Lagging hot tea sales in Indonesia prompt Unilever to sell its tea brand, SariWangi. Photo credit: SariWangi
Unilever recently announced the divestiture of yet another tea subsidiary. On January 6, Unilever Indonesia agreed to transfer the tea brand SariWangi to Savoria Kreasi Rasa for Rp1.5 trillion ($89.45 million). Once the world’s largest international tea business, Unilever now only operates tea brands in India and Nepal, along with its interests in Pepsi-Lipton ready-to-drink operations.
Indonesia’s Beloved Tea Brand
Founded in 1973 and acquired by Unilever in 1989, SariWangi pioneered the tea bag format in Indonesia. SariWangi’s commitment to high quality and innovation ensures good brand recognition, lasting customer loyalty, and a strong market share. However, despite being a leading local tea brand, the company contributes only a modest (3.1%) of net profit to Unilever Indonesia, an estimated 2.7% of its total revenue.
Unilever president director Benjie Yap said in a statement published on January 7, “We believe this transaction will strengthen SariWangi’s business position for its next phase of growth. This move also sharpens Unilever Indonesia’s focus on key segments with higher growth potential and reaffirms our commitment to creating sustainable value for shareholders.”
Savoria Kreasi Rasa, a subsidiary of the fast-moving consumer goods (FMCC) company Savoria Group, is eager to acquire a legacy brand with strong cultural ties to Indonesia. As a locally owned company, Savoria Kreasi Rasa is strongly positioned to guide SariWangi’s next growth phase.
Indonesia’s Competitive FMCC Market
Rising price sensitivity and consumer preference for local and more regional players have made Indonesia’s FMCC market extremely competitive. The increase in raw material prices, global supply and logistics issues, and consumer boycotts over the conflict in Gaza have put Unilever under significant pressure to deliver more favorable returns to its investors.
As a result, Unilever claims the sale is part of efforts to optimize its portfolio and focus on fewer, larger-scale categories and sustainable growth opportunities to support long-term value creation.
In 2024, Unilever Indonesia reported an 18% year-on-year (YOY) decline in sales (a 6.1% YOY decline in its food and refreshment businesses), resulting in net profit dropping 62% to Rp 543 billion, citing price volatility and consumer cutbacks, leading to a broader restructuring in Indonesia. However, the company bounced back in 2025, posting strong Q3 results, with net sales of Rp 9.4 trillion, up 12.4% YOY.
Despite higher overall company profits in 2025, hot tea sales in Indonesia remain stagnant. According to Global Data, Indonesian hot tea volumes from January to September 2025 rose just 0.4% to 6.14 billion litres, while third-quarter volumes (July-September last year) actually declined 0.5% YOY to 2.05 billion litres.
From Global Dominance to Divisititre
Stagnant hot tea volumes in Indonesia reflect a worldwide long-term decline in commodity tea sales, as more consumers shift to coffee, specialty loose-leaf teas, and iced beverages. This alarming trend prompted Unilever to sell its global tea business, Ekaterra, to CVC Capital Partners in 2022, for $5.26 billion.
Unilever acquired its first tea business, US tea manufacturer Thomas J. Lipton Company, in 1938. The company further expanded its tea interests by purchasing Lipton International in 1971 and the British company Brooke Bond, owner of the popular PG Tips brand, in 1984, making Unilever the largest tea business in the world and one of the most dominant players in the global tea market until 2022. However, Unilever still retains its high-performing tea brands in India and Nepal.