The deal, which also hands the Dutch-British company Tazo's signature recipes, intellectual property and inventory, leaves Starbucks Corp. with its Teavana tea brand. The brand pulled in $112.5 million in revenue over the a year ago and UL believes that there is room for more growth. It was sold mostly at supermarkets, bib-box, and convenience stores, its product lines include packaged teas, K-Cup pods, and ready-to-drink bottles.
Starbucks paid United States $8.1 million for Tazo in 1999, five years after it was founded.
"With its strong appeal to millennials, Tazo is a ideal strategic fit for our US portfolio that includes exciting new brands such as Seventh Generation, Dollar Shave Club and Sir Kensington's", said Kees Kruythoff, president, Unilever North America.
Starbucks said it is selling Tazo to Unilever for $384 million in order to focus more on developing its Teavana tea brand.
The transaction is expected to close in the fourth quarter, pending regulatory approval, the companies said.
Starbucks has removed its e-commerce platform as part of the streamlining, instead, will set its attention to mobile order improvements, innovation in food and beverage, investments in its own roasteries, and gaining share of at-home coffee. He added that the company reset its long-term guidance to "represent performance we can meet or beat in the years ahead". The company fell short of analysts' predictions, reporting revenues of $5.7 billion compared to $5.8 billion projected.
On the company's quarterly call, Starbucks said it would launch a co-branded Chase Visa credit card this winter.
Starbucks adjusted earnings per share were 55 cents which were in line with analysts' expectations.
The Seattle-based coffee giant made the announcement moments before it released its fourth-quarter earnings Thursday.
USA same-store sales increased 2 percent, including a 1-percent increase in the number of customers. The tea category in Starbucks stores continues to grow double-digits globally, with Starbucks well on its way to building the Teavana business to over $3B over the next five years.