = $1. 35 as of December 2, 2011. 2 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. 712-438 rP os t Sustainconducive Tea at Unilconstantly Unilconstantly Tea Lipton Tea was the greatst tea infamy in the universe delay annual sales of barly €3. billionb. Unilever’s tea portfolio contained a calculate of other brawny regional infamys such as PG tips in the United Kingdom (U. K. ), Lyons in Ireland, and unassured other infamys in countries environing the universe, including India, Pakistan, Russia, and Poland. Lipton’s global negotiate segregate was air-tense three eras that of its nearepose compete, Tata Beverages, the owners of Tetley Tea. Lipton teas were sold in counterpoise 130 countries, delay purpose belovedity in Europe, North America, the Middle East, and calibre of Asia. Growth in the exposed universe was in the ordain of 1%-2% a year, but the negotiates of the enlargeing universe—specifically India and China—were seen as purposely cautious, delay anticipated annual extendth rebukes of arrepose to 10%. op yo In 2010, Unilconstantly sold air-tense 350,000 tons of tea. Air-tense 90% came from visible suppliers, delay the leavings advenient from Unilever’s own distinctholds in East Africa, including its flagship distincthold in Kericho, Kenya. Integral negotiate had a definite critique in tea, making it to some measure reliant on give from purpose countries. For pattern, the North American negotiate caused ample of its tea from Argentina, gone its tea was purposely courteous-behaved-behaved accommodateed for iced tea, which was beloved in the U. S. The Global Tea Negotiate tC Tea was the universe’s most beloved beverage succeeding instil. In 2009, barly 4 favorite tons of tea was manufactured in 46 countries, delay China, India, Kenya, and Sri Lanka accounting for 70% of global commoditiesion. 3 Kenya, where ample of Lipton’s tea was manufactured, accounted for barly 8% of global commoditiesion,4 but was the universe’s greatst exporter of tea (see Exhibit 14 for a breakdown of global tea commoditiesion). No Russia, the U. S. , and the U. K. were the biggest net importers of tea, accounting for air-tense 30 % of global imports. 6 Tea was consumed for a destruction of reasons and in a ample destruction of unites. For pattern, Japan delay its brawny indulgent for crude tea consumed barly a fifth of all global crude tea give. Tea was an ingrained segregate of daily distincthold in numerous countries for cultural and literal reasons. In other calibre of the universe, tea was beadvenient increasingly beloved due to its perceived bloom blessings. 7 Historically, global tea negotiates had suffered from counterpoise-supply. The ending expense hurry was exacerbated by tea’s eminent limit of commoditization, low switching consumes for consumers, and tea’s perishability, which mediumt expenses were reiterateedly cut drastically to distinct stocks. 8 As seen in Exhibit 6, opposing moderebuke relinquishs in the expense of tea gone 2000, the expense of tea in authentic tidingss in 2010 was quiet 35% inferior than its peak in the mid-1980s. 9 Tea Evolution and its Consequences Do Tea commoditiesion was a very drudge-intensive energy. With a few regional malcontent, tea commoditiesion occurred year-round, as the top two to three permissions of the artificets were arrangementeasily drudgeer- b This relishness comprised some sales authenticized through the joint-venture delay Pepsi on ready-to-drain commoditiess. These sales are not comprised Unilever’s sum roundover. 3 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Sustainconducive Tea at Unilconstantly rP os t 712-438 icked integral 7 to 21 days, depbound on the elevation and sky. 10 Tea artificetsc could extend to a elevation of 30 feet or elevate, but were usually budped at encircling 2 to 3 feet and then pruned frequently in ordain to fabricate them easier to choose. 11 The permissions were plucked by drudgeer and then regularityed presently either on-site at the artificetation or at a bought-leaf deedory. 12 During regularitying, tea permissions were delayered, macerated, oxidized, dried and segregated on site. The regularityed tea was then transported to a broker or auction, succeeding which it was uniteed, sometimes savored, and throngaged. Finally, it penetrateed the applicconducive dispose-of sales channel precedently bound up delay the consumer. op yo Inappropriately managed, tea commoditiesion could construct a calculate of collective and environhyperphysical matters. The energy contained a mix of great-lamina distinctholds and slightholders, each delay their own defys. Counterpoise the years there had been reports of bad commoditiesing conditions on out-of-sorts managed artificetations that injured commoditieser bloom through peril to harmful pesticides and agrochemicals. In assured contingencys, the commoditiesforce comprised migrant drudgeers delay no refuge in contingency of sickness, pregnancy or other deedors. 3 They openly ordinary low remuneration and were not constantly ardent medical arrangement, housing, teaching or pensions. Further, in some contingencys rebellious occupation unions, when they existed, had been prisoner of rottenness or pettyness. 14 tC For some slightholders who grew tea as a currency bud, tea commoditiesion confused the interassault of tropical forests into unroving fix which could administer to abatements in open cast destruction and to stain deprivation. 15 However, for most natives unsustainconducive usages were a end of centre on increasing relinquishs and not acreage. Logging for the firefotranquillity deficiencyed to dry tea could administer to open deforestation, which could in round led to problems in instil rebellion. Some farms used inordinate amounts of fertilizers and pesticides, which could negatively favor stain bark and tarnish open stains and instilways. Years of commoditization had addd to a adown expense spiral that put hurry on commoditiesers and the environment as natives finished to safety their allowance. Unilever’s Commitment to Sustainconducive Tea No Unilconstantly foremost formal a set of amiconducive tillage usage conductlines in 1998. The conductlines outlined sustainconducive husbandry usages for the suppliers of its senior buds, including tea, bays oil and tomatoes, and comprised 10 key indicators of environmental, collective, and economic exploit, each delay their own sub-parameters (see Exhibit 7b for elevate details). The conduct was not imposed on visible suppliers, but it was segregated delay them and delay the broader despicable. This was the foremost fluctuate of this bark in the energy. Do In 2006, Michiel Leijnse began the regularity of metamorphoseing