Tea break? British shoppers turn their noses up at the traditional cuppa

As shoppers turn to coffee or kombucha, brands such as PG Tips are being sold off. But some firms think tea’s time is far from over

Last modified on Fri 19 Nov 2021 12.50 EST

It looks like time could be up for the traditional British cup of tea, with thirsty consumers increasingly opting for coffee, fancy herbal infusions and even kombucha as a pick-me-up.

The latest blow to the national drink is Unilever’s decision this week to sell its famous black tea brands, which include Brooke Bond, PG Tips and Lipton, to a private equity firm.

The country’s switch away from tea and towards coffee is writ large in supermarket sales. In the year to June, coffee sales were more than double those of tea, rising 10% to £1.5bn, according to retail analysts Kantar, as home workers bought pods and beans to play barista.

Tea sales rose 5% to £713m, but that was mainly thanks to increased demand for expensive herbal and fruit infusions promising everything from a good night’s sleep to putting a spring in your step. The volume of everyday teabags sold was unchanged.

The hot cuppa is also facing growing competition from colder varieties of infusion. Unilever remains invested in a joint venture with PepsiCo selling iced teas, and kombucha, made from fermented tea, has become fashionable, with analysts predicting sales could rocket to £250m within five years.

When Alan Jope, the chief executive of Unilever, set out his reasons for selling up last year he pointed to falling demand for so-called “builder’s tea”. Its drinkers were “getting older and consuming less and starting to fall over”, he said. Unlike younger consumers they were also not into “trying new products”, making it harder to see where growth would come from.

It is a sharp contrast from when the consumer goods giant bought Lipton and PG Tips, in the early 70s and 80s, respectively, when there was no sign of the coffee culture that would displace teapots on high streets and in kitchens.

The tea-break had been a British institution for at least two centuries, with the drink’s history going back further to the first advert for tea, which appeared in the London republican newspaper Mercurius Politicus in 1658. It announced that a “China drink called by the Chinese, Tcha, by other Nations Tay alias Tee” was now available in a coffee house.

By the mid-18th century, it was the UK’s most popular drink – pushing ale and gin from their place in British hearts. The teabag arrived at the start of the 20th century and today 96% of cuppas are made with one.

However, not everyone thinks tea has gone off the boil, not least CVC Capital Partners, the private equity firm paying €4.5bn (£3.8bn) for Unilever’s tea division, renamed Ekaterra. It thinks it can engineer a turnaround, describing the brands as “well positioned in an attractive market” with sales of €2bn last year.

Other tea companies also see opportunities, with drinkers willing to spend more on brands with strong sustainability credentials. Companies such as Clipper – which claimed a first with its “biodegradable, unbleached, and non-GM teabag” – are among the names doing well.

Yorkshire Tea has also managed to defy gravity, despite its reliance on the struggling black tea market. Dom Dwight, its marketing director, says there is “loads of life left in tea, provided you go about it with the right attitude”.

“We won’t stop championing the brilliance of standard black tea – while it’s in decline, we’re the only major brand in long-term growth, which goes to show that there’s a lot of love out there for a proper brew,” he said.

“Millions of us Brits continue to make it a part of our day, and the future lies in bringing black tea to more places and more people – finding clever ways to meet the changing needs of the modern tea drinker.”

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