Englewood Cliffs-based Unilever announced Thursday during its earnings call that it is making a strategic review of its tea business — which means the brand likely is looking to unload the $3 billion business.
Such a decision to sell could impact jobs in New Jersey. So said Howard Dorman, national practice leader — food & beverage for Mazars USA.
“In any big deal like this, there has to be synergies that can create cost savings; otherwise, they are not going to do it,” he said.
How many potential jobs could be lost depends on who buys the company. Should it be another tea company, Dorman said it would make little sense to keep the marketing and research & development employees. If it went to a private equity firm, Dorman said those types of employees could be spared, but other cuts surely would come.
“In every situation like this, there are always casualties,” he said.
Dorman said he was surprised Unilever had reached a decision to explore options on its tea business, which he said is one of the company’s 10 biggest.
“Within the last 3-4 years, they’ve acquired several tea brands to pivot from the so-called traditional black tea, which Lipton is,” Dorman said, noting Unilever has picked up brands all over the world, including Tazo from Starbucks.
Dorman said Unilever CEO Alan Jope, who took over Jan. 1, 2019, may have run out of patience.
“It’ a $3 billion sector for them,” Dorman said. “I know sales are up, volume is down, prices are up — and it’s flat. I guess they make quick decisions and feel it is time to sell.”