this delayin executemen t into a senior consumer-facing pattern. He appreciated that numerous Western consumers had beseem sufficiently disturbed encircling sustainability that it authority acceleration instigate commodities unanalogousiation. Elevate expressively, he saw this as an opening to metamorphose the whole tea energy , blessinging not singly tea commoditiesers and the environment, but as-well-behaved dissipationrs of tea who were reliant on a bloomy give obligation. Sensible that such a metamorphoseation was not consumeless, Leijnse explained the pattern’s rationale: If we didn’t do bigwig to metamorphose the energy, at some purpose we harmonious wouldn’t be conducive to get the bark and measure of tea we deficiency. While we authority see negotiate segregate relinquishs in c There are two deep varieties of the tea artificet: China and Assam. The Assam destruction, which is used in India and Kenya, is the most despicable. All varieties can and are used to relinquish crude and sombre tea. There are numerous barks of hybrids betwixt the varieties, and other deedors enjoy stain, sky, elevation, chooseing era, and regularitying all favor t he savor. 4 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. 712-438 rP os t Sustainconducive Tea at Unilconstantly some negotiates, it won’t constantly be the contingency. It is a defy to truly align the deficient -tidings and desire-tidings interests of the infamy. Tea Certification and the Rainforepose Union op yo Leijnse and his team resolute to chase certification for the infamy, and chose the Rainforepose Alliance, a exercise portion and secretariat of the Sustainconducive Tillage Netcommodities (SAN), as its certification segregatener. There was suggestive counterpoiselap in twain Unilever’s and Rainforepose Alliance’s entrance to sustainconducive tillage usages, in that twain centreed on environmental, economic, and collective deedors. Further, the Rainforepose Union centreed on negotiate-based augmentments rather than unwandering expense deeptenances (characteristic, for pattern, of FairTrade commoditiess) as the best way to relinquish diversify. The Rainforepose Union had some consumer confession from anteriorly consummationful promisements avering a dispose of other movables, including bananas, coffee, and cocoa but had no anterior knowlbprescribe delay tea certification or on the African continent, where Unilconstantly had decades of knowlbprescribe from its tea distinctholds. Unilconstantly set ambitious targets for the toolation of Rainforepose Union certification. By 2011, its judicious target of having all Lipton Yellow Letter and PG tips tea bags in Western Europe assured by 2010 had been consummationeasily achieved. Lipton had executeted to sourcing all the tea in Lipton tea bags from Rainforepose Alliance-assured distinctholds by 2015, barly a third of all Unilconstantly tea magnitude. And if Lipton were to conface the executements of the Sustainconducive Influence Plan, by 2020, 100% of Unilever’s tea would deficiency to be sustainably caused, although the Artifice did not execute Unilconstantly to using tea from Rainforepose Union assured farms. tC The certification regularity Rainforepose Union certification evaluated farms according to 10 truths crust ends such as commoditieser thrift, farm oration, and environhyperphysical refuge , each delay its own criteria. 16 The Rainforepose Union assured whole farms, so that in ordain for any of a farm’s buds to be assured, the whole commoditiesion area for all buds had to conface the measures. In ordain to conciliate and supcrush certification, a farm had to be in obedience delay at meanest 50% of the applicconducive criteria associated delay each truth and delay at meanest 80% of the sum set of applicconducive criteria. Further, there were fifteen ticklish criteria which were mandatory for certification, arrangementterminate of counterpoiseall obedience (see Exhibit 7a for knowlbprescribe on certification measures). 17 Do No Timeliness rebellious natives weary the consumes of complying delay the Rainforepose Union measures (for each distincthold or assembly substance assured free, there was a certification consume of barly €3,000 to €4,500, or $4,000 to $10,000, depbound on farm magnitude18), Unilconstantly as-well-behaved incurred consumes in choosing to buy assured tea. First, Unilconstantly remunerated a augmentment for the tea. In 2011, this was barly €0. 08 per kilogram of tea. In 2010, the mean negotiate expense per kilogram of tea was €1. 69 ($2. 28). 19 In the negotiate for assured coffee, expense augmentments of 15% had been seen. From 2011, Unilconstantly had to pay the Rainforepose Union a segregateicipation fee in ordain to butt the form’s frog logo on its throng.. This fee was €0. 0089 ($0. 0125) per kilogram of tea. Unilever’s Procurement form abandoned six liberal-era equiponderant inhabitants to commodities on the roll-out of global certification teaching and elapsed barly €200,000 per year on the harvest and deployment of native inoculation in union delay the Rainforepose Alliance. Scaling Certification in the Give Obligation Unilconstantly had to aver air-tense a forbearance of its tea magnitudes to conface its 2010 ends. Ardent the stagnation of any pre-vigorous assured causes, Unilconstantly and the Rainforepose Union aspectd a suggestive defy in enlargeing great magnitudes of assured tea in a adjustmentately deficient era continuance. To oration this, 5 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Sustainconducive Tea at Unilconstantly rP os t 712-438 Unilever’s seeks judiciously centreed on avering Unilever’s own commoditiesion in Kenya and Tanzania as courteous-behaved-behaved as some of its greatr and meliorate-managed tea suppliers. Achieving the unwandering’s 2015 and 2020 ends would call-for commoditiesing elevate down the give obligation delay slighter, terminate systematic suppliers dissolute in a ample destruction of unanalogous countries, each of whom had unanalogous unroving usages, council deeptenance, and institutional ability. Unilconstantly had been consummationful in construction a assured give obligation in East Africa. Could this be replicated opposing the whole give obligation? The Certification of Unilever’s Own Estates in East Africa op yo The Unilconstantly distinctholds in Kenya and Tanzania were the foremost sites to be assured. Unilconstantly had actively commoditiesed to maximize desire-tidings relinquishs and to regulate consumes constantly gone artificeting commenced on the 13,000 hectare distincthold20 in Kericho, Kenya, in 1928. For pattern, tea bush prunings were left on the room to rot, rather than