Establishing a standalone business
When tea producer Lipton spun off from Unilever in 2021, it had just two years before its transitional service agreements expired in 2023. As a £2bn turnover business, operating in more than 100 different countries, all of its operations were integrated with Unilever, so separation from its parent company was complex. It would need new capabilities built and, often, staffing, and a seamless transition to standalone business operations.
What’s more, although the market for tea is growing, so too is public scrutiny of its ethics, history and colonial associations. For Lipton to successfully demonstrate its own brand integrity, its new capabilities would also have to enshrine the values of local tea producers and resonate with Lipton’s customers, rather than being driven purely by a top-down business ethos.
PwC was appointed in March 2021 to build Lipton’s new capabilities from scratch. The firm’s solution was rooted in four key strategic objectives. Commercially, it would provide the solid foundation for a long-term and sustainable business, while separating from Unilever without affecting continuity. To create a leaner organisation, it would simplify, standardise, automate and – where appropriate – outsource. With separation’s opportunity for brand re-positioning, the solution would support a consumer-led growth strategy, by enabling agile ways of working and more responsive customer engagement. Lastly, but crucially, the new ways of working would be a manifestation of Lipton’s new culture and values, and promote a ‘one team’ ethos.
Achieving separation – even at this scale and pace – isn’t a new challenge. However, doing it in a way that also enshrined and reinforced Lipton’s culture and values needed some new thinking. While PwC’s initial focus was to define a target operating model, the firm agreed a bottom-up approach, to articulate the vision, capabilities, process, solutions, roles and requirements in a way that recognised the importance of Lipton’s workers and customers from the outset.
That bottom-up approach meant a lot of feet on the ground, and the programme team encompassed over 200 people across Lipton and PwC, including remote and offshore teams, across four continents. Together, the team designed, built and deployed the new operating model for more than a hundred countries, to achieve full, standalone independence.
Although the programme’s main scope comprised core business functions such as Marketing, Sales, HR, Finance, Tax and Supply Chain, PwC also addressed critical cross-functional areas, including end-to-end order to cash, forecasting, sales and operations planning, data, and innovation processes. Alongside the programme, the consulting team also supported Lipton to keep up momentum, and adapt roles and responsibilities as needed, to balance the demands of building new capabilities and achieving separation, and to understand their costs, risks and TSA impact.
PwC ensured the project’s success by recognising the integrity of its interwoven commercial, technical and cultural demands, and delivered a solution that supported the client’s transition from a multi-category parent to a single-category business. The two parties worked together closely to build streamlined and scalable standalone operations that are now fully connected – not only internally, but also with customers, suppliers and values.
