Economy

Unilever considers unloading Lipton tea as consumers favor cold sparkling varieties

Unilever considers unloading Lipton tea as consumers favor cold sparkling varieties”

As the flat white trounces black tea, Lipton owner Unilever is weighing a sale of one of its best-known brands. Options include a partial or full sale of the business, he said without giving a timeframe.

Black tea comprises two-thirds of Unilever's tea segment, which generates $3.3 billion in yearly sales globally for Unilever, however, sales have dropped in developed markets in recent years due to changing consumer preferences, the company told analysts on a conference call Thursday.

Meanwhile, Unilever CEO Alan Jope said in the 2020 financials that the company will now step up execution against its fundamental drivers of growth. These include increase penetration by improving brand awareness and availability; implement a more impactful innovation programme; improve company's performance in faster growing channels; drive goal into all its brands; and fuel growth through cost savings. Unilever said global sales grew 2.9% in the fourth quarter and India performed well in a slowing market. Black tea is the dominant part of Unilever's tea business, Pitkethly said, selling in 60 countries and generating 3 billion euros ($3.3 billion) in annual sales.

Unilever said the impact of the coronavirus outbreak was too early to quantify but it could affect a fifth of its China professional food service business because fewer people will eat out. The tea review is expected to conclude by midyear.

More news: Two Cases of Coronavirus Confirmed in UK - England's Chief Medical Officer

Lyons Tea is the most popular tea brand in Ireland and can trace its origins back to 1902 when the Lyons family opened a tea importing business in Dublin's Christchurch. In 2017, Starbucks Corp. announced that it would close all of its 379 mall-based Teavana stores due to persistent underperformance.

'We are continuing to evaluate our portfolio and have initiated a strategic review of our global tea business, ' Jope said.

Jope has been quicker than his predecessor to rethink Unilever's business.

Unilever first ventured into the premium tea space when it bought Australian tea company T2 in 2013 to bring the benefits of scale and access to new markets to the T2 business and for both businesses to share tea category expertise.



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