substance removed as desolate or for use as firefotranquillity or cattle acceleration, a usage that maximized stain fertility and instil rebellion. The distincthold as-well-behaved arrangementeasily managed its fertilizer use. Fertilizer was not singly proud-priced but as-well-behaved a virtual menace to stain bark if mismanaged. On-site hydroability granted reliconducive electricity at one-third the consume of ability bought from the Kenyan grid , and the tea was dried using fotranquillity caused from pay-growing eucalyptus forests artificeted on the bprescribe of the distincthold. In opposture to distinctholds in Asia, Kericho made singly minimal use of agrochemicals and other pesticides, twain consequently of the favorconducive sky and as-well-behaved through misapply oration of the outbarrank fix which was settlement to true predators of numerous pests. tC The Kericho distincthold as-well-behaved invested in the bloom and courteous-behaved-substance of its 16,000 treatees and their dependents. The treatees, who were remunerated a unwandering sum per kilo of tea plucked, typically earned twoand-a-half eras elevate than the open unroving reassist wage. In abstracted, Unilconstantly granted them delay distinct homogeneousity to posse housing and bloom arrangement, including the posse’s hospital and pharmacies and the treatees’ fruit were initiated in posse-owned schools. 21 The posse had of-late invested €1. 2 favorite to update numerous of these facilities. No The Kericho distincthold achieved some of the eminenordeal relinquishs in the universe , delay annual relinquishs of 3. to 4 tons per hectare, compared to an mean of 2 to 3 tons per hectare in India. At the Unilconstantly distincthold in Tanzania, which followed homogeneous usages, the relinquishs were 3 tons per hectare compared to terminate than 2 tons per hectare in the repose of the dominion. “The sustainability commodities we did at Kericho made amiconducive unroving sagacity, and in the desire run it as-well-behaved made amiconducive financial sagacity,” explained Ricarduous Fairburn, prior managing ruler of Unilconstantly Tea East Africa. “We know that this is barely the way the energy deficiencys to operebuke in ordain to outlast and fatten. To elevate extendth the give of assured tea, Unilconstantly verified a anteriority schedule of its greatr suppliers in Africa, Argentina and Indonesia. Numerous of these distinctholds were already professionally managed and were assured forthcoming adjustments to vigorous usages using availconducive tools. 22 Inaugurated Down the Give Obligation Do Judicious consummation delay slight-confide natives in East Africa Certifying the 500,000 Kenyan slightholders from which Unilconstantly dissipationd tea was a ticklish ingredient of the Rainforepose Union roll-out gone East Africa fragmentary accounted for air-tense one third of Unilever’s sum tea call-forment. Fortunately, Unilconstantly was conducive to commodities delay the Kenyan Tea Harvest Agency (KTDA) and delay the IDH, the Dutch Sustainconducive Occupation Initiative, to plan a program that “skilled the retinueers” and led to the swift diffusion of sustainconducive husbandry usages opposing the dominion. 6 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. 712-438 rP os t Sustainconducive Tea at Unilever The KTDA was a greatly respected native’s cooperative crust 62% of all Kenyan prod uction through 59 deedories. Its end was to acceleration open natives captivate meliorebuke expenses as courteous-behaved-behaved as to procure inoculation and other origination services. In 2011, Unilconstantly bought barly 40% of KTDA’s commoditiesion. 23 Unilconstantly commoditiesed delay the Kenyan Tea Harvest Agency (KTDA) and the Rainforepose Union to initiate the openly-elected administer natives who did the integrity of the slightholder inoculation. Each deedory elected 30 to 40 administer natives, each of whom ordinary barly three days inoculation. Most of the inoculation consumes were free by interdiplomatic donors enjoy IDH but it was expected that the KTDA would besides captivate counterpoise this part, estimated to be encircling €1 to €2 ($1 to $3) per tea native. 24 op yo Each administer native was expected to retinue barly 300 other natives through assembly and idiosyncratic inoculation, delay the centre of the inoculation substance drudgeers-on illusion of sustainconducive unroving usages. The confrontings could as-well-behaved be used as a way to extendth sensibleness of the virtual expense augmentments remunerated for Rainforepose Union assured tea. The certification criteria were essential-qualityterminate down into enjoymentconducive activities that could be abundantly infectious and the Rainforepose Union accelerationed enremote artterminate posters and recrush schedules that the administer natives coul d segregate (see Exhibit 9 for an pattern). The regularity was planed to be very segregateicipatory, and elevate technical deeptenance was granted by the KTDA’s origination officers, who as-well-behaved ordinary inoculation. 25 Certification was systematic at the deedory roll. For the visible audit, the Rainforepose Union or an verified third segregatey repressed obedience delay a pattern of natives at purposeless. Prior to this, each native was as-well-behaved delayinly audited by a administer native, but nconstantly by the selfselfselfidentical administer native who retinueed them. Administer natives ordinary some artistic financial deeptenance in the foremost year to ccounterpoise the consumes associated delay their seeks. tC Most of the diversifys asked of natives did not call-for great diversifys in usage or ample cannonade. For pattern, getting natives to permission their pruning in the room (to amend stain bark) rather than retender them for use as firefotranquillity call-ford persuading natives to artificet trees for fuel. Tree seeds were very vile and Unilconstantly subsidized the consume. Farmers were as-well-behaved encouraged to fabricate compost from fundahyperphysical desolate rather than enduring it, as courteous-behaved-behaved as making meliorebuke use of desolate and washing instil. No Some diversifys were proud-priced. For pattern, the Rainforepose Union measures call-ford the use of specific protective equipment for the spraying of (approved) pesticides. This could consume up to $30, half a month’s allowance for a slightholder 26. However, the KTDA set up its own micro-credit machination to second natives delay these barks of dissipations, and in some settles, the open slightholders had pooled coin to buy a one set which was segregated. 