Tea is the most consumed beverage in the world after water. So this popular beverage is a part of many people’s daily routing. Tea mass market is dominated by large players like Unilever (Lipton / Red Label), Tata (Tetley), Twinings, Sara Lee etc. As Food Business News had reported, following a strategic review of its tea business in response to slowing category sales trends, Unilever PLC is planning to keep their tea businesses in India and Indonesia and will continue its joint venture with PepsiCo, Inc., Purchase, NY, to produce, market and distribute Lipton, Brisk and Pure Leaf ready-to-drink iced tea beverages.

Alan W. Jope, chief executive officer, during a conference call with financial analysts on July 23 said, “The balance of Unilever’s tea brands and geographies and all of our tea estates have a very exciting future, but this potential can be best achieved, we believe, as a separate entity,” Jope added further “And a process will now begin to achieve this separation, which is expected to conclude by the end of 2021. And just for noting, the tea business that we’ll separate generated revenues last year of €2 billion ($2.3 billion).”

Brands to be included in the divestment include Tazo, Pukka Herbs, T2 and others. Unilever acquired the Tazo brand from Starbucks Corp. in 2017 for $384 million. Earlier that year, the company purchased Pukka Herbs Ltd. for an undisclosed sum. The review was prompted by declining sales of traditional black tea in developed markets as consumers shift toward Tisanes (Herbal Infusions). Black tea comprises the majority of Unilever’s global tea business.

Unilever entered into its partnership with PepsiCo in 1991. The joint venture covers more than 40 countries.

“When it comes to the joint venture with Pepsi, interestingly, from a market perspective, the ready-to-drink tea market is two-thirds of the global tea market,” said David Pitkethly, chief financial officer. “It’s much bigger; it’s nearly twice the size of the leaf tea market around the world.

Sir Thomas Lipton, the founder of Unilever’s largest tea brand, Liptons, first initiated tea manufacturing at Dambetanna tea factory in Sri Lanka (Ceylon) in 1890. Lipton’s seat situated at the highest peak on this tea estate is one of the most attractive tourist destination in Sri Lanka.

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References

1. Main Source: https://www.foodbusinessnews.net/articles/16498-unilever-to-divest-only-part-of-its-tea-portfolio
2. Company Website: https://www.unilever.com/