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Should Lipton leaf tea enter the Brazilian market?

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About the document

Published date
documents in English
market study
60 pages
2 times
Validated by
  1. Hot drinks market & Key success factors in Brazil
    1. External analysis
    2. Key success factors to enter the Brazilian market
  2. Unilever's challenges in tea & Recommendation on its strategy in Brazil
    1. Internal analysis
    2. Key challenges in tea and recommended strategy
  3. Operational recommendations on Unilever Mix Marketing in Brazil
    1. Product & Price
    2. Promotion
    3. Place

Western Europe, Lipton's biggest market, shows a poor growth outlook in the tea market. The brand and other tea brands of Unilever are also present in other markets where the sales outlook is better, but are almost absent in Latin America with a unique presence in Chile. Nevertheless, this market is expected to grow tremendously for the coming years, especially in Brazil. Unilever has already tried to enter this country about ten years ago with its Lipton brand and totally divested in 2003 because it did not adapt its strategy enough to the particular consumption habits and the Brazilian culture.

Today, the tea and other hot drinks markets are extremely fragmented in Brazil. Furthermore, the market is becoming more mature regarding tea consumption, the Brazilian population is considerable and the sales outlook of tea is set to be greater than ever in the coming years. Therefore, it seems there is a real potential to enter and grab the opportunities in the Brazilian tea market.

However, there are also a number of constraints that Unilever would need to define and decide, as a company, in order to conquer the market. Overcoming these obstacles is a must to succeed in Brazil.

[...] Both companies compete in the same tea categories and use similar strategies to position their fruit/herbal tea, green tea and other tea products Key success factors to enter the Brazilian market Resulting from those opportunities and threats, we have ended up with three key success factors that Unilever would have to follow, in order to succeed in the tea segment of the Brazilian market. Unilever needs to target the mass-market consumers, play on the healthy aspects, fits into the Brazilians drinking culture and be adapted to regional markets Target the mass market consumers For years, major food retailers in Brazil have focused on serving the country's wealthiest consumers, but this strategy is not worthy anymore. [...]

[...] However, Unilever should take advantages of the Brazilian evolving consumption culture by using its strong knowledge of tea and its financial capacities to promote its own new products. In order to succeed, the company has to respect four key success factors: - Target the mass consumers market, which has a small purchasing power but represents a larger section of the consumers, as well as the emerging middle class, increasing and asking for premium brands, exotic products and convenience. - Play on the health benefits as well as the traditional and medicinal properties provided by tea, largely understood by Brazilians, especially because this is the main difference with coffee. [...]

[...] However, although the health message is an advantage for tea over drinks, with more caffeine and sugar it is probably not enough to compel consumers to switch from what they are already drinking Fit into the Brazilian drinking culture On a big picture, tea is often popularized not only on its health benefits, but also as part of a mid-afternoon tea break that becomes a part of the drinking culture. In most developed countries and as shown in the figure below, people often drink tea or coffee for breakfast to get a boost for the day as well as during their morning break. [...]

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