7 A manage con-counterpoise performed by Unilconstantly in 2004 pretexted that sum net cannonades were terminate than 1% of sum currency farm allowance for the foremost year. Do Numerous of the farms saw relinquish relinquishs of 5%-15% from the toolation of elevate sustainconducive usages, amendments in the bark of the tea, and abatements in dissolute consumes as courteous-behaved-behaved as eminenter expenses for their tea. Mean allowance extendthd by an estimated 10%-15% and Unilconstantly as-well-behaved felt that sustainconducive usages would acceleration natives meliorebuke mold to the climatic diversifys, enjoy irregular rainfall patterns, that numerous opens were already witnessing. 8 But according to Ricarduous Fairburn, the most conspicuous blessing to natives was in their specific empowerment: “The Kenyan slightholders are besides essential-qualityed in creating a farm in amiconducive bloom that can be passed on to advenient generations. That was the ’sustainability’ that resonated delay them. ” By 2011 the Rainforepose Union had consummationeasily assured counterpoise one-third of the slightholder natives in Kenya, and Unilconstantly was assured that at-last all Kenyan slightholders would relinquish certification. One hopeful proof was that some of the foremost assemblys to beseem assured had gone 7 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Sustainconducive Tea at Unilconstantly rP os t 712-438 rebelliously blooming their certification. 29 Whether this measure could be rolled out to other tea extbound regions enjoy Turkey and India was, of continuity, quiet in doubt. Marketing the Sustainconducive Notice to Consumers op yo While Unilever’s procurement form took the administer on sustainconducive sourcing, Leijnse’s senior function was to perpend whether and how the posse’s executement could be translated into extendthd sales or negotiate segregate. This seek was perplexed by the deed that Unilconstantly had a portfolio of tea infamys, each delay its own definite infamy declaration. Leijnse had part for Lipton, the greatst of the infamys, but he deficiencyed to commodities arrestly delay his comrade infamy directors opposing the nature to bring-environing misapply notices and to announce them courteous-behaved. His elaboration suggested that an increasing calculate of consumers were essential-qualityed in a infamy’s religions posture and that probefficient enjoyment could diversify consumer indulgents, but no one appreciated that any of Unilever’s tea infamys should beseem “green” infamys. “Certification was nconstantly entranceed as crude negotiateing, but rather as a new negotiateing notice for consumers,” explained one director confused delay the U. K. promisement. “Consumers aren’t choosing our commodities consequently it’s crude, but consequently this new notice was aligned delay their expectations for our infamy. ” Retailers were very deeptenanceive of the assured tea —some flush call-fored it—gone the commodities was courteous-behaved-behaved aligned delay the dispose-ofers’ own sustainability patterns for their occupationes and give obligations. Opposing this, none of the infamy directors scantinessed to assault a augmentment for sustainconducive tea. Instead they hoped to use certification to boost infamy equity and, perchance, negotiate segregate. The Early Successes of the Rainforepose Union Pattern tC Rainforepose Union certification was inaugurated delay liberal-lamina negotiateing promisements for all of Unilever’s biggest Western European and Australian tea infamys, including Lipton Yellow Label, PG tips, and Lyons. In some negotiates the promisements met delay suggestive consummation. In others, besides, the application was ample elevate scant. No The PG tips consummation The U. K. negotiate was a great and expressive one for Unilconstantly , representing harmonious subordinate 10% of the unwandering’s tea commoditiesion. The air-tense €990 favorited (? 850 favorite) negotiate was dominated by two senior infamys, PG tips and its compete Tetley Tea, who each had roughly a forbearance of the negotiate. 30 PG tips was a disposeic sombre tea unite, delay few verse originations. The U. K. was broadly seen as a transitional dominion when it came to environhyperphysical policies . However, timeliness Unilever’s elaboration suggested that the mass-negotiate consumer was sensible and disturbed encircling “sustainability ends,” broadly defined, they were not essential-qualityed in paying elevate for crude commoditiess. The PG tips infamy was a mass-market, commoditiesing dispose infamy that held a settle in the integralday lives of it consumers, who were in open middle-aged and middle-income. The infamy declaration was one of sociability, rise, and light-heartedness. This was smitten in its ad promisements which were infused delay off-beat British temper. Do In 2008, PG tips was the singly infamy on the negotiate proposing any sustainability unanalogousiation. The negotiateing team treated the pattern as a senior infamy alteration and abandoned the whole €12 favorite (? 10 favorite) negotiateing bestow in the propel year 2008 to promoting the seeks. Anterior U. K. knowlbprescribe plant that it took 12 to 18 months to oration hyperphysical compartments and easily fix a notice delay consumers. The defy for the PG tips team was to perceive a notice that would resonate delay d Using exdiversify rebuke of €1 = ? 0. 86 as of December 2, 2011 8 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. 712-438 rP os t Sustainconducive Tea at Unilconstantly its nucleus consumers timeliness suppressing terminateness delay the infamy’s nucleus declaration. “It was a great defy,” explained Neil Gledhill of the PG tips promisement. “We had to confabulation to deepstream consumers in a way that explained a involved question outbarrank preaching, all in a languag e aligned delay the infamy. ” op yo The clarified notice, “do your bit: put the kettle on,” emphasized the indisputefficient enjoyment that consumers could captivate by draining PG tips. The promisement finished to continue the light-hearted essential-capacity of the infamy’s anterior promisements and used its courteous-behaved-formal characters: a confabulationing monkey oleed Monkey and a commoditiesing dispose man determined Al. In one of the ads, for pattern, Monkey, presenting a slide pretext in the kitchen, explained to Al what certification mediumt, and how comfortefficient it was for him to do the fit fiction (see Exhibit 11). The promisement used TV and print, as courteous-behaved-behaved as a deficient movie that was pretextn as a preview in cinemas and besides comprised as a DVD in peculiar preferment throngs adesire delay a tea towel. Packaging was as-well-behaved diversifyd to comprise the certification ratify and a designation of the union. Anterior to the promisement, PG tips and Tetley Tea were battling arduous for the top disfigurement in the British negotiate. However, forthcoming the promisement, PG tips exposed a suggestive administer in negotiate segregate, delay its negotiate segregate increasing by 1. 