Unilever Retains Stake in Lipton Ice Tea Amid Food Business Deal with McCormick

Unilever has decided to retain its stake in the Lipton Ice Tea operations despite merging most of its food businesses with the US company McCormick. Notably absent from the transaction is the Lipton Ice Tea brand, which is held as part of a joint venture with PepsiCo. This collaboration, known as Pepsi Lipton, functions as a standalone company with its own board of directors and operates across various regions including North America, ESSA (Europe and Sub-Saharan Africa), Latin America, AMEA (Africa, Middle East and Asia), and Greater China.

The decision to keep Lipton Ice Tea was confirmed by a Unilever spokesperson, who noted that ready-to-drink beverages differ significantly from other items in Unilever's food portfolio, justifying the exclusion from the McCormick deal. The joint venture, besides Lipton Ice Tea, manages other related brands such as Pure Leaf Iced Tea and Brisk Iced Tea, maintaining their operations independent from Unilever's core food products.

Unilever's strategic move comes after the company sold most of its tea brands to CVC Capital Partners in 2021, a deal that included popular names like PG Tips but excluded Lipton Ice Tea. Earlier this year, it was reported that CVC injected €210 million back into the Lipton brand as it struggled with declining tea sales in the UK, attributed to shifts in consumer preferences towards coffee.

The continuing partnership with PepsiCo ensures that Unilever remains active within the beverage sector, while also adapting its food business strategies by integrating with McCormick. This retention reflects the importance of the ready-to-drink beverage category, indicating a targeted approach to different segments of the consumer market.