Unilever may put Lipton on the block
As the flat white trounces black tea, Lipton’s owner Unilever is weighing a sale of one of its bestknown brands.
The Anglo-dutch giant initiated a review of its global tea business, which includes the more than century-old label and generates sales of almost ^3 billion ($3.3 billion). The move comes after the company’s slowest quarterly growth in a decade.
Unilever is following a consumer shift to coffee as a primary source of caffeine, with takeaway cafes proliferating from London to Beijing and capsule-spewing espresso machines supplanting kettles on kitchen counters around the world.
In the UK, almost 900 million fewer cups of tea were drunk over the 12 months through May 2018, according to trade publication The Grocer. Even those who eschew coffee are giving a pass to the traditional cup of English Breakfast or Earl Grey, opting for herbal alternatives. Demand for black tea has been “slowing in developed markets for several years due to changing consumer preferences,” CFO Graeme Pitkethly said on a call. The strategic review “could include a whole range of options — no ownership, partial ownership.”
The review accelerates CEO Alan Jope’s restructuring of the owner of Dove soap and Ben & Jerry’s ice cream, which has been hurt by sluggish demand for big brands. Under predecessor Paul Polman, Unilever sold its margarine and spreads business to KKR & Co. for about $8 billion. The company tried to profit from growth in herbal tea by acquiring the Pukka brand in 2017.
The shares rose as much as 1.6 per cent early Thursday in Amsterdam. The tea review is expected to conclude by midyear.