8 purposes, timeliness Tetley remained adjustmentately dull ; and the dissipation reiteblame rebuke extendthd from 44% to 49%. Sales of PG tips extendthd by 6%. Surveys suggested that there had been a uniform extendth in the apprehension of PG tips as an religions infamy forthcoming the propel of the promisement. No tC Project Sunshine”: the Australian consummation Enjoy the U. K. , Australia was a adjustmentately straight-advanced tea negotiate delay singly a drudgeerful of availconducive commoditiess, and most sales in sombre tea. Anterior to the propel of the promisement in 2009, the Lipton infamy held air-tense a forbearance of the €260 favoritee (A$345 favorite) negotiate. Unilever’s other infamy, Bushell’s, had an barly 13 % segregate of the negotiate. The open team chose the peculiarity “Make a Meliorebuke Exquisite delay Lipton, the universe’s foremost Rainforepose Union Assured tea”, and consequently of the adjustmentately slight portfolio, it was tooled opposing the seniority of the commoditiess. They felt that it was aligned delay the vigorous infamy confidence, which had been “Drink Better, Live Better”, an seek to extendth the apprehensions of bark and bloom blessings of the Lipton infamy. The €1. 1 favorite (A$1. 4 favorite) promisement free television, print, and despiceffectual kinsfolk. Unilconstantly as-well-behaved deeptenanceed the pattern delay in-place-of-office preferments. Packaging was diversifyd to comprise the Rainforepose Union ratify on the face of the throng, delay elevate description of the pattern and its blessings settled on the tail and borders. Customers were not assaultd a augmentment for assured tea gone surveys had plant that eminenter expenses were a perceived compartment to sustainconducive expenditure. Relative to the selfselfselfidentical ordeal continuance the year precedently the promisement, sales were up 11 % and Lipton’s negotiate segregate rose by 158 plea purposes from 24. 2 % to 25. 8%. Mean dissipation esteem per shape rose from €3. 11 to €3. 23 (A$4. 10 to A$4. 25). The singly area where the Lipton infamy did not amend was on apprehensions of bark, which decreased slightly during the promisement. Do Liberal activation in Italy The Italian tea negotiate was estimated to be barly €285 favorite in 2010. Unilconstantly had an barly 12% segregate. 31 The Italian negotiateing team deeptenanceed the certification delay a €3 favorite adulterated promisement of television, crush, online, despiceffectual kinsfolk, in-place-of-office preferments, and throngaging updates. The notice clarified was “your slight cup can fabricate a big destruction”. Forthcoming the foremost year of the promisement in 2008, Lipton saw s ales of its Yellow Letter infamy extendth by 10. 5% and negotiate segregate extendth by counterpoise 2 liberal percentage purposes. It as-well-behaved witnessed an extendth in its buyer cheap, which came for-the-most-part from pubescenter and elevate upnegotiate consumers. The Using exdiversify rebuke of €1 = A$1. 31 as of December 2, 2011 9 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Sustainconducive Tea at Unilconstantly rP os t 712-438 team remaind to deeptenance the promisement delay in place-of-office preferment in 2009 and a web and editorial joint-interepose delay Italy’s Open Geographic recipient in 2010, all of which consume €250,000. The French negotiate nonattainment In 2010, Lipton had a 37% negotiate segregate in the €430 favorite French tea Lipton’s deep race came from dispose-ofers’ individual letter infamys, which accounted for 30%-40% of sales. In France, Unilever’s portfolio was elevate diversified: Lipton sold counterpoise 40 unanalogous tea commoditiess. Whereas in the UK and Australia Unilconstantly had been conducive to butt the certification notice on the seniority of its commoditiess, in France it was judiciously singly mergeed to the Lipton Yellow Letter sombre tea commodities, representing singly encircling a fifth of sales. negotiate. 32 op yo The foremost prosper of the promisement in France relied heavily on a suggestive despiceffectual kinsfolk seek to initiate consumers and customers (i. . , the dispose-ofers) to tell them of Lipton’s certification seeks. The team centreed on winning key theory administerers and journalists delay crush releases, resources and crush conferences, and taunts to the Kericho distincthold in Kenya. The infamy’s seeks were amplely free in the crush and the team felt that they had made suggestive inroads tempting circumspection. Print ads delay the notice “your tea can fabricate a destruction” were settled in journey and cooking recipients and were principally centreed towards ordinary consumers, who tended to be womanly and counterpoise the age of 50. The team’s elaboration had suggested that French consumers were terminate enjoyly to buy delay a Rainforepose Union ratify on the box. This regret answered to muse a disenjoy of throngaging diversify rather than any stagnation of matter for environhyperphysical ends, but as a end the team chose a staggered entrance to throngage diversify, whereby certification was judiciously singly announced on the delayin of throngs, precedently substance borrowed to the tail of throngs. Singly in 2010 did the ratify rouse to answer on the face of throngs. This made it arduouser for consumers to merge advertising deeptenance to the commodities they were view on shelves. No tC The promisement ordinary TV deeptenance in 2009 and 2010 as courteous-behaved-behaved as an onverse race , where the winners won a taunt to Kenya, calculated to promise consumers and bloggers. The scant teleconfidence advertisements ran Q4 2009 and Q1 2010 and contained scenes of sustainconducive farms in Africa, as courteous-behaved-behaved as knowlbprescribe encircling the Rainforepose Union (see Exhibit 11). In sum, singly 10% of the team’s negotiateing bestow went towards deeptenanceing the Rainforepose Union notice, delay the leavings going towards elevate ordinary preferment and deeptenance of other alterations. Lipton negotiate segregate remained dull and sensibleness of the infamy did not extendth. Further, the promisement was not consummationful in mergeing Lipton to Rainforepose Alliance, and Lipton was not seen as elevate religions than other tea infamys. Do The United States knowlbprescribe The U. S. tea negotiate was an air-tense €1. 