Can Gen Z save tea?

Shortly afterwards, Twinings—one other high model, owned by Related British Meals—reported its highest ever after-tax earnings of £77 million ($97.8 million).

Thus far, you may say, so unsurprising. Everybody is aware of the Brits love their tea, which George Orwell as soon as described as “one the mainstays of civilization” within the nation.

However take a better look, and also you’ll see this isn’t fairly service as ordinary.

Tea is certainly widespread—the U.Okay. quaffs about 36 billion cups in a 12 months, with half the inhabitants partaking day by day—however consumption has fallen precipitously, notably for black tea, volumes of which have been dropping 2-3% yearly for many years, because the bitter aroma of barista-style espresso wafts more and more although Britain’s excessive streets.

So does the latest spate of bumper gross sales imply the time for tea has come once more?

The espresso store conundrum

If ‘builder’s tea’—black, distributed in tea luggage, normally served with milk, typically with sugar—is making a comeback, it’s not exhibiting within the knowledge.

In keeping with Kiti Soininen, Class Director, UK Meals & Drink Analysis at market analysis agency Mintel, “the ordinary tea bag segment has resumed its long-term volume decline” after a quick hiatus in the course of the pandemic.

This shouldn’t be a shock, in the event you think about the place the market began.

“If you go back to the 1970s, pretty much the only hot drink we had was tea. We had the odd instant coffee, but we were a tea-drinking nation,” says Ben Newbury, head of name advertising for Yorkshire Tea at Betty’s and Taylor’s. As the variability and high quality of different drinks elevated, led by however not restricted to espresso, the one method was down. 

However Newbury believes that this inevitable incumbency impact has been compounded by a way of apathy and defeatism within the sector. “A lot of other manufacturers and brands just stopped talking about tea and its benefits,” he says.

Yorkshire Tea is actually uncommon in having loved latest development in each worth (income) and quantity (the variety of tea luggage bought) phrases of 21% and 12%, respectively, in 2023. 

It did this by rising market share in black tea, which Newbury attributes to its premium positioning throughout the mass market. In a value of residing disaster, it seems, Brits discovered reducing again on £5 ($6.35) skinny lattes extra palatable than skimping a couple of pennies on a tea bag.

Most others reporting robust outcomes did so regardless of dwindling volumes, with gross sales rising immediately on greater costs resulting from price inflation.

Yorkshire isn’t the one model to have realized the benefits of being premium, says Soininen, pointing to Tata-owned Tetley launching its Golden Brew, and Lipton—the world’s largest tea firm, spun out from Unilever in 2022 with over 30 manufacturers—relaunching its mass market U.Okay. model PG Ideas final 12 months with the next emphasis on high quality.

“Tea has been a bit unloved in the U.K., because of a lack of category leadership,” says Gareth Mead, Lipton’s chief company communications and sustainability officer. He factors out that PG Ideas’ new promoting marketing campaign—that includes British rapper and actor Ashley Walters, and directed by Sir Steve McQueen, of 12 Years A Slave fame—was its first new marketing campaign in almost eight years.

“If you want consumers to drink more tea, let’s give a reason to buy the product… our approach has been to reinvest in PG Tips,” says Mead, who provides that first quarter volumes rose for the primary time in years. “There is a huge opportunity to revitalize Britain’s love for tea.”

Given the long-term decline in on a regular basis tea consuming, that’s a daring assertion. However Lipton, like Yorkshire and the broader trade, sees potential for brand new markets in maybe stunning locations.

Tea time for Gen Z

London’s by no means had a café tradition, not within the method of Paris or Vienna. Conventional silver service tea rooms have lengthy since given method to cookie-cutter espresso retailers on the town’s streets, surviving solely as afternoon tea, which generally takes place out of sight in plush lodges.

However during the last decade, a Taiwanese import has introduced public tea tradition again to life—although it’s uncertain Orwell would have acknowledged it as such.

In case you stroll alongside Shaftesbury Avenue in London’s West Finish, from Piccadilly Circus to New Oxford Road, you’ll move by my depend at the very least 10 bubble tea shops, promoting chilly tea shaken over ice in plastic cups, typically startlingly coloured, with assorted jellies, popping bobas and tapioca pearls. Common flavors embrace lychee, taro and winter melon; Darjeeling and Girl Gray, not a lot.

