Consumer goods company Unilever could sell the PG Tips and Lipton tea brands as demand for tea continues to decline and it reviews its tea business.
The PG Tips and Lipton tea brands could be sold by Unilever due to falling demand. According to the firm, it is currently conducting a review of its tea business amidst a slowdown in sales as more consumers turn to the herbal variety.
The business review is part of Unilever chief executive officer (CEO) Alan Jope's initiative to refocus the company and concentrate on fewer brands. The consumer goods company said its sales in the final three months of 2019 increased by just 1.5% but it expects a stronger performance in 2020.
Unilever has expressed that it would be examining "all options" for the tea business, including a partial or full sale.
Research firm Kantar reported that while the British tea industry is worth £667 million annually, demand for traditional black tea has declined by 2.7% over the last two years. Meanwhile, the demand for other types of tea has increased, with herbal teas now worth £52 million and cold infusions valued at £11.2 million.
Despite the uncertainty surrounding Lipton's future, it remains one of Unilever's seven highest-earning brands. The other top earners are Dove soap, Knorr food products, Persil/Omo washing powder, Rexona deodorant, Hellmann's mayonnaise and Wall's ice cream, also known as Ola, Algida, Kibon and Langnese in other countries.
Since Jope took the reins of the company, he has targeted what he calls "brands with purpose", saying that brands which do not have a clear social or environmental function could be eliminated from the company's product lineup.
In 2019, he told reporters that Unilever was taking a close look at such brands as Marmite, Magnum ice cream and Pot Noodle. He said it was no longer enough for consumer goods companies to sell just effective products because consumers wanted to buy brands that have a "purpose" too.
