LONDON/ROTTERDAM – Unilever announced on Monday that, further to the announcement made on 2nd November 2017, it has completed the acquisition of Tazo brand from Starbucks.
Under the asset purchase agreement, Unilever has acquired the Tazo brand and all related intellectual property, signature recipes and inventory for US$384 million. The transaction represents a multiple of 10 times pro forma EBIT. Tazo had sales of US$112.5 million over the past year*.
Starbucks, which bought Tazo about 18 years ago for $8.1 million, said it wants to focus on its Teavana tea brand. Although Starbucks has been shutting down stand-alone Teavana stores, it still sells its teas in stores.
Founded in 1994, Tazo has a strong position in Specialty Black, Green and Herbal teas, as well as liquid concentrates focused in the Chai Latte segment. The fast-growing specialty tea segment makes up 48% of the total US$1.6 billion (FY 2016) at-home tea category and trends suggest it will become more prominent in the future**. Tazo is sold primarily in grocery, mass and convenience channels in the US and Canada, and is offered in formats including packaged teas, K-Cup® pods and bottled ready-to-drink teas.
“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.”
“TAZO® represents another strategic addition which strengthens our tea portfolio towards high growth segments. Its artfully crafted specialty teas perfectly complement our global tea business, which includes Lipton, Pure Leaf, PG Tips, T2 and our recent addition, Pukka,” said Kevin Havelock, President of Refreshment, Unilever.
*LTM 6/30/2017 Tazo Net Revenue is $112MM ($112,471,883). **Unilever calculation based in part on data reported by Nielsen through its ScanTrack Service for the tea category for the 52-week period ending 12/17/16, for the total U.S. market, xAOC, according to the Unilever custom product hierarchy.