Unilever Considers Parting Ways with its Tea Business

Consumer packaged foods firm Unilever initiated a strategic review of its global tea business, which includes iconic brands like Lipton and PG Tips, in response to a slump in black tea sales, the company said in an announcement of its full year results for 2019 published Thursday. 

“Unilever has a long-established position as the biggest tea business in the world with brands such as Lipton, Brooke Bond, and PG Tips; and has expanded into the premium, fruit, and herbal market in recent years,” the company stated. “However, sales of traditional black tea, the largest segment of the category, have been in decline in developed markets for several years due to changing consumer preferences.”

The company said the review of its options should be completed by the middle of this year. 

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During 2019, volumes of tea dipped because of the shift away from black tea, according to Unilever, but the company said the premium herbal brand Pukka “performed well” and it continued to focus on “growing segments” like premium black tea and black tea in emerging markets. 

A company official told the Financial Times that black tea sales have declined steadily over the last four years, especially in west Africa, India, and the Middle East.  

The global tea market is expected to grow by a CAGR of 5.5% from 2019 to 2025, according to a recent forecast by Grand View Research.

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