14 September 2007
UNILEVER AND PEPSICO TO EXPAND
READY-TO-DRINK TEA JOINT VENTURE
• Agreement will double current International Joint Venture volume
• Leverages complementary strengths of Unilever's Lipton brand and tea
know-how with Pepsi bottling and distribution network
September 14th, 2007
PepsiCo and Unilever today announced they have agreed to expand their
International partnership for the marketing and distribution of ready-to-drink
tea products under the Lipton brand, the world's best-selling tea.
The new agreement adds 11 countries to the partnership's existing Lipton
ready-to-drink tea business. The business in these countries - eight in Europe
(Germany, Italy, France, Netherlands, Switzerland, Austria, Belgium and
Portugal) as well as Korea, Taiwan and South Africa - had combined systems sales
to the trade of around €300m in 2006. The new agreement effectively completes
the partnership and creates the leading global ready-to-drink tea business.
The new agreement builds on the original 1991 Pepsi Lipton Tea Partnership
(PLTP) North American joint venture that established Lipton as the leading
ready-to-drink tea brand in the United States, and on the subsequent 2003 Pepsi
Lipton International (PLI) joint venture that currently spans more than 40
countries and has enjoyed strong double-digit volume growth.
The new agreement will more than double the volume of the companies' current PLI
joint venture and positions both companies to capture more of the growth
opportunities associated with the rapidly expanding global ready-to-drink tea
Under the terms of the agreement a mechanism is established for PLI to open new
ready-to-drink tea markets. Each company will continue to own 50% of the joint
venture, with PepsiCo paying Unilever an undisclosed sum for its share of the
businesses in the new markets being transferred.
'This is a wonderful opportunity to strengthen our position in one of the
fastest-growing beverage categories,' said Michael White, chief executive
officer of PepsiCo International and vice chairman of PepsiCo. 'Lipton is one
of the world's great beverage brands, and will continue to be a key pillar of
our strategy to offer international consumers a portfolio of convenient
beverages to address a wide range of needs.'
Vindi Banga, Unilever's president for Foods, said: 'This agreement gives us the
opportunity to build on the tremendous success of the joint ventures to date.
It provides an excellent opportunity to realise the long-term potential of the
Lipton ready-to-drink brand, and Pepsi's expertise in the drinks sector will
help us drive innovations faster and more competitively.'
The agreement is subject to receiving approvals from the relevant regulatory
authorities, employee consultations, and, for Portugal and South Africa,
agreement with Unilever's existing partners. The transaction is expected to be
effective from the beginning of January 2008.
PepsiCo (NYSE: PEP) is one of the world's largest food and beverage companies,
with 2006 annual revenues of more than $35 billion. The Company employs
approximately 168,000 people worldwide, and its products are sold in
approximately 200 countries. Its principal businesses include: Frito-Lay snacks,
Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods.
The PepsiCo portfolio includes 17 brands that generate $1 billion or more each
in annual retail sales. PepsiCo's commitment to sustainable growth, defined as
Performance with Purpose, is focused on generating healthy financial returns
while giving back to communities the company serves. This includes meeting
consumer needs for a spectrum of convenient foods and beverages, reducing the
company's impact on the environment through water, energy and packaging
initiatives, and supporting its employees through a diverse and inclusive
culture that recruits and retains world-class talent. PepsiCo is listed on the
Dow Jones North America Sustainability Index. For more information, please
Unilever's mission is to add vitality to life. We meet everyday needs for
nutrition, hygiene and personal care with brands that help people feel good,
look good and get more out of life.
Unilever is one of the world's leading suppliers of fast moving consumer goods
with strong local roots in more than 100 countries across the globe. Its
portfolio includes some of the world's best known and most loved brands
including twelve €1 billion brands and global leadership in many categories in
which the company operates. The portfolio features brand icons such as Flora,
Bertolli, Dove, Lux, Pond's, Lynx, Sunsilk, Persil, Cif and Domestos.
Unilever has around 179,000 employees in approaching 100 countries and generated
annual sales of €40 billion in 2006. For more information about Unilever and
its brands, visit www.unilever.com.
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