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"Green" Tea, Greener Profits?

Jeremy MacNealy
June 14, 2007

Unilever (NYSE: UN  ) (NYSE: UL  ) , the world's largest tea company, is hopeful that efforts to promote tea sustainability among its suppliers will usher in a profit boost in the coming years.

According to Sustainable Development Report, Unilever began outlining "sustainable agriculture guidelines for tea cultivation" in 1992. Since then, the company has gone on a mission to communicate these guidelines to its suppliers. So far, more than two-thirds of its global suppliers either meet the standards outlined in the guidelines or are full participants in its tea sustainability program.

This is an important subject for Unilever, since tea makes up a good portion of its business. As a percentage of world volume, Unilever's share of the world's black tea procurement in 2006 was 12%.

The company is now partnering with government and non-government agencies alike to reach out to the remaining one-third of suppliers that are often located in remote areas of the world. For instance, Unilever has partnered with the U.K.'s Department of International Development and the Kenya Tea Development Agency to figure out ways to better communicate with small tea farmers in Kenya, whose numbers exceed 450,000.

These efforts are about to pay off. In a