Unilever Lipton Ice Tea: overview
- Unilever’s food business deal excludes Lipton Ice Tea operations
- Lipton Ice Tea remains owned through Pepsi Lipton joint venture
- Ready-to-drink beverages sit outside Unilever’s core foods transaction
- Pepsi Lipton operates independently across five global regional divisions
- Unilever already sold most tea brands in 2021
In March this year, Unilever agreed to merge its food businesses with US giant McCormick, with the exception of India. Iconic brands such as Knorr and Hellmann’s were part of the deal. But a key brand wasn’t: Lipton Ice Tea.
The ice tea brand, which is co-owned by Unilever in a joint venture with PepsiCo, called Pepsi Lipton, will retain Unilever’s involvement.
The brand will not be included in the deal with McCormick, explains a spokesperson for Unilever. The joint venture with PepsiCo will remain in place.
“Ready-to-Drink beverages are very different from the other products in Unilever’s Foods portfolio, which is why the business is not included in the transaction,” says the spokesperson.
How the joint venture works
Pepsi Lipton is, as well as being a joint venture between Unilever and PepsiCo, also “a company in its own right”, with its own board of directors, according to the joint venture.
It operates through five regional organisations – North America, ESSA (Europe and Sub-Saharan Africa), Latin America, AMEA (Africa, Middle East and Asia) and Greater China.
Unilever and tea
Unilever used to have other tea brands as well. In 2021, it sold its tea portfolio, which included iconic brands such as PG Tips, to venture capital firm CVC Capital Partners.
Also involved in this deal was Lipton tea, excluding of course Lipton’s ice tea business. Earlier this year, the FT reported that CVC was injecting €210mn in cash back into Lipton, as the brand was hoping to stave off potential debt restructuring.
The brand is struggling as sales of tea in the UK fall, with many younger people switching to coffee.
As well as Lipton, the joint venture manages other ice tea brands such as Pure Leaf Iced Tea and Brisk Iced Tea.
It is overseen by both parent companies, although according to Pepsi Lipton itself, “our entrepreneurial set up gives us real autonomy”.
While Unilever may be offloading major food brands such as Hellmann’s and Knorr, it retains a presence in the beverage market through this joint venture with PepsiCo.
