Unilever: Study of Sustainable Practices

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Unilever is not about putting purpose ahead of profits, it is purpose that drives profits. Turkey is one of Unilever's main centers of tea agriculture, with more than 15,000 farmers and three factories based in the country. Lipton has launched a Sustainable Tea Agriculture project in

Unilever:

As we all know Unilever makes products that people love. Their products range from Nutritious foods household care essentials, indulgent ice creams, refreshing teas, luxurious shampoos, affordable, disease-combating soaps... and many more. In fact, the company was established 90 years ago and till date it stays as top leading multinational fast-moving consumer goods (FMCG). One of the finest brands in Unilever is Lipton Tea. Who doesn’t love to have a sip of tea daily while reading through newspaper or peeping just out of the window looking at the beautiful nature? While Unilever has a range of products, its brand Lipton likewise has number of collections ranging from green tea to herbal teas. Tea being an important part of everyone’s life and life without tea is unimaginable for Turkish society, Unilever Turkey thought of implementing sustainable tea practices in Turkey. By respecting and valuing the human rights of tea workers and smallholder farmers, and working to improve their health and financial security while protecting and nurturing the land they work on, Unilever aims to set the example for the industry. 

Executive Summary:

Unilever Turkey is in the fight to make sure that all of its Lipton Tea drinkers in turkey should be able to buy Lipton tea bearing from the Rainforest Alliance seal. This would certify that tea had been produced at factories that respected good conservation practices and paid fair wages to the people who harvested the tea leaves. These initiatives were part of the “Sustainable Tea Agriculture” project that had been launched by Unilever Turkey. This impact will be potentially huge, where it would change the entire lifestyle of farmers who adapt sustainable methods. Everyone in this sector should feel safe, respected, included and valued – and will not tolerate gender-based violence against the women and girls who make up around half the tea pluckers and smallholder farmers in our supply chain. By discussing the number of causes, consequences and causality we can conduct analysis based the path and pitching a recommendation for the problem considering biases.

 

PROBLEM STATEMENT:

Problem 1: Rainforest Alliance Certification

 

Unilever Turkey had an insight of making all the tea estates certified by Rainforest Alliance. This thought process was a very good initiative, but at they very beginning it needed a lot of effort to implement this project. To get certified it means that the traditional agricultural practices followed by the numerous smallholders have to be changed to sustainable practices. When the new practice system was shared to the smallholder tea farms, they were reluctant about the new practice. This was because these smallholders thought the new sustainable practice would cost a lot to them but actually it wasn’t. For the Rainforest Alliance Certification there were certain norms which have to be followed. The reduction of fertilizers, pesticides and reducing waste water and runoff should be followed which will be an arduous task. To implement all these methods proper promotion was required which played as a key element of this effort, as both the farmer and tea drinkers need to change their current outlook. Despite in various advancements in the present world it is still contending with distress, complicated, and deeply entrenched inequities that make the limitations of sustainability certification painfully clear. Self-monitoring was far necessary for this implementation. Once the certification has been achieved there won’t be any social-problems including child labour and sexual abuse to poor or non-existent sanitation facilities.

Problem 2: Unilever Sustainable Living Plan

 

The Unilever Sustainable Living Plan is directly linked to earnings and returns – which drives growth, reduces costs, mitigates risks and attracts talent. The Unilever plan identifies three main missions: ‘improving health and well-being’, ‘reducing environmental impact’ and ‘enhancing livelihoods’, whereas, each mission comes with a set of concrete goals. Unilever focuses its sustainability efforts on four key areas: greenhouse gas emissions, water conservation, waste reduction and sustainable sourcing. All of this would not be successful with the help of a single community, it can be done only by the involvement of the stakeholders. This could generate a good profit for the company. By breaking the rules and connecting to people with the new strategies who are facing problem to surviving their life, priority was made for people who go to bed hungry every night. But this strategy was not successful in all sectors. The growth of the financial performance was a pitfall.

Problem 3: Corporate Social Responsibility

During the advancements for Rainforest Alliance Certification there were number of problems impacting environmental, social and economic changes. Tea production was often accused of being responsible for several ecological and social waves. If the plantation methods were not properly preserved, tea production could lead to soil erosion and excessive pollution. On the other hand, tea processing increases the demand for firewood to fuel tea dryers. Production of tea was very labour intensive. Furthermore, exposure to excessive use of pesticides endangered health of the tea plantation workers. There are also risks to vulnerable communities who may be impacted by climate change especially for the regions where black tea is yielded.

 

Identify the best guess for the issues:

More focus on research and invention:

USLP’s (Unilever Sustainable Living Plan) implementation should be continuously adapted, adjusted and a lot of learning has to be done. So once again the company has to explore further innovations with the necessary adjustments. In order to produce more sustainable products, more research and innovation has to be done in succeeding further.

