COFCO Xinjiang Tunhe Co., Ltd.

David E. Bell; Aldo  Sesia

Case | HBS Case Collection | June 2008 (Revised July 2009)

COFCO Xinjiang Tunhe Co., Ltd.

Abstract

In 2005, COFCO Ltd., one of China's largest and most successful companies, acquired Xinjiang Tunhe, a tomato processing firm, which had been, in recent years, poorly managed. COFCO changed Tunhe's management team and set out to create a culture of professionalism and impressed upon the employees that the customer came first. Qin Yelong, Tunhe president, had ambitious goals for the company. he wanted Tunhe to be the world's largest supplier of tomato products (primarily paste) within three years. To do so, Tunhe needed to secure relationships with top-of-the-line international customers, such as H.J. Heinz and Unilever. These companies were interested in Tunhe as a supplier, but needed assurances that the company could provide a reliable supply of high quality, competitively priced, and safe tomato paste year in and year out before they would finalize long term contracts with Tunhe. Qin and his management team knew that to be number one, Tunhe would need to take a lead role in modernizing China's current "peasant mode of agriculture." Indeed, Tunhe's tomato supply came from 200,000 mainly uneducated farmers, working small parcels of land (less than 0.2 hectare on average) with little to no mechanization, scattered across the regions of Northwest China. The challenge: How to manage so many farmers (the number was expected to grow to 300,000 if Qin's revenue targets were achieved) so as to ensure consistent tomato quality and safety without dramatically increasing costs. Qin realized that Tunhe had an opportunity to create a new mode of agriculture, which could be the model for all agribusiness in China moving forward. On the other hand, a misstep could lead Heinz and other large international companies to look elsewhere for their supply requirements.

Keywords: Agribusiness; Customer Relationship Management; Rural Scope; Supply Chain Management; Performance Consistency; Safety; Agriculture and Agribusiness Industry; China;

Format: Print

32 pages

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Citation:

Bell, David E., and Aldo Sesia. "COFCO Xinjiang Tunhe Co., Ltd." Harvard Business School Case 508-079, June 2008. (Revised July 2009.)

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Teaching Note | HBS Case Collection | May 2020

Danone: Changing the Food System

David E. Bell, Federica Gabrieli, Daniela Beyersdorfer, Amy Klopfenstein and Aldo Sesia

Teaching Note for HBS No. 520-053.
This is a teaching note for the case “Danone: Changing the Food System?” The case examines the efforts of one of the world’s largest food and beverage companies to resolve the social, environmental, and economic issues within its supply chain. Chairman and CEO Emmanuel Faber and One Planet and Water Cycle Vice President Eric Soubeiran believe that the global food system is broken, and needs radical transformation to save the planet. The case provides an overview of Danone’s efforts to change the food system, including Cost Performance Model (CPM) contracts with dairy farmers and encouraging suppliers to prioritize regenerative agriculture and the ethical treatment of animals. However, it remains unclear whether consumers are willing to pay a premium for sustainably-produced products. At the conclusion of the case, Faber and Soubeiran wonder what Danone should do next to repair the food system. The note contains suggested assignment questions, a sample board plan, and a suggested discussion plan.

Keywords: Food; Goods and Commodities; Agribusiness; Animal-Based Agribusiness; Plant-Based Agribusiness; Strategy; Corporate Strategy; Environmental Management; Environmental Sustainability; Climate Change; Agriculture and Agribusiness Industry; Food and Beverage Industry; Europe; France; Paris;

Citation:

Bell, David E., Federica Gabrieli, Daniela Beyersdorfer, Amy Klopfenstein, and Aldo Sesia. "Danone: Changing the Food System." Harvard Business School Teaching Note 520-066, May 2020. View Details

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COFCO Xinjiang Tunhe Co., Ltd.

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