STiR coffee and tea magazine

14 STiR coffee and tea | 2026 Quarter 1 Spring (Mar/Apr/May) Hindustan Unilever Brews Success Unilever's recent SariWangi divestiture highlights a stark reality — tea has become a risky investment. As the multinational exits territory after territory, one stronghold remains — Hindustan Unilever (HUL). While other Unilever tea portfolios have stalled, HUL continues to brew robust growth in the subcontinent and earn high returns. What sets HUL apart from Unilever's other tea endeavors? HUL's beverage brands, including Taaza, 3 Roses, Brooke Bond, Taj Mahal, and Bru, contribute nearly 12% of the company's revenue, with tea accounting for approximately 80% of this segment. The secret? A multitiered brand strategy that captures every income segment. At the base sits Taaza, targeting economy consumers with fresh green tea blends and accessible pricing. Brooke Bond Red Label dominates the mid-market, holding a significant share with its "togetherness" positioning, transforming tea from mere refreshment into a catalyst for social bonding. At the premium end, Taj Mahal has commanded loyalty among affluent consumers since 1966, when it was introduced as India's first premium tea, with innovations such as tea bags and vacuum-packed offerings. This pyramid approach allows HUL to capture consumers across India's diverse economic spectrum, preventing downtrading while encouraging premiumization as incomes rise. HUL's "Winning in Many Indias" business model recognizes that dialects, customs, and rituals change every 100km in India, treating the country as 15 distinct consumer clusters rather than a homogeneous market. This hyperlocalization drives innovation and distribution strategies tailored to regional preferences — whether dust tea in the South or leaf tea in the North. The strategy includes flexible pricing that passes commodity deflation benefits to consumers while taking inflation increases in "small bites" to maintain the consumer franchise. This pricing agility, combined with rural penetration through the Project Shakti program, which empowers women micro-entrepreneurs, creates deep market access that competitors struggle to replicate. Despite tea being a mature category with high penetration, HUL's tea brands have grown in double digits by identifying emerging trends. The company pioneered the development of the green tea market in India, launching variants under both Lipton and Taj Mahal to capture different consumer segments. Product innovation remains relentless, with flavored teas, health-focused variants such as Red Label Natural Care, premium green tea offerings, and convenient tea bag formats for urban consumers. HUL also leverages its sustainability credentials, partnering with the Tea Research Association on climate resilience and regenerative agriculture. While competition remains intense — Tata leads in volume — HUL contin- ues to maintain its position among the top tea brands in India. Regional players like Wagh Bakri, along with countless small and loose-leaf tea providers, create a fragmented competitive landscape that requires constant vigilance. The contrast is striking. SariWangi contributed only 3.1% of Unilever Indonesia's net profit and 2.7% of revenue despite strong brand recogni- tion. Meanwhile, Unilever's India tea business delivers double-digit growth and market leadership. By Bhavi Patel Hindustan Unilever's tea portfolio does things differently, making it one of Unilever's last successful tea enterprises. Photo credit: Hindustan Unilever Unilever Sells Tea Subsidiary SariWangi Unilever recently announced the divestiture of yet another tea subsidiary. On January 6, Unilever Indonesia agreed to transfer the tea brand SariWangi to Savoria Kreasi Rasa for Rp 1.5 trillion ($89.45 million). Once the world's largest international tea business, Unilever now only operates tea brands in India and Nepal, along with its interests in Pepsi-Lipton ready-to-drink operations. Founded in 1973 and acquired by Unilever in 1989, SariWangi pioneered the tea bag format in Indonesia. SariWangi's commitment to high quality and innovation ensures good brand recognition, lasting customer loyalty, and a strong market share. However, despite being a leading local tea brand, the company contributes only a modest (3.1%) of net profit to Unilever Indonesia, an estimated 2.7% of its total revenue. Savoria Kreasi Rasa, a subsidiary of the fast-moving consumer goods (FMCC) company Savoria Group, is eager to acquire a legacy brand with strong cultural ties to Indonesia. As a locally owned company, Savoria Kreasi Rasa is strongly positioned to guide SariWangi's next growth phase. Rising price sensitivity and consumer preference for local and more regional players have made Indonesia's FMCC market extremely competitive. In 2024, Unilever Indonesia reported an 18% year-on-year (YOY) decline in sales (a 6.1% YOY decline in its food and refreshment businesses), resulting in net profit dropping 62% to Rp 543 billion, citing price volatility and consumer cutbacks, leading to a broader restructuring in Indonesia. However, the company bounced back in 2025, posting strong Q3 results, with net sales of Rp 9.4 trillion, up 12.4% YOY. Despite higher overall company profits in 2025, hot tea sales in Indonesia remain stagnant. According to Global Data, Indonesian hot tea volumes from January to September 2025 rose just 0.4% to 6.14 billion liters, while third-quarter volumes (July-September last year) actually declined 0.5% YOY to 2.05 billion liters. Lagging hot tea sales in Indonesia prompt Unilever to sell its tea brand, SariWangi. Photo credit: SariWangi Stagnant hot tea volumes in Indonesia reflect a worldwide long-term decline in commodity tea sales, as more consumers shift to coffee, specialty loose-leaf teas, and iced beverages. This alarming trend prompted Unilever to sell its global tea business, Ekaterra, to CVC Capital Partners in 2022, for $5.26 billion. By Diana Jendoubi Tea Report

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