1. Implementing new methods in in-house farms.

Prior to implementing the sustainable methods to the local farmers, it would be a good initiative if the company first tests the sustainable methods in their in-house farms. After pertaining enough success then the company can more forward and take these methods to the farmers of private land. For this to be successful the company should fully implement compliant standards of the sustainable agriculture practice in its own farms to check how good and suitable the new methods would be. Being lucrative and meeting the needs of the Rainforest Alliance Certification prospective we can earn the certification from them. This is going to impact the company in a strong and wealthy means. After seeing a positive growth in the company, we can take these sustainable methods of practice to the local farmers and teach them how these methods really work in a positive way.

2. Training small farmers with the methods implemented in in-house farms.

After a successful implementation of the sustainable methods in in-house farms we can then take these methods to small farmers. Farmers will be reluctant to the new methodology thinking that it would cost so much for them. Farmers must commit to continuous improvements in worker welfare, farm management and environmental protection. To apply these practices in the small farmers land, we need to educate and train them on how beneficial and constructive these methods are going to be for them. Making them know how to improve their productivity and reduce costs by reducing pesticides use, eliminating waste and introducing better farming techniques is going to be valuable for the small farmers. All these can be done only by educating the farmers. helping smallholder farmers adopt responsible practice that will both protect the land they depend on and sustain their incomes over the long-term is the high priority of Rainforest Alliance. By being certified there will be a lot of benefits for the farmers by reducing cots and increase food-security. By applying techniques related to weed management systems can cut down the cost drastically and improve the soil texture which would help in keeping the tea bushes healthy.

3. Economic, social and environmental benefits.

Tea production if not maintained well there are a number of challenges which will be faced by the farmers. if not managed well, tea production could lead to soil erosion and excessive pollution from fertilizers and pesticides, which could lower the quality of soil for the future generation. It could also pollute the ground water. Furthermore, the tea prices had seen a downward spiral. All this made the farmers lose hope and were denial because the only source of money they had was through cultivation. So, for this not to affect the farmers, training was given on various multiple new methods of cultivation and how to reduce waste management, record keeping, wildlife protection, fertilizer usage, pruning and fair treatment of the workforce. Farmers main problem was soil erosion because of the use of improper methods of fertilizer use.

 

  • Laboratories can be setup in their fields and their soil can be tested. By testing the soil, they should get to know how much quantity of fertilizers and pesticides can be used. This would help in maintaining the balance of the soil.
  • Technology can be established in their fields by providing tablets so there won’t be necessary for the farmers to enter the data manually helping by saving the time. This would also help in analysis of the soil.
  • By donating health scanning vehicles, it would be great thing for the farmers to constantly have a look on their health. this can be implemented in the ratio of 1:(5-7) (1 vehicle to 5-7 villages) based on the number of farmers in each village.
  • Waste collection and recycle methods can be taught to the farmers. This would help in protecting the natural resources and restore them.

4. Consumer awareness and marketing (Protecting for future).

In order to make people aware about company’s sustainable programs and the importance of it, we can think about more innovative strategies to change people’s behaviour. By organising workshops based on how beneficial sustainable practices are and promoting importance of herbal tea and to help the small-scale farmers people will at least start looking at it as there will be some awareness among them and share their thoughts with others. But all the possible initiatives require a long period of time and these can be identified as time-consuming processes. Simultaneously, to promote consumer awareness and generate credibility about sustainability efforts we need to undertake a series of promotional campaigns around the globe with a mere success. Only if the work we do gets promoted there are high chances that our company’s name will get registered in peoples mind. As tea being closely associated with the Turkish national culture, its importance has to promoted and the tea which is being cultivated by sustainable methods. The benefits and the importance of the sustainable methods has to be promoted and marketed only then the buyers can support the domestic producers as well to the country’s crops. The more marketing done the greater number of people will come to know about the company’s promoting of sustainability efforts to the consumers. By doing this we can double the consumer awareness over the upcoming years if everything gets placed well. Moreover, tea’s commercial life is 100 years or so and the tea in this region is almost 75 years old we need to protect our tea for future generations and that is why we set off a journey for the future and sustainability of tea in turkey highlighting the many benefits and positive impact on people and nature. This step could be a time-consuming process but if it sets to kick off then there would be a tremendous increase in turnover by implementing the strategies.

5. Changing people’s behaviour.

All the mentioned goals cannot be changed or accomplished without the help of the consumers. Only if the consumers change, companies can look into profit. The measure of the carbon content and the green house emissions came into picture only after getting into the hands of consumers, mostly through the energy intensive process of heating water. The amount of water used has to be decreased and a set up has to made where the usage if water is being measured. By measuring it in day to day life people will also get to know the amount of water they have been spending daily. Automatically people will start using the water in a minimal rate comparing it to the previous days usage. By educating, mentoring and networking marketing people can spread the knowledge in community basis which will help in spreading more awareness among the people. this would probably change the behaviour of the people.

6. Maintain triple bottom line (Planet, People Profit)

The 3Ps provide a great framework for talking about sustainability. Because they demonstrate the importance of taking a holistic approach, balancing social, environmental and economic considerations.