The clientele, typically queuing exterior onto Soho backstreets, is overwhelmingly of their teenagers and 20s, and so they can’t get sufficient of it.

Newbury is underneath no illusions that youthful Britons will ever undertake the tea habits of their mother and father or grandparents—a YouGov ballot discovered 1 / 4 of over 60s drink greater than 20 cups every week, in contrast with solely 6% of 16-24 12 months olds—however he does see bubble tea as emblematic of the way in which Gen Z could be drawn into new tea consuming experiences.

“It’s fascinating, the younger generation coming into tea. It feels very similar to coffee shop culture. It’s really about theater and a personalized treat, similar to having a frappe or flavored coffee,” he says.

Neither Yorkshire nor Lipton interact immediately with bubble, or boba, tea—now estimated to be a $2.6 billion international market, rising at over 7% yearly—however each have embraced methods of consuming tea that will have been unimaginable just a few a long time in the past.

Mead factors to Lipton Chilly Infuse (tea designed to be brewed chilly versus iced tea: Lipton Ice Tea is a completely separate entity, remaining a three way partnership between Unilever and Pepsico) and the tea concentrates of its Tazo model, which have seen explicit development in France and the USA respectively.

“There’s been an image problem. If you try googling Gen Z and tea, you’ll struggle. You’ll see relatively old people looking wistfully into the distance. It’s a personal moment of pleasure, which is great, but very different from the hard-hitting, front-of-mind energy of coffee,” Mead explains.

Past selection, vibe and novelty, he provides, the chance for tea amongst Gen Z comes from its alignment with two megatrends: well being (tea has many confirmed well being advantages, together with excessive ranges of polyphenol and flavonoids, which profit the center) and sustainability (tea includes little or no processing and may be very mild, so has a comparatively small environmental footprint).

“Gen Z aren’t regular tea drinkers yet, but they care about those things more than any other generation,” he says. “It’s something we should be very excited about as an industry. It’s our job as the world’s largest tea company to help people rediscover tea, in whatever form suits their needs. There’s no reason it can’t be cooler than coffee.”

Diversification and internationalization

Teas marketed for his or her well being advantages have been the standout performers within the class lately, in accordance with Mintel’s Soininen, with 19% of latest launches within the U.Okay. having some type of ‘functional’ declare, many associated to decreasing stress or enhancing sleep.

“Tea is the ultimate elixir. It can get you out of bed. It can be there to have a conversation over. Or for some people it’s what they have before they go to sleep.”

Ben Newbury

Lipton’s Pukka model, which makes a speciality of natural teas, has unfold from the U.Okay. world wide, whereas Yorkshire has lately launched a herb-infused decaf, and even a Yorkshire Tea Kombucha.

Past reaching Gen Z, it’s a part of a wider pattern in the direction of product diversification, as companies develop tea merchandise or manufacturers to fulfill divergent niches—whether or not for various teams, wants and even occasions of day.

“Tea is the ultimate elixir. It can get you out of bed. It can be there to have a conversation over. Or for some people it’s what they have before they go to sleep,” says Newbury.

Reflecting this have to hit a number of bases, Yorkshire is a part of a gaggle that features premium specialty tea enterprise Taylors of Harrogate, in addition to Taylor’s espresso and Betty’s tea rooms. Lipton’s portfolio, however, consists of its eponymous model (the bestseller in 150 international locations) in addition to PG Ideas, Pukka, Tazo’s fruity and spicy teas, and T2’s mix of premium tea with fantastic tea-ware, aimed on the luxurious gifting market.

One other technique is to diversify exterior of Britain. In spite of everything, not like within the U.Okay. the worldwide at-home tea market—value $127 billion in 2024, in accordance with Statista—is rising, at a compound annual development fee of 6%.

Lipton did this way back. Now primarily based within the Netherlands, its Glasgow-founded flagship model is now not on the market within the U.Okay. However family-owned Yorkshire can be actively concentrating on gross sales in development markets overseas. “They’re making lattes with Yorkshire Gold in some parts of China,” Newbury remarks.

British tea tradition nonetheless has a cachet world wide, and nonetheless means one thing at dwelling. Will or not it’s what it was, the daytime drink, and a mainstay of a civilization? Unlikely. Orwell’s time has handed, for higher or worse.

However can it survive and begin to develop once more? Sure. Like the rest, it’s evolving, and it’s the companies that acknowledge this and evolve with it that may finally succeed.