We cherish simplicity

Thursday 29 September 2011, by Imke De Vries, Jeremy Grawert, Pascal Heck, Vanya Mitreva

124 inspired

a) The main facts about the activities of the company.

TEEKAMPAGNE was founded in 1985, Potsdam, Germany by Prof. G?nter Faltin. It is a tea mail order business. The company is the world?s largest importer of Darjeeling leaf tea. Nowadays they sell 400 tons a year. The TEEKAMPAGNE sells only a single type of tea, but the best ? the champagne of the teas: Darjeeling. They sell the tea in large packages to reduce the costs (material & storage). One of most important things is that they purchase directly in India and cutting the middlemen. Through this simple and radical approach they can sell Darjeeling tea at an affordable price.

TEEKAMPAGNE is able to achieve a high profitability, at the same time taking great interest in an ethical business behavior. TEEKAMPAGNE follows highest ethical standards all throughout the supply chain. Since its product is fair trade, the company is paying the producers over 50% of the selling price. The TEEKAMPAGNE supports its suppliers form developing countries by using economic principles. Given the higher quality of products, TEEKAMPAGNE meets a higher demand and therefore is able to compensate for higher production costs. The customer also benefits from the high quality, furthermore from low prices, which are achieved by purchasing only one type of tea directly from the producer and selling the product in large packages. Moreover, the company emphasis transparency towards its partners and customers, i. e. full disclosure of calculations and traceability of tea shipping.

Another main objective of TEEKAMPAGNE is to run their business without harming the environment. First of all the Darjeeling tea is an organic product, which means that no chemicals are used during the production even though this inhibits maximum production. Secondly, the company makes sure that soils do not get exhausted and thus prevent erosions, which are common in other tea plantation. Finally, TEEKAMPAGNE uses big part of their profits to support social and ecological project, for example TEEKAMPAGNE cooperates with WWF-India.

b) The ethical challenges this company is addressing.

The tea business faces different challenges because it is concentrated in less developed countries. The predominant business model is characterized by ethically disputable practices. Until TEEKAMPAGNE started its business there has not been an exception to the established rules of the game.

The company faced ethical dilemmas concerning its relationships to the producers and consumers as well as its attitude towards the environment and the product itself: Other tea companies benefit from exploiting the farmers in countries like India. TEEKAMPAGNE instead buys high quality tea as an end product so that there is a little span between the producer and the customer, which allows them to pay more than 50% of the final price to the producers. TEEKAMPAGNE sees market economic principles as a solution to help less developed countries instead of charitable donations or political subsidies (Trade, not Aid). This close connection to the producer allows TEEKAMPAGNE a strict control over the quality of the Darjeeling tea and to ensure the tea is organic. An ethically controversial alternative to this policy would be to use pesticides and other chemicals to yield the crops.

Another ethical dilemma TEEKAMPAGNE has to face concerns its relationship to its customers. Instead of hiding information about the quality of the product and about the essence of its business TEEKAMPAGNE stands for transparency. Each product is sealed with a quality label that provides information about the origin, ingredients and quality of the tea. Furthermore, customers can trace each product back to its origin and the company discloses it calculation formulas, so that each customer knows how the price is distributed between TEEKAMPAGNE and the producers.

Normally tea production in developing countries is connected with exhausting of the soils and erosion due to the high pressure on producers to reduce cost. TEEKAMPAGNE by contrast puts a strong emphasis on environmental sustainability and they expect producers to keep certain norms for reforesting the slopes and for floral diversity in its plants.

c) What makes you believe this company is really ethical and why you trust it.

Despite many good offers the founder refuses to sell TEEKAMPAGNE, because his ethical principles may not be insured once another owner runs his company. We believe that TEEKAMPAGNE is really an ethical company because of several different reasons. Through meeting Prof. Faltin in person we are convinced that his ethical believes and passion about entrepreneurship are very authentic. TEEKAMPAGNE is a through and through transparent business in showing how the price is calculated, offering the possibility of tracing back its product to the very root, providing any information about its business operations and being open to further questions.
Prof. Faltin, who is also working as a professor at the Free University of Berlin, furthermore helps to realize new business ideas, which meet his ethical standards. He even found a donation supporting these entrepreneurships with a total capital of 500,000 EUR in 2001.
In order be able to provide a durable quality and take care of the environment the TEEKAMPAGNE initiated a project to improve the area?s natural environment with the WWF-India called ?Save the Environment and Regenerate Vital Employment? (S.E.R.V.E.). The cooperation with the WWF, as well as the financial support for the project, is intended as long-term commitment.
Due to all the cooperation with such famous and well known organizations like the WWF, it increases the credibility and trust in the ethical activities of the company.

d) The possible challenges facing the company in the future and how you think this company may improve.

In the tea market many distributors use seals that state that their products are organic but in fact they are not. On the one hand these companies benefit from an ecological image but in fact do not really follow ethical business behavior. On the other hand they just ?greenwash? their products and these negative mechanisms could also be ascribed to TEEKAMPAGNE. Therefore, it is a challenge to maintain the credibility of a trustworthy tea distributor as there are competitive companies that try to imitate the business model. Up to now TEEKAMPAGNE does not run any advertising campaigns but maybe in future it would be recommendable to put more effort in communicating the idea of TEEKAMPAGNE.

TEEKAMPAGNE could further improve by engaging in new projects, such as the already established CO? campaign. The CO? campaign is similar like the TEEKAMPAGNE. They are selling the highest technology of energy saving lamps to a still very low price. The CO? campaign already helped to save 56,782 tons of CO?. Recently the CO? campaign was nominated for the ?Sustainable Energy Europe Award? from the European commission. In addition to that the Company is still trying to develop more business models and be a role model for other entrepreneurs.




Location: Potsdam (Germany)

Sector: tea mail order business

Official website: http://www.teekampagne.de/

Key figures:

- largest mail order tea business in Germany
- the world’s largest importer of Darjeeling loose tea
- more than 170,000 customers
- more than 400,000 kilograms of Darjeeling tea per year
- Sales: 7,5 Mio EUR/Year
- 15 associates

Nbr. visits: 1481

Nbr. inspires: 124