Unilever announce acquisition of Bristol’s Pukka Tea

Unilever (LON:ULVR) has invested in the herbal tea market by acquiring Bristol-based Pukka Tea for an undisclosed sum.

Owner of PG Tip and Lipton, Unilever are expanding their presence in the tea market, with the head of tea saying that Pukka Tea offered a “beautiful and great growth opportunity”.

Pukka Tea founders Sebastian Pole and Tim Westwell have agreed to stay with the brand to help drive global expansion.

Whilst there have been raised concerns for the future of Pukka Tea’s status as an ethical and independent brand, Pukka Tea has agreed “solid iron-clad commitments” from Unilever to stand by Pukka Tea’s important ethical standards.

“Pukka will remain exactly the same but just be able to reach more people and have a greater environmental impact,” said founder Pole.

“Pukka will remain true to its values – 100 percent organic, a B Company, a champion for fair trading through pioneering schemes like Fair For Life, and we will continue to donate one percent of sales to global environmental charities annually.”

Kevin Havelock, President of Unilever’s refreshment category, said: “The acquisition strengthens our tea business, addressing a gap in our portfolio.

“Pukka is a premium player in the natural, organic, health and wellness segment which is fast-growing, attractive and scalable. We look forward to bringing Pukka to even more consumers.”

Head of tea at Unilever, Mick van Ettinger, said: “What’s happening is that people don’t look at tea as one drink now in one moment. They are discovering tea as a magical product that does different things at different times of day,”

“In the morning a lot of people still drink black tea as it picks you up, but in the afternoon or evening herbal tea is wonderful with different benefits.”

Pukka made a pre-tax loss of £24,000 in 2016, which was down from a £233,000 loss in 2015. Westwell said they do not plan to become profitable for another few years.

Pukka Tead currently employs 110 people in Bristol plan to move into Cadbury’s former Somerdale factory in Keynsham.

Unilever shares were slightly higher following the announcement of the acquisition.  Shares were up by 0.5 percent and stand at 4,520p.