Pepsi extends Unilever tea deal

By Neil Merrett

- Last updated on GMT

Related tags: Europe, Coca-cola, Netherlands

Pepsi and Unilever are to extend their agreement over distribution
and marketing of the Lipton ready-to-drink tea brand to target a
growing global demand for the products..

Through the deal, Pepsi will combine its bottling and distribution networks with Unilever's core tea brand to double the global capacity of their joint venture. The company revealed that the agreement would allow it to extend its reach to markets in both in Europe and Asia, targeted growing consumer demand for non-carbonated alternatives for soft drinks. With consumers turning away from carbonated beverages towards products that claim health and nutrition benefits, PepsiCo's chief executive officer Michael White said the deal was an important step for growth of it global operations. "This is a wonderful opportunity to strengthen our position in one of the fastest-growing beverage categories,​" he stated. Under the agreement, the partnership will operate in 11 new markets in Western Europe and Asia. This will extend the venture into Germany, Italy, France, the Netherlands, Switzerland, Austria, Belgium and Portugal as well as Korea, Taiwan and South Africa A previous agreement between the two companies has been in place since 1991, resulting in the creation of the leading ready-to-drink tea brand in the US, PepsiCo claims. This deal was extended in 2003 with the formation of the Pepsi Lipton International joint venture that operates in over 40 countries worldwide. The move to expand their focus into Western Europe in particular could prove prudent for the group, with the region enjoying strong growth for sales of tea-based beverages. Between 2002 and 2006 the market for ready-to-drink tea products grew 7.4 per cent to €1.5bn, according to consumer analyst Euromonitor.

Related topics: Tea and Coffee, Markets, PepsiCo

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