Case study: Lipton

The story
When Michiel Leijnse became Unilever’s global brand development director in 2005, his brief included refreshing the high-profile Lipton tea brand.

Mr Leijnse – who had worked on Unilever’s Ben & Jerry’s, the pioneering sustainable ice-cream brand – and his team soon realised there was an opportunity to win market share by making the brand 100 per cent guaranteed environmentally and socially sustainable. They also realised the move could include other well known Unilever brands, such as PG Tips and Lyons.

The challenge
To be credible with consumers, the move meant certifying the plantations where Lipton tea came from as sustainable, converting the whole supply chain to sustainable methods, and telling consumers about the change – more or less all at the same time.

Lipton’s is a mainstream brand with such a large global market share that making it totally sustainable would potentially affect world tea markets.

The strategy
First, Unilever sought third-party certification of plantations. Potential partners were assessed according to factors such as recognition by consumers, capacity, flexibility to certify large and small suppliers, ability to work with local organisations to train employees, and ability to recruit and train teams of regional auditors.

Unilever picked the Rainforest Alliance, a US-based international non-governmental organisation set up to conserve biodiversity and ensure sustainable livelihoods. Rainforest Alliance certification requires meeting standards in worker welfare, farm management and environmental protection.

Then Unilever publicly announced two targets: all Lipton Yellow Label and PG Tips tea bags sold in western Europe would be certified sustainable by 2010; all Lipton tea sold globally would be certified by 2015.

What happened
Unilever and the Rainforest Alliance started with big tea estates in Kenya, where sustainability initiatives had long been under way. Some big Kenyan suppliers had good standards and could be certified easily.

But when the initiative moved on to work with smallholders in other countries, the team discovered that conditions for rollout differed in complexity from country to country. Supply bases were sometimes more fragmented, and legal frameworks varied. It became critical to adapt procedures to the varying contexts and to develop a network of additional partnerships with experienced local organisations.

In Argentina, for example, Unilever and the Alliance teamed up with local organisation Imaflora, a non-profit that promotes conservation, to help deal with about 6,500 loosely organised farmers who had little experience in applying best practice in agriculture.

Once the certified tea started to appear on the shelves, first in Europe and then the US, consumer campaigns got under way. As Mr Leijnse noted: “Where a link between the brand and certified sustainable tea could be made, sales and market share went up.” Unilever also discovered that the sustainably produced tea appealed to new consumers – in Italy, for example, it attracted younger customers.

The effects were felt inside and outside Unilever. Internally, the expansion to other markets accelerated as marketing teams in Japan, Australia and the US introduced certified tea ahead of schedule.

Externally, meanwhile, a surge in demand for certified tea was taking place, thanks to the involvement of the Ethical Tea Partnership. The ETP had been set up by the industry in 1997 to improve supply chain issues. The ETP and the Rainforest Alliance decided to collaborate in 2009, to build capacity within the industry for a move to certified sustainable production. Other tea producers began to negotiate certification targets too.

The lessons
Unilever learnt that, while challenging, identifying the right partners and adapting to local contexts are both vital.

Thanks to its proactive stance on achieving sustainability in tea, Unilever showed that implementing a mainstream initiative is possible, while also reaping financial and reputational benefits.
- Financial Times, 14 Nov 2011