Kellogg and Wilmar International: A Partnership Under Fire

by: Andrew Hoffman

Publication Date: February 19, 2014
Length: 16 pages
Product ID#: 1-429-378

Core Disciplines: Strategy & Management, Sustainability

Partner Collection:

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Teaching Note

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Kellogg Chief Sustainability Officer Diane Holdorf is facing a campaign by environmental activists who allege that the company’s Indonesian supplier Wilmar International is illegally growing palm and is engaged in slash and burn practices. Protestors are lining up outside the company’s Battle Creek, Michigan headquarters to rally against the partnership. While Kellogg only uses a small amount of palm in its products, the partnership with Wilmar provides the company with important strategic access to the Chinese market. Holdorf will be speaking with Kellogg’s CEO in two days and is expected to provide him with her recommendations on how to proceed. Students are asked examine the extent of Kellogg’s accountability for Wilmar’s actions and decide how to respond to the allegations against its joint venture partner.

Teaching Objectives

After reading and discussing the material, students should:

  • Understand the challenges and opportunities that arise when corporations attempt to balance expansion into emerging markets with sustainability.
  • Consider the extent to which Kellogg is accountable for Wilmar’s actions and how, if at all, Kellogg should respond to the allegations against its joint venture partner.
  • Evaluate the role of sustainability certifications in the global marketplace, particularly those of RSPO, and whether the RSPO is effective at carrying out its mission.
  • Understand the difficulties that often arise in corporate partnerships and the risks that a company must consider in choosing a strategic partner.