People

The rights and well-being of people was key to the Rainforest Alliance Sustainable Agriculture Standard on which certification is based. Human rights must be respected on Rainforest Alliance Certified™ farms, to make them better and safer places on which to live and work. Farmers are required to provide decent housing for workers, and access to clean drinking water, sanitation and healthcare. On a certified farm, workers must wear the right protective clothing when working with chemicals. Child labour should be prevented and promoting gender equality was important and discrimination has to be stopped. Certified farms work towards better livelihoods for farmers and workers.

Planet

Farmers in the Rainforest Alliance certification program use land, water and energy carefully, protecting natural resources and the environment in which they live and work. They help in protecting the planet by using fewer artificial fertilizers and pesticides, preventing pollution and carefully managing waste. Training farmers to protect forested and protected areas, which in turn helps support biodiversity of plants and animals. Training to use climate-friendly farming techniques and to adapt to the effects of a changing climate was given.

Profit

The Rainforest Alliance farming methods result in better quality crops and higher yields–with lower costs–helping create long-term increased productivity and improved incomes. Farmers can also negotiate a better price for their products. Better prices with lower costs mean higher profits; and higher profits contribute to a better quality of life and more opportunity to invest for the long term. That’s good for farmers, their families and their communities.

 

Recommendation

 

  • By achieving Rainforest Alliance certification, there are lot of people who are going to get benefited with the lump sum of profit. But before that, they need to invest money to get certification from the Rainforest Alliance. Investing money on something which they don’t have complete knowledge is a riskier thing according to the small farmers. So, to mitigate this risk, Unilever can sponsor them with a minimal investment amount. This could help the small farmers get some trust and hope on what they are doing. If not for farmers who don’t believe these sustainable methods, Unilever can make a strategy stating that “if the small farmers don’t seek enough profit, then we are ready to return the total investment to them”. By making such conditions the small-scale farmers will be boosted up to implement these methods. May be not everyone will take a chance to try the modern sustainable practice but looking at the profit earned by other farmers, most of them will be inspired and will at least get a thought to implement the new practice as well.

 

  • Unilever has a market share of 18% of the total tea market in Turkey. The state-owned Cay Isletmeleri Genel Müdürlügü contributes almost 50% of the Turkish market. The third highest market share went to another local Turkish company named, Dogus Cay, with a 13% share. By comparing Unilever and Dogus we see that there no big difference in their share market. In this situation Unilever can do more of research and make sure that they attain the highest percentage of contribution of tea. Since most of the Turkish people love to drink Black Tea, Unilever can focus more on developing different types of Black Tea by adding some medicinal and herbal values in it, which in turn can boost up the economy of the company in Turkey. Also, by marketing and promoting about the sustainable practices and rich benefits from the Herbal Tea would rise the company in an upward trend. Innovation is a must necessary thing for any product promotion or marketing. Looking at a promotion the product should stand still in the consumers mind such a way that when they go to buy a pack of tea, Unilever should strike their mind.

 

  • As we spoke earlier about how training the farmers on different perspectives is important, the methods and people who teach them is also equally important. In this case Unilever can actually select three to four people from each village, likewise from other villages also. Doing this they can rise them knowledge and train them based on the new methodologies and how it’s going to benefit the fellow farmers. Not only training theoretically but also helping them implement these practices in their fields will also beneficial. By doing this Unilever can actually save a lost of cost cut because they are training a smaller number of people and net marketing comes into play.

 

  • Number of help desks can be increased in places where there is a lack of helping hand for farmers. For this to boom Unilever can set up some software package training for the farmers and invent soil testing devices. Condition of the soil plays a major role in Tea farming. Fertility of soil is as important as taking care of a baby child. Supporting farmers with such technological developments will also allow them to work on the fields efficiently without worrying about the near future.

 

  • Live monitoring of the fields can be implemented by Unilever. Unilever will have a chance to look into the fields of the farmers who are following the sustainable methods. This will help in maintaining the consistency of the work and to prevent soil erosion. Whenever if a farmer is working on the field and following wrong practice or else if there is any issue related to the fields Unilever can directly come in contact with the small farmers. This would really be a good initiative for the company as well for the farmers.

Conclusion:

Unilever being one of the finest FMCG (fast moving consumer goods) around the globe have a billion-dollar revenue in their hands. The analysis has been done to check the effect of different factors on media selection by the different consumers. In-spite being one of the most influential companies in the world is committed to provide products that will help people in their daily life and also support the global economic growth. Likewise, their idea of becoming entirely sustainable is a very good idea in todays world scenario as most of the environmental and social changes are because of such companies. Becoming sustainable means helping our plant, people and looking for profit through sustainable methods. Following sustainable practice means being a role model for other companies to follow sustainable methods and implementing these practices. Not only following sustainable methods but also Unilever helped in creating job opportunities for people around the world, as well helping and teaching how viable methods will help them achieve success. Unilever has been a part of campaigns such as child labour, gender discrimination, women empowerment etc. These are few things Unilever has been consistently doing and being the reason for them to always stay on top of the FMCG companies list.  

 

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