Unilever offloads tea biz for US$5.1bn, excludes Indonesia ops

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Unilever is selling its tea business, ekaterra, to private equity firm CVC Capital Partners for about US$5.1 billion on a cash-free, debt-free basis. Unilever will retain its tea business in Indonesia, India, and Nepal, as well as its interests the Pepsi Lipton ready-to-drink tea joint ventures and associated distribution businesses. With a portfolio of 34 brands including Lipton, PG tips, Pukka, T2 and TAZO, ekaterra generated revenues of US$2.2 billion in 2020. The sale is expected to the complete in the second half of 2022.

Unilever began a strategic review of its global tea business last year amidst subdued consumer demand for black tea in developed markets. The company said previously that 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. MARKETING-INTERACTIVE has reached out to Unilever for additional information regarding the sale.

Unilever CEO Alan Jope said the evolution of the company's portfolio into higher-growth spaces is an important part of its growth strategy for the company. While Unilever has made the decision to sell ekaterra, Jope added that the company is very proud of the tea's history in Unilever's history.

"We look forward to seeing ekaterra, with its strong brands and global footprint, prosper under CVC Fund VIII's ownership. I would like to thank our tea colleagues around the world for their passion and commitment to our tea business and wish them well for the future," he explained.

Built on strong foundations of leading brands and a purpose-driven approach to its products, people and communities, managing partner at CVC Capital Partners, Pev Hooper, said ekaterra is well-positioned in an attractive market to accelerate its future growth. Additionally, this will enable the company to lead the category's sustainable growth.

In January last year, Unilever 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 were placed on review. While its global tea business saw price-led growth, Unilever said 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.

Separately, Unilever also witnessed some changes on its communications team, as media veteran David Porter exits after 11 years. Porter has been holding the role of VP, global media for five years. He is currently based in Singapore. Prior to the role, he was media director for North Asia, based out of Shanghai for three years. He has also worked in markets such as North Africa, middle East, Turkey, Russia and Belarus. He is set to exit his post in early 2022.

Porter was responsible for one of the largest media budgets in a diverse region spanning 14 time zones. He was also responsible for driving the company’s innovation in communications channel planning with a strong focus on Unilever’s development as a major force in digital marketing in the region. He spent 25 years in UK agencies before a seven-year stay in Asia Pacific with Mindshare, where he managed the agency’s multimarket relationship with Unilever.

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Photo courtesy: 123RF

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