Lipton Teas and Infusions CEO Nathalie Roos has resigned after two years of leading the world’s largest tea brand by value. In a release announcing her decision, the company cited “personal reasons, in agreement with the board.”
A week after the announcement, S&P Global Ratings downgraded Lipton's parent company, CVC Capital Partners, citing high debt and poor performance at Lipton, one of the investment company’s significant holdings.
Bloomberg News wrote that S&P “flagged weaker-than-anticipated performance from the tea manufacturer.”
“Lipton will continue to post negative free operating cash flow through 2025 due to a combination of factors, including delisting certain products, rising overhead costs, and increased competition. The company is also facing a “substantial” cash burden of over €300 million ($335 million) a year for interest payments and capital investments," S&P said in a note on Sept. 17.
“Under our base case, key credit metrics for 2024 are thus significantly weaker than our previous expectations,” analysts, including Celine Huang, said in the note, which cut Cuppa Bidco BV (Lipton) from B- to CCC+. The share value of CVC stock declined 7.69% on the news.
In a LinkedIn post, Roos said she had “decided to turn a new page.”
Roos wrote, “It is with great emotion that I sincerely thank my leadership team and all the teams at Lipton Teas and Infusions worldwide for their unwavering commitment and trust. Together, with the support of our shareholders, we embarked on an incredible journey to transform the tea industry with remarkable energy.”
Roos was named CEO in July 2022, shortly after Lipton was acquired by CVC Capital Partners. During her tenure, the company launched several brand extensions, culled SKUs, and discarded underperforming labels.
The most significant strategic change was the sale of the company’s tea holdings in Kenya, Rwanda, and Tanzania to Browns Investments. Browns’ holdings include a Sri Lanka-based plantation company that has expanded its local holdings from 49 tea gardens to become the largest black tea supplier in the world. Roos structured the deal as a partnership contingent on Browns’ ability to improve quality and sustainability.
Roos writes, “Drawing inspiration from Gen-Z as the compass for all our decisions allowed us to move faster and further. This new generation does not settle for vague promises. They expect immediate action driven by sincerity and the building of solid alliances.”
“Thanks to this approach, we have created a legacy that will sustainably and positively impact the lives of 13 million people who depend on tea worldwide,” she wrote.
Lipton, founded in 1890 in the UK, is headquartered in Amsterdam. Its annual turnover is estimated at $1 billion from sales in more than 100 countries. The company’s 36 tea brands include the well-known Yellow Label, Brooke Bond Red Label, PG Tips, Red Rose, TAZO, Laojee, Pukka Herbs, and T2 brands. The company employs 17,000 worldwide.
Pierre Laubies, executive chair, will serve as interim CEO until a permanent replacement is named.