Unilever and PepsiCo Create 'Pepsi Lipton International' RtD Tea Joint Venture in Selected International Markets

LONDON--()--Oct. 14, 2003--

--  New JV Combines Lipton Brand Equities with Pepsi Bottling Sales &
    Distribution Strengths
--  Meets Unilever "Path to Growth' Strategy, targeting "white space"
    markets
--  Augments Pepsi Portfolio of Healthy Refreshment Beverages
--  Builds Upon Successful North American Tea Partnership

Unilever and PepsiCo have created a joint venture to expand significantly the marketing and distribution in selected markets of Unilever's range of Lipton ready-to-drink (RTD) tea - strengthening Lipton's lead position within the fast-growing $23bn (EUR23bn) global RTD tea market.

The creation of the 50-50 JV - "Pepsi Lipton International" - is in line with Unilever's Path to Growth strategy in its focus on a leading brand, its move into new channels and its drive into new markets for sustained future growth. It will enable Lipton to accelerate its growth, building on its current leading share of the 16 billion litre global RTD tea market.

The JV will target the "white space" markets where Lipton has no current presence and it is anticipated that significant business opportunities will come from the key high-potential markets where Pepsi is already strong. A large number of markets with existing Lipton RTD tea business will also be targeted in coming months - Brazil, Spain, Greece, Poland, Czech Republic, Slovakia, Hungary, Albania, Romania, Thailand, Singapore, Vietnam, Australia, Turkey, Egypt, Saudi and the 6 Gulf States.

Pepsi Lipton International is seen as a logical expansion of an earlier joint venture - the Pepsi Lipton Tea Partnership - set-up by the two companies for the North American market some 10 years ago and firmly established as the leading RTD tea player in both the United States and Canada.

The joint venture will leverage the strengths of both parents to create significant value. It will principally sell RTD tea concentrate to franchise bottlers, thus augmenting Pepsi's portfolio of healthy refreshment beverages.

As the world's largest tea producer, Unilever will bring the brand, world-class knowledge of tea and its research and development capability to the JV; Pepsi will contribute access to its extensive bottling and distribution network with strong customer relations.

Pepsi Lipton International will be headed by a general manager reporting to a board of directors drawn equally from Unilever Bestfoods and Pepsi.

Lipton is one of Unilever's largest foods brands with sales to the trade well in excess of EUR2.8 billion and is the world's third largest beverage brand as measured by volume. Patrick Cescau, director of Unilever Foods Division, said: "We have a strong presence in the developing and emerging markets yet there is plenty of "white space" to move into. These markets are the next in our planned rollout and we see Pepsi as the best partner to help us achieve this. This new joint venture marks a truly significant step in the expansion of the brand, bringing it within the reach of many millions of new consumers."

Said Peter Thompson, president and CEO of PepsiCo Beverages International (PBI): " We are creating a common vision and tremendous synergies together. This new alliance will enable Lipton to strengthen its global position. At the same time, we are rounding out our portfolio with a strategic partnership in one of the fastest growing beverage segments and providing consumers with Lipton, the world leader in tea."

Unilever is one of the world's largest consumer products companies with annual sales in excess of EUR48 billion. It produces and markets a wide range of foods and home and personal care products, its internationally known brands including Lipton, Knorr, Hellmanns, Dove, Axe and Surf. It operates in 150 countries and employs some 247,000 people worldwide.

PepsiCo is one the world's largest food and beverage companies, with annual revenues of $27 billion. Its principle businesses include Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. PepsiCo's portfolio includes 15 brands that each generate $1 billion or more in annual retail sales.

SEE ALSO SEPARATE PEPSI ANNOUNCEMENT

Contacts

Unilever PLC
Mike Haines, +44-20-7822-6805
mike.haines@unilever.com
or
PepsiCo
Larry Jabbonsky, 914-253-2647
larry.jabbonsky@pepsi.com

Contacts

Unilever PLC
Mike Haines, +44-20-7822-6805
mike.haines@unilever.com
or
PepsiCo
Larry Jabbonsky, 914-253-2647
larry.jabbonsky@pepsi.com