5 billion ($2 billion) negotiate in 2010. 33 Unilever’s U. S. promisement was inaugurated in the summer of 2009 delay a purpose centre on the infamy’s crude tea verse, where Lipton was second in the negotiate. The deepstream sombre tea dispose was not mergeed to the Rainforepose Union pattern. Company elaboration had pretextn that 80% of U. S. consumers scantinessed to buy eco-religions infamys, although outbarrank sacrificing on consume or bark. Singly 5% were conciliateing to pay a augmentment. The notice used was “Your Slight Cup Can Fabricate a Big Difference,” although Unilconstantly as-well-behaved had other messaging for its ready-to-drain beverage verse present consentaneously. To generebuke truth, Unilconstantly recognized Open Geographic to relinquish rebellious TV, print, and onverse reaching encircling the certification, which was published betwixt June and September of 2009. The promisement was as-well-behaved deeptenanceed by a sponsored taunt to the Kericho distincthold for three onverse bloggers and journalists, as courteous-behaved-behaved as advertising in onverse and collective resources. The throngaging was diversifyd to comprise the Rainforepose Union ratify on the face of the throng and knowlbprescribe encircling certification on the throng barrank and flap. A dispose-of joint-interepose delay Walmart and Sam’s Club granted knowlbprescribe and indisputefficient images at the purpose of dissipation, which accelerationed 10 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. du or 617. 783. 7860. 712-438 rP os t Sustainconducive Tea at Unilconstantly renew apprehensions of bloom and bark blessings (see Exhibit 13). Analyses performed by the negotiateing team involved a brawny ROI for the €740,000 ($1 favorite) dollar promisement; howconstantly ardent the magnitude of the occupation, the cannonade was adjustmentately slight. Unilconstantly did not see any suggestive commodities on counterpoiseall negotiate segregate for Lipton or the Rainforepose Union assured -crude tea. Challenges Going Advanced op yo A few years succeeding the propel of the certification machination numerous of Unilever’s senior opponents responded delay their own certification programs. Tetley, Twinings, and Yorkshire Tea all made arrangements for some or all of their tea suppliers to conciliate Rainforepose Union certification, timeliness Pickwick and Carmien Tea opted to use UTZ, a certification machination originating in The Netherlands. Yorkshire Tea announced a end of dispose-ofing 100% Rainforepose Union assured tea by 2015 . 34 Twinings had ends of 100% certification by 2015 for its Trite infamy tea. 35 Tata’s Tetley Tea vowed to continue 100% of its infamyed tea assured by 2016, a year succeeding Lipton. 6 The surge in call-for settled hurry on the Rainforepose Alliance, who expected to be avering arrepose to 20 %-25% of the universe’s tea give by 2015. 37 The Emerging Negotiate Defy tC Delay opponents executeting to third segregatey certification, sustainconducive tea at Unilconstantly aspectd a calculate of defys going advanced. On the give barrank the posse had to amend husbandry usages in some very up-hill negotiates in ordain to conface the posse’s targets. On the negotiateing border, Leijnse and his colleagues had to determine how to profits in emerging negotiates. Could consumers in countries enjoy Turkey, Russia or India be disposed to esteem assured tea? If so, how? And how could Lipton supcrush a purpose of destruction in countries where opponent infamys had followed assist? Reaching 100% Sustainconducive Sourcing No In 2011, Unilconstantly caused barly 25% of its global tea call-forment from India; most of it was consumed domiciliaryally. Some Indian tea extenders had already achieved Rainforepose Union certification, but they were openly exporters and Unilconstantly dissipationd a suggestive segregate of their commoditiesion. Converting slighter domiciliary objects to sustainconducive usages presented (at meanest) two tricky defys. First, enlargeing an formal measure that could drudgeerle inoculation and roll out seemed enjoyly to be up-hill. A great adjustment of India’s tea was extendn by slightholders who sold to open tea deedories. However, in opposture to the predicament in Kenya, there were no council sponsored tea-cooperatives, and natives were distinct to dispose-of to any deedory. Some deedories did procure origination services and inoculation for their farms, but the bark of these services sundry dramatically. Do Second, husbandry usages in India were in contest delay the Rainforepose Union counterpoise two deep ends, cadet drudge and pesticide use. The measures did not encourage assured farms to treat anyone subordinate the age of 15, but Indian law and the United Nation’s Interdiplomatic Drudge Form encourageted the treatment of 14 year olds in enlargeing countries. Morecounterpoise in India the pesticide paraquat was amplely used in tea commoditiesion. It was shrewd and conducive but it was as-well-behaved greatly toxic when ingested or exhausted outbarrank protective equipment 38 and it was answerable in numerous suicides in the enlargeing universe due to its low consume, potency, and amplespread availability. Paraquat was banned by the European Union but recognized subordinate reposericted use in the U. S. 39 Rainforepose Union measures did not encourage its use, and as paraquat use was one of the ticklish criteria; malcontent could not be made by dominion. 40 11 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Sustainconducive Tea at Unilconstantly rP os t 712-438 Unilconstantly could hypothetically oration these ends by introducing an respring measure tailored to India’s open usages. This measure could act as a stepping stone towards advenient certification. Unilconstantly would air-tense assuredly deficiency segregateners to metamorphose Indian tea extending. One liberty was to commodities delay open NGOs, as they had in Kenya, but another was to meditate commoditiesing delay energy ample patterns. Marketing in India and Other Emerging Markets op yo Getting the messaging fit in India would be another expressive defy. Tea was the oral hot beverage of India and the negotiate was estimated to be €1 billionf (RS 64. 6 billion) in magnitude, delay Unilconstantly the negotiate administerer delay a segregate environing 30%. Call-for for tea was brawny, delay the negotiate extbound an estimated 12% per annum by esteem and 3% per annum by magnitude from 2005 to 2010. The call-for for tea had really outstripped the extendth in open tea commoditiesion, ending in tea expense extendths in 2010. 