Multinational giant Unilever has announced its acquisition of the Tazo brand from Starbucks for US$384 million. The deal includes the tea brand’s signature recipes, intellectual property and inventory.
“With its strong appeal to millennials, Tazo is a perfect strategic fit for our US portfolio that includes exciting new brands such as Seventh Generation, Dollar Shave Club and Sir Kensington’s,” said Kees Kruythoff, president, Unilever North America.
“Tazo’s solid position in the fast-growing specialty tea segment, coupled with Unilever’s tea expertise, presents a fantastic growth opportunity.”
The transaction is expected to close during the fourth calendar quarter of 2017, with complete transition between the two companies by the end of calendar year 2018, subject to regulatory approval.
Starbucks will continue to invest in the Teavana brand in its stores and in channels outside its stores. The coffee giant said the tea category in Starbucks stores continues to grow double digits globally, with Starbucks well on its way to building the Teavana business to over $3B over the next five years.
“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,” said Kevin Johnson, president and chief executive officer, Starbucks. “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.”
Starbucks has sold more than $1.6B of Teavana beverages in Starbucks stores, launched ready-to-drink premium Teavana Craft Iced Teas in the past 12 months, through its partnership with Anheuser-Busch InBev and plans to enter the packaged tea category in 2018.
Founded in 1994, and purchased by Starbucks in 1999 for $8.1 million, Tazo is an iconic tea brand sold primarily in grocery, mass and convenience channels, offered in formats including packaged teas, K-Cup pods, and bottled ready-to-drink teas.