PepsiCo and Unilever signed a joint venture in 1991 to strengthen the ready-to-drink tea market in North America and Canada. In 2006, they renewed their agreement to expand into 11 new European and Asian countries. The partnership leverages Unilever's tea expertise and PepsiCo's distribution network to market and distribute Lipton iced tea globally.

2.  Introduction - Vinothini
 SWOT Analysis - Asjad
 Objectives - Dhananji
 4P’s - Thilini

3.  1991 Pepsi and Lipton sign a 50-50 joint
venture
 Strengthen the Ready To Drink (RTD) tea
market in North America and Canada
Market

4.  Renew agreement to add 11 new countries
 8 in Europe
› Germany, Italy, France, Netherlands,
Switzerland, Austria, Belgium , Portugal
 Korea, Taiwan, South Africa
 These countries had a combined system
sales of €300m in 2006 (www.unilevers.com)

5. Lipton Brand offers international
consumers a portfolio of convenient
beverages to address a wide range of
needs - Michael White, CEO of PepsiCo
International and vice chairman of
PepsiCo

6.  Global Sales of RTD Iced Tea estimated
at $23b
 French Annual Iced tea consumption up
by 3.2lt per person 2002
 Germany up to 6.5lt per person 2002
 Japan per capita consumption nearly
60ltr per annum
 Unilever claims Lipton market leader in
16 billion liter global RTD Tea Market

7.  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 substantial research and development
capability to the JV

10. Competitors Growth %
Pepsi Co./Unilever’s Lipton 152.6%
Coca cola/Nestle Nestea 57.1%
Snapple Beverages’ 101.1%
Competitor Price per 20 oz
Lipton Brisk Ice tea $1.50
Nestea Lemon Sweetened $1.50

11.  Arizona
 Snapple
 Nestea
 Shin Shii
Since Arizona, Snapple and Shin Shii are
marketed to different consumer segments the
biggest competitor is Nestea where Nestle and
Coco Cola formed a partnership which is also
has global distributor just as Pepsi-Lipton
partnership.

13.  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.

14.  Products’ high pricing - Between US$0.99
and $1.59 per 20oz bottle
 Lesser focus on product orientation

15.  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

16.  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

17.  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

18.  Saturation of hot beverage markets
 Inflation in different countries
 Political unrests and war situations in
White Space markets

19.  To inform about the introduction of Lipton
Sparkling green tea in the United Dairy Farmers
central Ohio which is the test market are.
 To increase 95% recall awareness of the brand
among consumers in the test market are.
 To create familiarity with the benefits of
consuming the green tea in the test market
area.

21.  Product
Lipton Sparkling green tea, a ready to
drink blend of green tea with sparkling
water and fruit flavors.
 Price
Lipton-Between US$0.99 and $1.59 per
20ounce bottle
Arizona-$ 2.00 range per 20 ounce

22.  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

24.  Aggressive Marketing Strategy
 Improve Packaging
 Improve Shelf Presence

25.  Long-Term Goal: World Number One
ready-to-drink ice tea
 Product Innovation