JOINT VENTURE BETWEEN UNILEVER AND

PEPSICO

Unilever – Overview

Multinational Consumer Goods Company started in year 1929 by Antonius Johannes

Jurgens,William Lever, 1st Viscount Lever Hulme, James Darcy Lever, Samuel van

den Bergh, Georg Schicht

Company co-headquartered in London, England and Rotterdam, The Netherlands.

Its products include food, beverages, cleaning agents and personal care products.

World’s third largest Consumer goods measured by 2012 revenue

30+ percent global market share

Products sold in more than 190 countries

More than 400 brands which includes 14 brands sales over one billion euros.

Axe/Lynx, Dove, Omo, Becel/Flora, Heartbrandicecreams, Hellmann's, Knorr, Lipton,

Lux, Magnum, Rama, Rexona, Sunsilk and Surf.

Unilever is organised into four main divisions - Foods, Refreshment (beverages and ice

cream), Home Care, and Personal Care.

PEPSICO OVERVIEW

PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-

Lay

PepsiCo is an American multinational food and beverage corporation headquartered

in Purchase, New York, United States.

acquisition of Tropicana in 1998 and a merger with Quaker Oats in 2001

As of January 26, 2012, 22 of PepsiCo's brands generated retail sales of more than

$1 billion apiece, and the company's products were distributed across more than 200

countries, resulting in annual net revenues of $43.3 billion.

PepsiCo is the second largest food and beverage business in the world.

Brands formerly owned by PepsiCo include: Pizza Hut, Taco Bell, KFC, Hot 'n

Now, East Side Mario's, D'Angelo Sandwich Shops, Chevys Fresh Mex, California

Pizza Kitchen, Stolichnaya (via licensed agreement)

LIPTON OVERVIEW

Established in 1893 as Thomas J Lipton Co

The Lipton tea business was acquired by consumer goods company Unilever in a

number of separate transactions, starting with the purchase of the United States and

Canadian Lipton business in 1938 and completed in 1972

In 1991, Unilever created a first joint venture with PepsiCo, the Pepsi Lipton

Partnership, for the marketing of ready to drink (bottled and canned) teas in North

America.

This was followed in 2003 by a second joint venture, Pepsi-Lipton International (PLI),

covering many non-United States markets.

PLI was expanded in September 2007 to include a number of large European markets.

In 2007 Unilever Renew agreement to add 11 new countries

8 in Europe

Germany, Italy, France, Netherlands, Switzerland, Austria, Belgium , Portugal

Korea, Taiwan, South Africa

PepsiCo and Unilever each control 50% of the shares of these joint ventures

Lipton is now the leading tea brand in the world

WHY JV BETWEEN THIS TWO COMPANIES?

Leverages complementary strengths of Unilever's Lipton brand and tea know-how with

Pepsi bottling and distribution network

This new alliance will enable Lipton to strengthen its global position.

- Said by Peter Thompson, president and CEO of PepsiCo Beverages International

The new JV will target "white space" markets where Lipton currently is unavailable yet

PepsiCo has a solid presence

Benefits by JV

Unilever

PepsiCo distributes and markets Lipton Ice Tea in more than 60 countries where

PepsiCo has established its corporate presence

Pepsi Co will move Lipton brand into new markets and new distribution

channels

Pepsi has a strong Customer Relations network

Pepsi Co.

Half share of profits to Pepsi Co in selling an established brand

Bottling of Iced Tea is done in Franchise bottling plants

Unilever will bring the brand, knowledge of the tea industry and a substantia l

research and development capability to the JV

MARKET SHARE IN 2003

SWOT ANALYSIS

Strengths

Market Leader: Lipton well established brand name – Claimed as 3rd largest brand

Strong Financial Backup from Both companies

Unilever has a strong R&D department with extreme know-how of tea

Pepsi’s Strong customer relations, large network and distribution channel

PepsiCo is a major distributor in the United States and Canada

Strong brand image and brand awareness.

Weaknesses

Products’ high pricing - Between US$0.99 and $1.59 per 20oz bottle

Lesser focus on product orientation

Opportunities

Further White-space markets

Tea industry growing globally

› Asia Pacific region forecasted to grow at 3.6% through 2015 (dailymirror.lk)

› India Consumption to $7.2bn 2016 (teatrends.com)

Pepsi/Lipton JV to other beverage markets

Other beverages – Health issues

Rising rate in Literacy

Baby Boomers in Asian Markets

More creative RTD Iced Teas in existing markets

Consumers’ preference to RTD convenience

Threats

Competition with Coca cola/Nestle

Economic downturns in venturing new markets

Health concerns with new research data on tea and coffee

Fresh Fruit juices being substituted for Iced teas

Currency fluctuations during Translations

Saturation of hot beverage markets

Inflation in different countries

Political unrests and war situations in White Space markets

Lipton PEST Analysis

4P’s

Product

Lipton Sparkling green tea, a ready to drink blend of green tea with sparkling water

and fruit flavors. There are 12 flavors are available right now.

Price

Lipton-Between US$0.99 and $1.59 per 20ounce bottle

Arizona-$ 2.00 range per 20 ounce

Place

Through the joint venture agreement, PepsiCo would distribute Lipton tea products

in more than 60 countries.

Promotion

Lipton tea and bike town promotion in 2006

Win a smart car promotion in 2009

REFERENCE

http://en.wikipedia.org/wiki/Lipton

https://www.google.co.in/search?q=lipton+market+share+worldwide&rlz=1C1GTPM

_enIN615IN615&es_sm=122&biw=1366&bih=667&tbm=isch&tbo=u&source=univ

&sa=X&ei=NoKiVLWDMYOFuwTnooLYDQ&ved=0CBsQsAQ

http://www.prnewswire.com/news-releases/pepsico-and-unilever-create-pepsi-lipton-

international-rtd-tea-joint-venture- in-selected-international-markets-72491072.html

http://www.unilever.com/mediacentre/pressreleases/2003/pepsi_lipton.aspx

http://www.unilever.com/mediacentre/pressreleases/2007/UnileverPepsicotoexpand.a

spx

http://www.motherearthnews.com/nature-and-environment/rainforest-alliance-

certification.aspx#axzz3NOIJnZKM

http://www.liptontea.com/product

http://en.wikipedia.org/wiki/White_space_%28management%29

https://au.answers.yahoo.com/question/index?qid=20100607211120AA0n3Mg

http://en.wikipedia.org/wiki/Unilever

http://en.wikipedia.org/wiki/PepsiCo