{"id":25417,"date":"2017-11-15T19:53:13","date_gmt":"2017-11-16T00:53:13","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/unilever-tea-saving-superhero\/"},"modified":"2017-11-15T19:57:18","modified_gmt":"2017-11-16T00:57:18","slug":"unilever-tea-saving-superhero","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/unilever-tea-saving-superhero\/","title":{"rendered":"Unilever \u2013 Tea Saving Superhero?"},"content":{"rendered":"

Ann Fudge (HBS \u201977) gazed out of her office window while sipping on a cup of tea.\u00a0 She began to consider the work that Unilever had been doing to mitigate the negative impact of climate change on tea and how she could leverage her position on the Board of Directors to hasten the progress.\u00a0 There were many competing sustainability initiatives for Unilever, with tea being one of the top priorities in order to sustain the Lipton, Brooke Bond, and PG tips brands.<\/p>\n

Tea Market Projections<\/u><\/strong><\/p>\n

At a consumption rate of 4.84 million tons in 2013, tea is the most popular manufactured beverage in the world [1].\u00a0 There are several different varieties of tea, such as black tea, of which, Unilever purchases 10% of the world\u2019s production [2].\u00a0 Based on current market projections through 2023 for black tea specifically, the growth of consumption will slightly outstrip production (3% and 2.9%, respectively) and land at a point of equilibrium by 2023 (4.14 and 4.17 million tons, respectively) [3].<\/p>\n

Given they are such a large player in the market and there will just barely be enough black tea production to cover the demand, it is important that Unilever be aware of the impact climate change will have on tea crops.<\/p>\n

Impact of Climate Change<\/u><\/strong><\/p>\n

Since tea has very specific growing conditions that are confined to a limited region, it is highly susceptible to climate change.\u00a0 Preliminary research indicates the regions suitable for tea growth could decline by up to 40-55% in upcoming years due to changing temperatures and weather patterns [4].\u00a0 Additionally, tea crops face both yield and quality challenges.\u00a0 As with many crops, tea crops are not currently suited for drought conditions which could lead to reduced yield.\u00a0 However, on the opposite end of the spectrum, increased rains lead to increased crop yield \u2013 crops grown during the monsoon season produce 50% more leaves [5].\u00a0 However, this also led to a change in flavor and decrease in beneficial antioxidants by 50%, leading to reduced consumer liking [6].\u00a0 There is also the potential for crops to become diseased with root rot when conditions are too wet.<\/p>\n

In addition to the consideration of crop yield and quality, there is the potential for a decrease in the amount of available labor due to the increasing temperatures creating uncomfortable working conditions.<\/p>\n

Unliever \u2013 Premptive Strike<\/u><\/strong><\/p>\n

Unilever has undertaken several initiatives in order to ensure the long-term future of tea production despite the changing weather conditions.\u00a0 They have tackled this from the standpoint of increasing the viability of the crops and increasing the yield of the land through improved farming techniques.<\/p>\n

In order to increase the viability of tea crops, Unilever has begun working to understand the resistance of different crop varieties to drought, disease, and pests [7].\u00a0 Through a partnership with Nature Source Genetics, they are endeavoring to cultivate more sustainable varieties of tea crops [8].\u00a0 If Unilever is able to better strengthen tea crops to endure the harsher conditions that will occur as a result of climate change, they may be able to reduce the effect of the reduction in regions available for tea cultivation.\u00a0 Needless to say, these types of initiatives take many years and will produce benefits in the long-term.<\/p>\n

In addition to tackling the long-term challenge through Research and Development, Unilever is also working with farmers to ensure they are using the best and latest techniques to obtain higher yields on the land they are cultivating in the short-term.\u00a0 In partnership with local organizations (Kenya Tea Development Agency, and The Sustainable Trade Initiative), Unilever teaches best practices to farmers through schools that are located in the farmer\u2019s home countries (Farmer Field Schools) [9].<\/p>\n

Is This Enough?<\/u><\/strong><\/p>\n

On the surface, it may appear as if Unilever does not have a strong sense of urgency regarding long-term tea yields.\u00a0 However, the reports regarding negative impact on tea crop yields are relatively new and I believe the steps that have been taken thus far by Unilever show a great deal of long-term consideration.<\/p>\n

Two important questions remain:<\/p>\n