The deal includes Teavana tea products and Starbucks capsules for Nestlé’s Nespresso and Dolce Gusto
Starbucks has reaffirmed its intention to channel all its efforts in the packaged tea sector through Teavana – the tea brand it agreed to acquire towards the end of 2012 – following its $384 million sale of tea brand Tazo.
The coffee chain confirmed it would “drive a single tea brand strategy and focus with its super premium tea brand, Teavana” and will continue to invest in the growth, innovation and development of the Teavana brand – both in its own stores and in channels beyond its stores – in the next few years.
The tea category in Starbucks’ stores continues to grow double-digits globally, with Starbucks well on its way to building the Teavana business into a $3 billion enterprise over the next five years.
In the past 12 months alone, Starbucks has sold more than $1.6 billion’s worth of Teavana beverages in its own stores, underlining the value of this increasingly core brand.
It has already launched a range of premium craft iced teas through its partnership with Anheuser-Busch and plans to enter the packaged tea category in 2018.
Starbucks chief executive officer Kevin Johnson said: “Over the past five years, we have established Teavana as our primary global brand focused on the premium tea segment. With our growth strategy for premium tea exclusively focused on Teavana, we are pleased to transition our Tazo business to Unilever.
“We continue to see significant growth in our tea business through our Teavana brand, and this transition supports our strategy to elevate the premium tea experience for our customers.”
How the deal broke
Unilever agreed to acquire the Tazo brand and all related intellectual property for $384 million, with Unilever North America president Kees Kruythoff saying that it would fit into a new portfolio of brands that appeal to a millennial audience. Unilever has already acquired brands such as Seventh Generation, Dollar Shave Club and premium condiments company Sir Kensington’s.
“Tazo’s solid position in the fast-growing speciality tea segment, coupled with Unilever’s tea expertise, presents a fantastic growth opportunity,” Kruythoff said.
And Kevin Havelock, president of refreshment for Unilever, added: “Tazo represents another strategic addition which strengthens our tea portfolio towards high growth segments. Its artfully crafted speciality teas perfectly complement our global tea business, which includes Lipton, Pure Leaf, PG Tips, T2 and our recent addition, Pukka.”
According to Unilever, the fast-growing speciality tea segment makes up almost half of the total $1.6 billion at-home tea category, and trends suggest it will become more prominent in the future.
For both companies – Starbucks included – tea will play an important role in their future evolution. But for the Seattle-based company, which is better known for serving up coffee than tea, the decision has been made to continue this focus through Teavana alone.
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