STiR coffee and tea magazine

22 STiR coffee and tea / Issue 5, 2020 (October / November) According to Allied Market Research, Unilever will retain the core brand in high-growth markets and divest in slow-growth regions such as Australia and Europe, where the popularity of black tea is in decline. In Kenya, 60,000 workers employed by Unilever Tea Kenya Ltd. anticipate a gradual scaling back of operations at the 8,700-hectare Kericho Tea Estate. Staff is uneasy, according to The Nation, which reports Unilever "has not yet revealed its plans with its Kenya operations to shareholders, who have endured five years without receiving dividends owing to losses." In August, Sylvia-ten Den, managing director at Unilever Kenya Tea Ltd. advised the Kenya Agricultural and Plantation Workers Union (KPAWU) "that the company is changing its operating model." She writes that, "Unilever will form a new company to manage its global tea business and that the new entity's form and shape will be decided at the end of next year. She assures that until then operations will proceed as normal," according to The Nation. Unilever contracts with 30 Kenya tea estates as well as the Kenya Tea Development Agency (KTDA), which represents another 69 estates that produce black and green tea. In addition to Kenya, Unilever contracts with tea gardens in Malawi (21), Uganda (13), Tanzania (12), and Zimbabwe (6). Unilever will likely continue to purchase tea grown in Africa but market the tea under its Indian Brands. Brooke Bond, which was acquired by Unilever, has a century-old tradition of growing tea in Africa. The coronavirus pandemic is forcing companies to reassess their core divisions and shift focus to higher-growth areas, say bankers and mergers and acquisitions lawyers, according to MarketWatch. "So far this year, companies globally have sold 8,895 non-core assets worth a total of $391 billion, according to financial data provider Refinitiv. That compares to 11,294 asset sales worth almost $415 billion for the same period in 2019," writes MarketWatch. US Amazon vs Walmart Walmart and Amazon benefitted enormously from the surge in e-commerce grocery order and delivery. Now both are aggressively moving to maintain that momentum as Walmart introduces Walmart+ and Amazon increases its store count and opens 1,000 neighborhood delivery hubs. Amazon Pantry, launched three years ago and since expanded to nine countries, allowed Prime members to receive non-perishable food products and household items for a flat delivery fee. Delivery is now free on orders totaling $35 or more. The success of the program led Walmart to follow with its own version of Amazon Prime, which costs $119 per year. Walmart+ is priced at $98 and includes unlimited free delivery from stores, including groceries, as well as a 5-cent fuel discount at the company's 2,000 Walmart and Murphy Express gas stations. The program launched in mid-September and requires a minimum $35 order. Walmart added millions of new customers during the past six months, many in proximity to one or more of its 4,700 stores. The company generated $21.5 billion in e-commerce sales. Amazon posted a record profit of $5 billion on $89 billion in sales during the three months ending July 2020. In 2019 nearly half of Amazon's $3 billion in grocery sales were earned in the coffee, tea, and snacks categories. Coffee alone accounted for $1.2 billion in sales in the 52 weeks ending in May. Grocery sales tripled during the second quarter as the pandemic boosted an already impressive 45% growth in 2018. To meet demand, Amazon hired 175,000 workers this spring and is expanding its physical retail locations and adding up to 1,500 small neighbor- hood hubs in vacant mall store fronts and now-empty big-box stores, accord- ing to Bloomberg. The company opened its second Go Grocery store in Redmond, Wash. in September. The 13,000 sq. ft. store sells fresh produce, is stocked with 5,000 products, including baby foods and supplies, and is equipped with a kitchen to prepare breakfast and lunch items. Shoppers Just Walk Out, using the company's no-cashier payment system. Additional Go Grocery locations are planned for Washington, DC. The Go Grocery format stores are more than double the size of Amazon's 26 Go convenience stores, which are expected to add hot food and cold beverage fountains. Go stores range in size from 450 sq. ft. to 2,700 sq. ft. Amazon also operates an Amazon Fresh location in southern California with Alexa sales support and Dash Cart checkout lanes and will soon open Amazon Fresh stores in Chicago and Philadelphia. Neighborhood distribution hub.

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