China Food

Unilever CEO’s latest statement, Lipton’s tea business is likely to IPO!


How will Unilever’s food and beverage business, with a revenue of more than 150 billion yuan last year, go in the future? Now, the company, which owns Lipton tea, heluoxue ice cream and Jiale condiment, has more new ideas.

 

Xiaoshidai noticed that after Unilever recently released its 2020 results, its chief executive Alan jope disclosed at a subsequent analysts’ meeting that the company was considering promoting the IPO of its tea business, which decided to be divested. In addition, its food and beverage sector also recently delineated two key categories.

Alan jope, CEO of Unilever


Next, let’s take a look at how the FMCG giant calculates.

 

Tea business options

 

Unilever had expected to complete the divestiture of most of its tea businesses by the end of this year, involving brands such as Lipton and PG tips. Previously, the news has triggered speculation that Unilever will sell the tea business with an annual income of nearly 2 billion euros (about 15.578 billion yuan).

 

But according to the CEO’s latest statement, selling is just one of many possibilities. “We will continue to spin off this big piece of tea business, and we are making good progress. At the same time, we are also considering a variety of processing options for this business, including IPO, business spin off, (New) cooperation or sale. ” Joan Lu said.

 

Xiaoshidai also noted that Qiao Anlu said in a recent interview with the company that the IPO is a “highly possible result” for the divested tea business.


In the strategy update part of the performance meeting materials, Lipton and brookbond are still in the dominant brand portfolio

 

It is worth noting that this is not the first time that qiao’an road has released a signal that the tea business has considered listing. As early as before the company announced the adjustment of its tea business, Bloomberg reported that Qiao Anlu pointed out that the cancellation of Unilever’s dual headquarters would help promote the IPO of its tea business.

 

If Unilever really wants to package and list its tea business as a whole, the global tea market may open a new pattern.

 

According to the data obtained by xiaoshidai from Euromonitor International today, the total retail sales of global tea market in 2020 will be US $43.707 billion (about RMB 281.145 billion). Among them, Unilever ranked first with a share of 10.2%. The next four companies were Tata Group (2.5%), CHUANNING parent company Allianz food (2.4%), Greenfield tea (1.7%) and teekanne (1.6%).


 

Xiaoshidai said that according to the sales in 2019, the tea business scale Unilever plans to divest accounts for about two-thirds of its tea business. According to the company’s 2020 financial report, the tea business achieved low single digit growth throughout the year.

 

Last year, Lipton, the company’s tea brand, revealed to xiaoshidai that it has maintained double-digit growth in the Chinese market in recent years. As of October last year, Lipton had more than 200 products in the Chinese market, covering tea bags, tea powder, canned bulk tea and other categories, and sold about 2 billion cups of tea every year.


Two high growth categories

 

Xiaoshidai noticed that at this meeting, Qiao Anlu also released its five new growth strategies for the first time: increasing growth areas; taking mission and innovation as the driving force, using the power of good brand to win; accelerating the development of American, Indian and Chinese markets and giving full play to the advantages of emerging markets; leading the future channel growth; establishing mission driven organizations and growth models that fit the future Culture.

 

So what is the FMCG’s food and beverage business going to do? According to Qiao Anlu, Unilever has identified two high growth categories: functional nutrition and plant-based food, which are also the company’s investment priorities in the next few years.

 

For how to select high growth categories, Qiao Anlu also gives a set of Unilever standards.

“First of all, is the market space we focus on big enough? Are they essentially higher growth? Do they have great potential in the future growth market? Can we see the path to leadership? Finally, whether they belong to the category that Unilever is good at operating in terms of marketing and technology. ” He said that for the categories that meet the standards, the company will lay out by promoting organic growth and acquisitions.

