This document discusses tea production in Kenya through two main procurement models - plantations and the Kenya Tea Development Agency (KTDA). The KTDA model involves over 560,000 smallholder farmers who supply green tea leaves to buying centers, which are then processed at factories and sold primarily through Mombasa auctions. Key factors in the success of the KTDA model include high returns provided to farmers, timely payments, transparency, and services around inputs and training. Unilever procures tea through both the auction and direct sales, and supports farmer training and certification through KTDA to improve yields, quality, and sustainability of tea production in Kenya.

1. TEA IN
KENYA

2. TABLE OF CONTENT
1. Unilever’s procurement models: Plantations and KTDA
2. Strategy
3. Two faced Business models
4. Procurement practices
5. Key success factors

3. 1. UNILEVER’S
PROCUREMENT MODELS

4. A. PLANTATIONS
PROCESSING
MARKET
PRODUCTION OF GREEN
LEAFS
700 pluckers on permanent
contracts + seasonal labour
Mabroukie Tea factory
( 90% of green leaf received is RA
certified)
MOMBASA AUCTION
(30%)
UNILEVER GLOBAL
PROCUREMENT (70%)
Un il ever ’s Mabr o ukie T ea E s t at e: val ue c hain
CTC: Green leaf/Black Tea ratio
4:1
256 Smallholder farmers
(90% are RA certified)
Plantation ( 48% of total
production)
Out-growers (52% of
total production)
Provided services:
Extension, fertilizer and
transport on check-off

5. B. KTDA
GROWERS
PROCESSING
MARKET
MANUFACTURER/
RETAILER
CONSUMER
BUYING CENTERS
Pluckers: 15-20 Kg tea
plucked in 0.25-0.5
acres per day( 3 hours)
3,700 buying centers: More
than 200 M kg of green
leaves collected and
delivered to the 66
processing factories
66 factories: 95 percent is transformed into primary grades (Broken
pekoe1 (BP1), Pekoe Fanning1 (PF1), Pekoe Dust (PD), Dust1 (D1)
and the rest is classified as secondary grades and fanning.
12 Tea brokers/ buyers at MOMBASA
AUCTIONS(75% of bulk)
KENYA TEA
PACKERS (7%)
DIRECT SALES(15%)
Unilever: Blending and
packing
Lipton
Big consumers( restaurants etc.) Retail outlets
SALES AT FACTORY
DOOR (3%)
Peak plucking seasons
560,000 SMALLHOLDER
GROWERS
October, November,
December, January
Average number of bushes per
acre:3,500
Average acreage:0.5-0.6 acres
Average production:1000 Kg/
year/acre
f l o w o f pr o duc t s

6. 2. STRATEGY OF KTDA
• Increase and improve tea and the returns to their
shareholders (SHF)
• Commitment to sustainability (socio, economical and
environmental)

7. 3. BUSINESS MODEL – KTDA/SHF
• KTDA managed factories collect the green leaves from
SHF in their catchment and produce different grades of tea
• Daily collection of green leaves at collection centres
• Transparency (of quality control and quantity)
• Payment is two fold (bonus+ monthly)
• Training and certification is supplied while using farmer
field school

8. 3. BUSINESS MODEL –
KTDA/UNILEVER
• Green tea KTDA is of exceptional quality and of importance for
the blend of Lipton.
• Sales thru auction and direct
• Price determined at auction - currently strong reduction of
direct sales
• Joint investment on yield and quality increase, certification
and overall sustainability that goes beyond tea.

9. 4. PROCUREMENT
PRACTICES
KTDA – SHF
• collection at collection centres 6 days a week.
• All batches of green leaf are excepted is quality is ok
Unilever –KTDA two systems:
• Auction
• Direct sales

10. 5. KEY SUCCESS
FACTORS
KTDA:
• High returns of final price to SHF – Average 70 - 75%
• Timely payment
• Transparency
• Other services (inputs and training)
UNILEVER:
• Support to farmer field schools and certification has
improved the relationship