Supreme, the consumer goods company known primarily for its vaping products, has taken a significant step by acquiring the iconic British tea brand Typhoo out of administration for £10.2 million. This acquisition marks the end of uncertainty for the 121-year-old tea producer, which had urgently appointed administrators after facing severe financial struggles, including substantial losses in prior years.
The deal, announced on December 2, 2024, is seen as pivotal not only for Typhoo but also for Supreme’s diversification strategy. With revenues reported at about £20 million for Typhoo and losses up to approximately £4.6 million before tax over the past year, the tea brand was at significant risk of being lost to history. Typhoo had previously recorded losses of nearly £38 million the year before, highlighting its dire situation.
Supreme’s acquisition brings not only financial relief but also the promise of revitalization under new ownership. The deal includes Typhoo’s complete stock as well as trade debtors valued at around £7.5 million, ensuring the brand’s continuation within the competitive beverage market both nationally and internationally.
Founded back in 1903, Typhoo was the UK’s first pre-packaged tea brand, having expanded its offerings over the years to include teas and coffees catering to various tastes. The brand makes regular appearances on the shelves of major UK supermarkets, as well as supplying to international markets including North America and Asia, along with contracts with notable entities like the Ministry of Defence and the NHS.
Supreme CEO Sandy Chadha expressed optimism about the acquisition, stating, “Typhoo is such an iconic brand, and with Supreme’s distribution network and resources, we have the scope to grow and develop it.” He emphasized how the brand fits seamlessly with Supreme’s newly formed soft drink division, projecting exciting opportunities for product innovation and cross-selling moving forward.
Chadha believes Typhoo Tea will flourish under Supreme ownership thanks to the company’s extensive market reach and expertise at fostering brand loyalty. The acquisition not only secures the legacy of Typhoo but also promises to create tangible avenues for growth at both local and international levels.
Following the deal, the management strategy will focus on operating Typhoo within a ‘capital light’ framework, using outsourced manufacturing. This approach is aimed at improving the profit margins, which are anticipated to reach around 30% as the brand capitalizes on efficiencies throughout the supply chain.
The rapid action taken by Supreme and its keenness to secure the deal soon after Typhoo's appointment of administrators shows the company's commitment to ensuring the continuation of significant UK consumer brands. With this move, Supreme successfully broadens its portfolio beyond its original focus on vaping products and aligns itself more closely with the beverage sector, enhancing its footprint.
This acquisition forms part of Supreme’s broader diversification strategy, alongside the purchase of Clearly Drinks earlier this year, underlining their ambitions to expand their presence within the wider marketplace.
Reflecting on Typhoo’s historical significance and future potential, observers are hopeful for the brand's revival under the stewardship of Supreme. With England’s tea culture deeply ingrained—even many who may not be avid tea drinkers still appreciate the occasional cup—there lies significant opportunity for growth and rekindling customer loyalty for Typhoo. The brand's story may have taken a precarious turn, but this new chapter promises to embrace the heritage of Typhoo all the same.
Brand loyalty, coupled with Supreme's strategic plans, could very well see Typhoo Tea not just surviving but thriving. The reaction from consumers and the market will be closely watched as the team at Supreme works to re-establish Typhoo not only as a household name but also as a beacon of British tea culture.
