In a development that may have an impact on its Indian arm, Anglo-Dutch giant Unilever Plc on Thursday said it will conduct a strategic review of its global tea business.

“We are announcing a strategic review of our global tea business, as we continue to evolve our portfolio to higher growth spaces,” Unilever said as it announced its results for the full year 2019.

The multinational pointed out that it has held a long-established position as the biggest tea player in the world with brands such as Lipton, Brooke Bond and PG Tips, while expanding into the premium, fruit and herbal markets in recent years.

However, sales of traditional black tea, which is the largest segment in the category, have been declining in developed markets for several years because of changing consumer preferences.

Unilever has been focusing on the growing segments of premium black tea, black tea in emerging markets and fruit and herbal variants, even as its premium herbal brand Pukka performed well.

According to the company, the strategic review will consider all “options” for its tea business and is expected to conclude by mid-year.

“We are continuing to evaluate our portfolio and have initiated a strategic review of our global tea business,’’ CEO Alan Jope said.

Though it is early days as yet, the announcement could have implications on Hindustan Unilever Ltd (HUL) which markets brands such as Lipton, Brooke Bond and Taj Mahal. During the second quarter, HUL reported an underlying volume growth of 5 per cent. Its food and refreshment business saw a broad-based growth across categories, with beverages putting in a good performance.

Annual numbers

On its performance during the year, Unilever said there has been a significant slowdown during 2019 in South Asia and it saw some softening in China.

“While parts of Latin America have been volatile, we have seen signs of improvement in Brazil. The Southeast Asian markets maintained good growth while developed markets, particularly Europe, remained challenging,” Unilever added.

The company reported underlying sales growth of 2.9 per cent for the year which it said was balanced between price and volume. It was also marked by good margins and a strong free cash flow.

HUL will report its quarterly earnings for the period ended December 31, 2019 on Friday.