Unilever has announced plans to spin off most of its Lipton tea business, while retaining parts of it that are doing well.
At an analyst call July 23, Unilever executives announced the plan, which was the result of a six-month review. Unilever plans to spin off most of its loose-leaf tea business, but retain it in India and Indonesia, as well as retain its RTE tea joint venture with PepsiCo. The plan would affect Unilever’s Tazo, Pukka Herbs, T2 and other brands, as well as Lipton.
The leaf tea business in general has been struggling, losing market share to coffee and to herbal tea. Spinning off the business puts Unilever in a position to sell it, possibly with a licensing-back deal.
“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, and a process will now begin to achieve this separation, which is expected to conclude by the end of 2021,” CEO Alan Jope said in a conference call with analysts.
