Britain’s storied tea brand Typhoo Tea, known for its rich legacy dating back to 1903, has been pulled from the brink of bankruptcy by the Manchester-based manufacturer Supreme. This acquisition, finalized for £10.2 million (approximately $12.9 million), marks a significant turnaround for the company, which entered administration last month due to dwindling sales and insurmountable debt.
Supreme is well-known as the maker of vapes and drinks but is now stepping onto the tea scene. Typhoo, which famously became the UK’s first pre-packaged tea brand, faced substantial losses, reporting £4.6 million (around $5.8 million) for the year ending September 30, and overall revenues of £20 million ($25.3 million) — down from £25.3 million ($32 million) the previous year.
The historic tea brand's downturn can be linked to various factors, including significant changes in consumer preferences. A growing inclination among younger demographics toward coffee and energy drinks has contributed significantly to tea's declining popularity. Recent surveys suggest coffee has surpassed tea as Britain’s favorite hot beverage, with 63% of people regularly choosing coffee compared to only 59% for tea, according to research from Statista.
This acquisition is particularly noteworthy as it aligns with Supreme’s broader strategy to diversify its brand portfolio. CEO Sandy Chadha remarked, “The acquisition of Typhoo Tea marks a significant step to broaden our reach and embrace one of the most iconic consumer brands within the UK.” This strategic shift follows their recent purchase of soft drink company Clearly Drinks and is coming just as regulatory scrutiny over vaping products is increasing.
Typhoo's struggles were exacerbated by severe operational issues, including disruptions from theft and vandalism. Last August, their Wirral factory was broken-into and occupied by intruders for days, inflicting heavy damage and eventually leading to the closure of the location. Such incidents added millions to their mounting costs, culminating in write-downs close to £24 million, including £7 million on property impairments alone.
Despite these setbacks, the future appears cautiously optimistic under Supreme's management, which plans to implement a “capital-light, outsourced manufacturing model” to revive Typhoo’s fortunes. This approach aims to improve profitability and streamline operations compared to the previous structure. Supreme anticipates the brand will benefit from its extensive retail reach, leveraging existing supply chains with major supermarkets and discount stores across the UK.
The acquisition of Typhoo Tea also signifies more than just financial recovery; it's about preserving the brand itself. For over 120 years, Typhoo has served as not just another beverage option, but as a cultural staple deeply woven within the fabric of British tea-drinking tradition. By adopting Supreme’s tools and market strategies, Typhoo may rise from its ashes stronger, potentially attracting both old loyal consumers and new ones.
This kind of revitalization isn’t just good for Typhoo; it’s also beneficial for consumers who want to see their favorite brands persist through changing market tides. With Supreme now at the helm, the re-envisioning of Typhoo Tea could herald new product offerings and marketing strategies aligned with contemporary tastes and consumption patterns.
