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. [...]
[...] Consequently, we believe it may be time for Unilever to enter the Brazilian market in tea respecting the following four key success factors: target the mass consumers market as well as the emerging middle class, play on the health benefits as well as the traditional and medicinal properties provided by tea, fit into the Brazilian drinking culture and be well adapted to the different and various local cultures. To reach its first target, the mass-market consumers, Unilever needs to create a local brand positioned as traditional, affordable and healthy. [...]
[...] Brazil being an emerging country, highly unequal and still rather poor and the main tea sales and growth are in green and fruits/herbal, it seems there is a real opportunity for Unilever to enter the Brazilian tea market. However, as Brazil's regional particularities need to be respected, Unilever should adapt its positioning and its targets to them. First of all, the company should not target all consumers in Brazil because it seems that some consumers are not ready yet to drink tea, like on the coastal cities where cold RTD drinks are much more popular. [...]
[...] Unilever's tea brands are the following: Ati, Beseda (Ukraine), Blue Teapot, Brooke Bond (India), Brooke Bond D (India), Bushells (Australia), Carøe, Choysa, Club, Emblem, Glen (South Africa), Hierbas, Silvestre, Home Cup, Jinghua, Joko (South Africa), Li-Cungo, Lintea, Lipton (international), Lyons (Ireland), Mc Collins Anis, McColin's, Medova, PG Tips (United Kingdom), Pitco, Rickshaw, Saga (Poland), Sariwangi (Indonesia). For example, its Red Label, Taj Mahal, Taaza and 3 Roses brands now come under its Brooke Bond brand in India. Source: Euromonitor International. [...]
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