Unilever Looks to Move Beyond Black Tea With Tazo Buy
November 02 2017 - 7:23PM
Dow Jones News
By Saabira Chaudhuri
Unilever PLC's $384 million deal to buy Tazo tea from Starbucks
Corp. is its biggest move yet in a pivot from slower growing black
tea toward higher-growth brands it hopes will help it foster more
discerning -- and more profitable -- tea drinkers.
The Anglo Dutch consumer-goods giant sells Dove soap, Axe
deodorant and Ben & Jerry's ice cream, among other mega bands.
It is also the world's biggest tea maker by sales. Its global tea
brands include Lipton, Pure Leaf and PG Tips. But it has been
working to shift its footprint away from black tea, which makes up
about 80% of its portfolio, to green, herbal and specialty tea. It
is selling new varieties under its existing tea brands, while also
buying up small, fast growing competitors.
In September, it agreed to buy U.K. herbal tea brand Pukka, and
in 2013 bought premium Australian tea company T2 -- which sells
pricey loose leaf in flavors like beetroot and broccoli and red
chocolate mint. It has since rolled the brand out internationally,
opening stores around the world.
Tazo, which had sales of $112.5 million over the past year,
sells specialty black, green and herbal teas, as well as liquid
concentrates to make chai lattes. It is sold in Starbucks outlets
and grocery stores in the U.S. and Canada.
Thursday's deal is the latest in a string of small and
medium-size acquisitions by Unilever, which has been aggressively
increasing its exposure to a range of high-growth areas. It fended
off an unsolicited $143 billion offer by Kraft Heinz Co. earlier
this year and has promised investors better returns. Over the past
18 months it has bought high-end ketchup maker Sir Kensington's,
subscription shave service Dollar Shave Club and eco-friendly
household products maker Seventh Generation.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
November 02, 2017 19:08 ET (23:08 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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