 

In recent years, Unilever is gradually adding functional nutrients and plant-based foods. In the functional nutrition sector, Qiao Anlu introduced at the meeting that Unilever has completed a number of acquisitions, including two VMS (vitamins, minerals and supplements) brands olly and liquid i.v., as well as health drinks hollicks. “The functional nutrition business is on the right track, and the scale will exceed 1 billion euro (about 7.789 billion yuan) in 2021.” He said.

 

Although Unilever did not separately disclose the performance of functional nutrition products, Qiao Anlu disclosed that the total annual revenue of the business and high-end beauty products is about 2 billion euros (about 15.578 billion yuan), accounting for only 4% of the turnover, but it is expected that the two businesses will make a higher contribution to the future growth.

 

In the field of vegetal food, the vegetal meat brand “Zhizhuo butcher” acquired by Unilever in 2018 is a powerful weapon. According to the company’s financial report, Zhizhuo meat maker grew by more than 70% last year.

 

According to xiaoshidai, as of the end of December last year, Zhizhuo butcher’s business has spread to 45 countries and regions around the world, and its products include plant hamburger steak, plant meatball, plant chicken hamburger, plant sausage, etc.


 

Last November, Unilever set a new sales target, that is, sales of its plant meat and dairy substitutes business will reach 1 billion euros (about 7.95 billion yuan) in the next five to seven years. The company said that the achievement of this sales target will mainly depend on the listing of its plant meat brand “Zhizhuo butcher” and the addition of vegetarian options to its products.

 

At present, Zhizhuo meat maker has also been introduced to the Chinese market, and has cooperated with Burger King to launch plant meat hamburger. Xiaoshidai introduced that in China, Zhizhuo butcher has also set up a special R & D team and cooperated with Unilever’s professional chef R & D team to help its products have more local competitive advantages in China. In the future, Zhizhuo butcher will also lay out to C channel and Chinese food market.


 

In addition, xiaoshidai also noticed that analysts at the meeting asked Unilever about its pet care business. Last November, the company launched a new brand called cafun é in Brazil, the world’s second-largest cat and dog market. It has launched pet hygiene products and cleaning products for pet owners.

 

In this regard, Qiao Anlu said at the meeting that marching into pet care “certainly is not a special strategic move.”. “I think the strategic priority areas we are going to focus on are clear. But in addition, we will continue to carry out business experiments, and try all over the country. I’ll see it as an interesting experiment to see how it develops He said.


 

Satisfactory performance

 

Finally, let’s take a look at Unilever’s report card for 2020.

 

According to the financial report, the annual turnover of its food and beverage business (Note: including food, ice cream, beverage and catering planning for catering channels) was 19.1 billion euros (equivalent to 150.164 billion yuan), and the basic sales increased by 1.3%.

 

In terms of categories, retail food has achieved double-digit growth driven by home consumption; catering planning has fallen sharply due to the closure of outdoor channels; ice cream has achieved a small growth as a whole, driven by the rapid transfer of resources to home business.


 

As for the Chinese market, according to Graeme pitkethly, chief financial officer of Unilever, China’s catering planning business continued to recover in the fourth quarter, driven by the recovery of the catering industry in many places.

 

He also said that China’s e-commerce business grew by more than 50%, with online transactions accounting for more than a third of Unilever’s total business in China.


Qiao’an Road


For 2020, Qiao Anlu concluded at the meeting: “in the face of unprecedented uncertainty and volatility in this year, we are satisfied with Unilever’s performance. Thanks to our strong product portfolio. To be honest, Unilever’s agility and responsiveness have reached new heights. Our competitiveness has been significantly improved, and we have made considerable profits and cash flow while choosing to continue to invest heavily in our brands. ” “We are also continuing to push forward the strategic planning, with a good momentum into 2021,” he said

 

“This year, volatility and unpredictability will certainly continue, but we are confident that we can adapt to the changing environment.” Qiao Anlu said.


Pay attention to “xiaoshidai” (wechat: foodinc) “and reply to” Unilever “and” Lipton “to see the wonderful news.

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