41 Air-tense two-thirds of the negotiate, by magnitude, was sold as unbranded dissolute sombre tea (in integrity). Singly one-third of the negotiate was infamyed tea, which was air-tense exclusively dissolute sombre tea in throngets. Tea bags represented terminate than 2% of the negotiate, but were a extbound limb. G reen tea was another eminent-enlargement nature, purposely in elegant areas, consequently of its perceived bloom blessings. 2 Air-tense three-quarters of all tea was quiet sold through rebellious slight grocers, but supermarkets and hypermarkets had begun to sloth extendth their segregate as mound allowances began to change consumer buying demeanor. Branded coffee add obligations had as-well-behaved beseem beloved, purposely delay pubescent Indian consumers, who increasingly viewed tea as an quaint beverage. 43 tC Unilever’s Indian helpful, Hindustan Unilever, sold for-the-most-part through two senior infamys, Brooke Bond and Lipton, who had negotiate segregates of 19 and 6% respectively in the infamyed tea negotiate. Its deep opponent was Tata Global Beverages who had a negotiate segregate of 26%, for-the-most-part subordinate its Tata Tea infamy, which had air-tense 20% of the negotiate by dispose-of esteem. 44 But Unilconstantly as-well-behaved aspectd race from regional tea companies who took arrogance in tailoring their unites and provision methods according to open indulgents and who reiterateedly competed fetidly on expense. No Subordinate the Sustainconducive Influence Artifice umbrella, Hindustan Unilconstantly had begun to establish-known commoditiess planed to amend the bark of distincthold of India’s poorepose consumers, including new, greatly conducive drudgeer soaps and a dispose of instil purifiers. The posse had as-well-behaved been negotiateing Surf Excel, a obstruct laundry detergent, which call-ford up to two fewer buckets of instil for washing than competing commoditiess. 45 The posse appreciated that if the environhyperphysical end was perceptible and had an instant open application, sensibleness and sagacity of the end was openly eminent. But it was terminate distinct if Unilconstantly could announce the comparatively far blessings of sustainconducive tea husbandry. Do Michiel Leijnse wondered whether the posse’s new knowlbprescribe in Turkey could procure any terminateons. In Turkey, the tea extbound energy played a promine nt role in open cultural personality, and the Turkish team had clarified a notice that suggested assured tea offered open blessings, eminentlighting relinquishs to domiciliary objects, as courteous-behaved-behaved as to the dominion’s tea buds (see Exhibit 8). Should bigwig homogeneous be seeked in India? He as-well-behaved had to meditate how tea could be negotiateed in emerging negotiates where there was no tea extbound cheap. One such pattern was Russia, where Unilconstantly had a 16% segregate of the air-tense €3 f Using exdiversify rebuke of €1 = RS 69. 6 as of December 2, 2011 12 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. 712-438 rP os t Sustainconducive Tea at Unilconstantly billiong (RUB 115 billion) negotiate in 2010. Tea was a oral Russian drain consumed by air-tense integralone. 46 The negotiate was led by a domiciliary tea creator, and timeliness magnitude extendth had been scant, sales in the negotiate had been extbound at arrepose to 15% gone 2005, as consumers switched to elevate proud-priced varieties of tea and as the senior Russian infamys remaind to spread the dispose of their offerings. 7 Could Unilever’s sustainconducive tea platform subsubassist as the plea for commodities unanalogousiation that would instigate extendth and negotiate segregate in Russia? Or should Unilconstantly abjure any preferment of sustainability and instead centre on other ways of competing in the Russian negotiate? Concluding Thoughts op yo Delay the propel of Rainforepose Union certification in 200 7, Unilconstantly had rouseed the metamorphoseation of the tea energy and amendd the lives of hundreds of thousands of natives. It had as-well-behaved demonstrated that in assured negotiates certification could extendth negotiate segregate. However, delay most senior tea creators tooling fetid certification targets of their o wn, it answered that sustainability authority, at meanest in Western negotiates, beseem increasingly elevate a consume of doing occupation and terminate a cause of competitive service. Unilconstantly deficiencyed to determine not singly how to secure that 100% of its give obligation could be sustainably caused, but as-well-behaved how that notice could be infectious in a definite assembly of emerging negotiates. Michiel Leijnse as-well-behaved deficiencyed to determine how far he could butt sustainability in the infamy. If Unilconstantly were to attain its targets subordinate the Sustainconducive Influence Plan, all unroving raw esthetics would at-last deficiency to be sustainably caused, including the paper and consultation used for the tea throngaging and tea bags (see Exhibit 10). Could this be infectious to consumers in a advantageous way? Do No tC Looking opposing Unilever, Leijnse wondered if his knowledges in tea had anyfiction to add to negotiateing directors grappling delay the virtual blessings of 100% sustainconducive sourcing. From a negotiateing perspective, tea and the Lipton infamy had been an explicit exquisite to st art confabulationing encircling sustainability ardent the tense merge betwixt the raw esthetic and the end commodities. The selfselfselfidentical could not be said for numerous of the other raw esthetics that Unilconstantly dissipationd. For pattern , Unilconstantly was the universe’s greatst buyer of sustainconducive bays oil and it had executeted to ensuring that all its dissipations came from sustainconducive causes by 2015. Consumers did not besides buy sustainconducive bays oil, but rather commoditiess such as soap and wholesome fats that used it as one incompact numerous ingredients. Unilconstantly was unassured whether to relinquish sensibleness of its seeks incompact consumers. Moreover, Leijnse had knowledged extendthd circumspection and stricture from activists gone propeling the Rainforepose Union joint-interest; would the Sustainconducive Influence Artifice hypothetically fabricate Unilconstantly a bigger target for sifting? Were there any terminateons that could be imbibeed from Lipton? g Using exdiversify rebuke of €1 = RUB 41. 4 as of December 2, 2011 13 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Exhibit 1 Sustainconducive Tea at Unilconstantly rP os t 712-438 Unilconstantly Allowance Statements, 2006-2010 (€ Millions) 2010 44,256 37,637 6,619 15. 0% -992. 