Unilever puts Lipton on back burner as it strategically reviews tea biz

Unilever has initiated a strategic review of its global tea business amidst subdued consumer demand for black tea in developed markets. As such, brands such as Lipton, Brooke Bond and PG Tips will be put up for review.

According to Unilever, its global tea business saw price-led growth, however volumes have been in decline in developed markets for several years due to changing consumer preferences. The sales of traditional black tea is the largest segment of the category, the FMCG giant said, adding that the company has since also expanded into the premium, fruit and herbal market in recent years.

"We continued to focus on the growing segments of premium black tea, black tea in emerging markets and fruit and herbal variants, with our premium herbal brand Pukka performing well. The strategic review will consider all options for Unilever’s tea business and is expected to conclude by mid-year," Unilever said in a statement.

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. In 2017, Unilever acquired British organic herbal tea maker Pukka Herbs in September and bought Tazo Tea from Starbucks Corp for US$384 million in December. Kevin Havelock, president of refreshment, Unilever said then that Tazo represents another strategic addition which strengthens the company's tea portfolio towards high growth segments, and added that Tazo's crafted specialty teas complement Unilever's global tea business.

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 purpose into all its brands; and fuel growth through cost savings. Overall, underlying sales grew 2.9% and growth was led by a strong performance in the Home Care division. Emerging markets grew 5.3%, driven by performance in Asia, Africa, Middle East, Turkey and Russia, Ukraine, Belarus, despite a slow end to the year in West Africa, South Asia and the Middle East.

Unilever also recently had some leadership changes. Former VP and business head of Unilever Professional Aseem Puri was promoted to CEO of Unilever Korea, an added remit to his current role as CMO of Unilever International. According to his LinkedIn, Puri will lead marketing, innovation and digital communication for Unilever International globally, and manage brand building for its portfolio. In addition, Puri will also lead the P&L for South Asia, Southeast Asia and North Asia for Unilever International managing over a 100 brand market cells.

This came months after Unilever promoted Conny Braams to the new role of chief digital and marketing officer, after former chief marketing and communications officer Keith Weed retired in April 2019. Braams last helmed the role of EVP, Middle Europe, and was responsible for Unilever’s business in DACH, Nordics, Italy and the Benelux, where she led the company’s largest European unit.

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