Business / Business Strategies / Capital Spending / Industry News

Unilever to Acquire Tazo from Starbucks

By Lauren R. Hartman, Product Development Editor

Nov 03, 2017

Unilever p.l.c. says it will buy the Tazo brand from Starbucks, a key brand in the burgeoning specialty tea category in a deal worth $384 million. Under the asset purchase agreement, Unilever will acquire the Tazo brand and all related intellectual property, signature recipes and inventory. Starbucks purchased Tazo in 1999 for $8.1 million.

Founded in 1994, Tazo offers packaged teas, ready-to-drink teas and K-Cup pods in grocery, mass and convenience channels, including specialty black, green and herbal teas, as well as liquid concentrates focused in the chai latte category.

The fast-growing specialty tea segment makes up 48 percent of the total U.S. $1.6-billion at-home tea category. Trends suggest it will become more prominent in the future. Tazo is sold primarily in the U.S. and Canada.

“With its strong appeal to millennials, Tazo is a perfect strategic fit for our U.S. portfolio that includes exciting new brands such as Seventh Generation, Dollar Shave Club and Sir Kensington’s,” said Kees Kruythoff, president of Unilever North America. “Tazo's solid position in the fast-growing specialty tea segment, coupled with Unilever’s tea expertise, presents a fantastic growth opportunity.”

Tazo represents another strategic addition that can bolster Unilever's tea portfolio toward high growth segments, added Kevin Havelock, president of refreshment for Unilever. “Its artfully crafted specialty teas perfectly complement our global tea business, which includes Lipton, Pure Leaf, PG Tips, T2 and our recent addition, Pukka.”

Subject to regulatory approval, the transaction is expected to close in the fourth quarter. of 2017. Once the deal is finalized, Starbucks said it will drive a single tea brand strategy and focus with its Teavana brand.