86 6,338 14. 3% 206. 97 -413. 94 6,131 1,534 4,597 2008 40,519 21,340 19,179 47. 3% 12,012. 79 1,002. 90 7,166 17. 7% 361. 96 -399. 96 7,128 1,844 5,284 2007 40,116 20,522 19,594 48. 8% 13,790. 41 941. 28 5,235 13. 1% 646. 66 -5,175 1,126 4,049 2006 39,647 20,095 19,551 49. 3% 13,900. 57 982. 07 5,408 13. 6% 181. 87 -4,832 1,146 3,686 3,370 -3,370 3,370 8. 5% 5,284 0 5,284 5,026 12. 4% 3,801 80 3,881 3,881 9. 7% 3,415 1,330 4,745 4,745 12. 0% 1. 46 1. 46 1. 46 0. 86 1. 17 1. 17 1. 17 0. 69 1. 3 1. 73 1. 73 0. 69 5. 12 5. 24 5. 24 0. 72 4. 6 6. 4 6. 4 0. 45 op yo 2009 39,821 33,933 5,888 14. 8% -1,031. 94 5,020 12. 6% 324. 98 -428. 98 4,916 1,257 3,659 4,243 -4,243 4,243 9. 6% Fruits Consume of Chattels Sold Gross Profit Gross Profit Margin SG&A Expense Depreciation & Amortization Dissolute Allowance Dissolute Margin Non-dissolute Allowance Non-dissolute Expenses Allowance Precedently Taxes Allowance Taxes Net Allowance Succeeding Taxes Continuing Operations Discontinued Operations Sum Operations Sum Net Allowance Net Profit Margin tC Diluted EPS from Continuing Operations Diluted EPS from Sum Operations Diluted EPS from Sum Net Income Dividends Per Segregate Source: Unilconstantly allowance statements, via Hoover’s Inc. , www. hoovers. com, homogeneousityed November 2011. Exhibit 2 Fruits and Dissolute Allowance by Divisiona, 2010 (€ Millions) Ice Cream & Beverages Specific Arrangement Settlement Arrangement Sum 14,164 11,318 2,846 20. 1% 8,605 7,881 724 8. 4% 13,767 11,471 2,296 16. 7% 7,726 7,253 473 6. 1% 44,262 37,923 6,339 14. 3% No Savory, Dressing, & Spreads Fruits Dissolute Expenses Dissolute Allowance Dissolute Margin Source: Posse muniments. a Some of Unilever’s other infamys comprise Hellman’s, Knorr, Becel, Heartinfamy Icecream, Breyers, Axe, Dove, Vaseline, Omo, Do and Surf. 14 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. L'Oauthentic Reckitt P Danone Nestle Colgate Unilconstantly Fruits Enlargement by Posse (%) CAGR, 1980-2009 9. 4% 8. 5% 6. 9% 6. 0% 5. 2% 3. 8% 3. 5% Source: Posse muniments. Exhibit 4 Nestle Reckitt L'Oauthentic Danone Colgate P&G Unilconstantly CAGR, 1980-2009 18. 6% 16. 9% 16. 6% 14. 0% 12. 6% 12. 4% 10. 2% 2000’s 3. 6% 10. 6% 7. 8% 0. 5% 3. 1% 6. 1% -2. 0% tC 1980-1989 37. 5% 24. 2% 23. 4% 31. 1% 16. 0% 17. 1% 1. 5% 1990-1999 21. 7% 7. 6% 34. 7% 10. 3% 23. 0% 17. 7% 10. 6% 2000-2009 3. 4% 16. 1% -3. 1% 2. 4% 0. 9% 6. 6% -3. 4% EBIT Margins by Posse (%) 1980 11. 0% 10. 5% 9. 3% 8. 4% 7. 9% 6. 8% 5. 7% No L'Oauthentic P Reckitt Nestle Colgate Danone Unilconstantly 1990’s 9. 8% 5. 9% 4. 8% 5. 7% 5. 4% 5. 4% 2. 5% Enterprise Esteem Enlargement by Posse (%) Source: Posse muniments. Exhibit 5 1980’s 13. 7% 8. 9% 8. 3% 11. 5% 7. 8% -0. 2% 8. 1% op yo Exhibit 3 712-438 rP os t Sustainconducive Tea at Unilconstantly 2009 14. 2% 20. 5% 25. 2% 14. 6% 24. 0% 16. 4% 14. 8% Margin extendth (bps) 326 999 1591 621 1610 963 912 Do Source: Posse muniments. 15 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Global Mean Tea Pricesa, 1960-2010 (US cents per kilogram) op yo Exhibit 6 Sustainconducive Tea at Unilconstantly rP os t 712-438 Universe axiomsbank, tC Source: Adapted from Universe Bank axioms, Global Economic Monitor (GEM) Commodities, http://databank. universebank. org/ddp/home. do? Step=1=4, homogeneousityed November 2011. Do No a Cheap year is 2000. Prices are means of Colombo, Kokata, and Mombasa auctions. 16 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Exhibit 7a Ten Nucleus Principles of Sustainconducive Tillage Netcommodities Collective and Environhyperphysical Oration System Ecosystem Conservation Wildfreehold Refuge Instil Conservation Fair Treatment and Amiconducive Inaugurated Conditions for Workers Occupational Bloom and Safety Community Kinsfolk Integrated Bud Oration Stain Oration and Conservation Integrated Desolate Oration op yo 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 712-438 rP os t Sustainconducive Tea at Unilever Source: Sustainconducive Tillage Network, “Our Standards : SAN Principles,” Sustainconducive Tillage Netcommodities website, http://sanstandards. org/sitio/subsections/display/7, homogeneousityed December 2011. Exhibit 7b Posse muniments. Do No Source: Agrochemicals and fuels Soils Instil Biodestruction Energy Desolate Collective and cosmical excellent Animal thrift Esteem obligation & open arrangement Inoculation tC 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Ten Indicators of Unilconstantly Sustainconducive Agric ulture Code 17 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 83. 7860. Exhibit 8 Sustainconducive Tea at Unilconstantly Rainforepose Union Messaging in Turkey rP os t 712-438 tC op yo “As Lipton, Turkey's free tea infamy and legitimate tea object, we scantiness to secure that our tea conciliate be passed on to our fruit and advenient generations. To this end, we are commencement the foremost steps in our ‘Sustainconducive Tea Husbandry Project’ by combining our freeise delay the ardor of the tea extenders in Sombre Sea Region. Our end is to augment vigorous unroving usages and to openize the use of those that consubassist the ecological counterpoise by exaltation sensibleness incompact elevate than 15,000 tea extenders in the egion encircling the tea artificeting and harvesting. We are executeted to end this end in a way that conciliate enconducive to relinquish Rainforepose Union Certified™ foothold for our natives. Reportion that you deeptenance our natives delay integral cup of Lipton tea you drain. ” Do No Source: Posse muniments. 18 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Educational Poster for Smallholders in East Africa Do No tC op yo Exhibit 9 712-438 rP os t Sustainconducive Tea at Unilconstantly Source: Posse muniments (via Rainforepose Alliance). 9 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Sustainconducive Tea at Unilconstantly Unilconstantly Unroving Raw Materials by Volume, 2010 Do No tC Source: Posse muniments. op yo Exhibit 10 rP os t 712-438 20 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Exhibit 11 712-438 Examples of Rainforepose Union Advertising tC op yo PG tips (U. K. ): rP os t Sustainconducive Tea at Unilconstantly Do No Lipton (France): Source: Posse muniments. 21 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. -22- tC No Source: Posse muniments. Exhibit 12 Do Unilconstantly Sustainconducive Influence Artifice Targets op yo rP os t 712-438 This muniment is verified for use singly by LINDA KELLY-HAYES until June 2011. Copying or posting is an nonobservance of copyright. [email protected] harvard. edu or 617. 783. 7860. Examples of U. S. In-Store Promotions Exhibit 14 Global Tea Production, 2009 (Tons)