Can Gen Z keep the tea? How Brits are growing a love of a classic cuppa amid a relationship crisis

Soon after, Twinings—another premium brand, owned by Associated British Foods—reported its highest ever after-tax profit of £77 million ($97.8 million).

So far, you might say, no wonder. Everyone knows that the Brits love their tea, which George Orwell once described as “one of the main things of civilization” in the country.

But look closely, and you’ll see that this is no ordinary service.

Tea is certainly popular—the UK drinks around 36 billion cups a year, and half of the population consumes it every day—but consumption has fallen sharply, especially for black tea, whose value has been falling by 2-3% a year for decades, as the bitter smell barista-style coffee is increasingly being heard on Britain’s high streets.

So does the recent surge in big sales mean it’s tea time again?

The coffee shop conundrum

When ‘maker’s tea’—black, served in tea bags, usually served with milk, often sweetened—returns, it doesn’t show up in the data.

According to Kiti Soininen, Divisional Director, UK Food & Drink Research at market research firm Mintel, “the average tea bag segment has resumed its long-term volume decline” after a short period during the pandemic.

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This should come as no surprise, considering where the market started.

“If you go back to the 1970s, the only hot drink we had was tea. We drank the odd instant coffee, but we were a nation of tea drinkers,” said Ben Newbury, head of marketing for Yorkshire Tea at Betty’s and Taylor’s. As the variety and quality of other beverages increased, led but not limited to coffee, the only way was down.

But Newbury believes that this inevitable result of authorization has been compounded by a sense of apathy and defeat in the field. “Most other producers and brands just stop talking about tea and its benefits,” he says.

Yorkshire Tea is unusual in that it has enjoyed recent growth in both value (revenue) and volume (number of tea bags sold) targets of 21% and 12%, respectively, by 2023.

It has done this by increasing the market share of black tea, which Newbury is in line with its leading position in the mass market. In the cost of living crisis, it turns out, Brits find cutting back on £5 ($6.35) skinny lattes more palatable than splashing a few cents on a bag of tea.

Most of the others reporting strong results did so despite declining volumes, with sales growing directly at higher rates due to inflation.

Yorkshire isn’t the only brand that has seen the benefits of being premium, Soininen said, pointing to Tata-owned Tetley launching Golden Brew, and Lipton—the world’s largest tea company, spun off from Unilever in 2022 with more than 30 brands—relaunching its biggest UK market is PG Tips last year with a high emphasis on quality.

“Tea has been unpopular in the UK, due to a lack of category leadership,” said Gareth Mead, chief communications and sustainability officer at Lipton. He points out that the new advertising campaign for PG Tips – featuring British rapper and actress Ashley Walters, and directed by Sir Steve McQueen, of Twelve Years a Slave fame—it was its first new campaign in nearly eight years.

“If you want consumers to drink more tea, let’s give them a reason to buy the product… our approach has been to reinvest in PG Tips,” said Mead, who added that first-quarter volumes were up for the first time in years. “There is a huge opportunity to rekindle Britain’s love of tea.”

Given the long-term decline in daily tea consumption, that’s a bold statement. But Lipton, like Yorkshire and the wider sector, sees potential for new markets in perhaps surprising places.

It’s Gen Z’s tea time

London has never had a cafe culture, not in the way of Paris or Vienna. Traditional silver tea rooms have long been served by cookie-cutter coffee shops on the streets of the city, serving only as afternoon tea, which often takes place out of sight in luxury hotels.

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But in the past decade, Taiwanese imports have brought the community’s tea culture back to life—though Orwell would no doubt have seen it coming.

If you walk down Shaftesbury Avenue in London’s West End, from Piccadilly Circus to New Oxford Street, you will pass by what I count at least 10 bubble tea shops, selling iced teas shaken in plastic cups, often in surprising colors, and various gels. , popping boba and tapioca pearls. Popular flavors include lychee, taro and winter melon; Darjeeling and Lady Grey, not so much.

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The clientele, often queuing outside in Soho backstreets, is overcrowded with teenagers and 20s, and they can’t get enough.

Newbury is under no illusions that young Britons will ever take over the tea habits of their parents or grandparents—a YouGov survey found a quarter of over-60s drink more than 20 cups a week, compared to just 6% of those aged 16-24—but sees bubble tea as a sign of how Gen Z can be drawn to new tea drinking experiences.

“It’s interesting, the new generation is getting into tea. It feels very similar to coffee shop culture. It’s about theater and personal treatment, like having a frappe or flavored coffee,” he says.

Neither Yorkshire nor Lipton are directly associated with bubble, or boba, tea—now estimated to be a $2.6 billion global market, growing at more than 7% annually—but both have embraced ways of drinking tea that were unthinkable a few decades ago. past.

Mead points to Lipton Cold Infuse (a tea designed to be brewed cold as opposed to iced tea: Lipton Ice Tea is a completely separate entity, which is now a joint venture between Unilever and Pepsico) and its Tazo brand of tea, which it has seen exclusively. growth in France and the United States respectively.

“There was an image problem. If you try Googling Gen Z and tea, you will struggle. You will see relatively old people looking away. It’s a personal moment of happiness, beautiful, but very different from the hard-hitting, front-of-the-mind power of coffee,” explains Mead.

Besides variety, vibe and youth, he adds, the opportunity for tea among Gen Z comes from its alignment with two megatrends: health (tea has many proven health benefits, including high levels of polyphenols and flavonoids, which benefit the heart) and sustainability (tea it involves very little processing and is very light, so it has a small footprint compared to the environment).

He says: “Gen Z are still not regular tea drinkers, but they care about those things more than any other generation. “It’s something we should be very excited about as an industry. It is our mission as the world’s largest tea company to help people rediscover tea, in whatever way suits their needs. There’s no reason why it can’t be better than coffee.”

Diversity and internationalization

Teas advertised for their health benefits have become the top performers in the category in recent years, according to Mintel’s Soininen, with 19% of new launches in the UK having some sort of ‘functional’ claim, many related to reducing stress or improving sleep.

Lipton’s Pukka brand, which specializes in herbal teas, has spread from the UK to the rest of the world, with Yorkshire recently launching herbal decaf, and Yorkshire Tea Kombucha.

Beyond reaching Gen Z, it’s part of a broader trend toward product differentiation, as businesses create tea products or brands to meet different needs—whether for different groups, needs or times of day.

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

Reflecting this need to hit multiple bases, Yorkshire is part of a group that includes specialty tea business Taylors of Harrogate, as well as Taylor’s Coffee and Betty’s Tea Rooms. Lipton’s portfolio, on the other hand, includes its eponymous brand (sold in over 150 countries) and PG Tips, Pukka, Tazo teas with fruits and spices, and the T2 blend of premium teas with fine tea-ware , aimed at luxury gifting. the market.

Another strategy is to diversify outside of Britain. After all, unlike the UK the global domestic tea market—worth $127 billion by 2024, according to Statista—is growing, with a compound annual growth rate of 6%.

Lipton did this a long time ago. Now based in the Netherlands, its Glasgow-based flagship brand is no longer sold in the UK but the family-run Yorkshire is also focusing on sales in growth markets abroad. “They’re making lattes with Yorkshire Gold in some parts of China,” notes Newbury.

British tea culture still has cachet around the world, and still means something at home. What will it be, i the afternoon drink, and the foundation of civilization? It’s impossible. Orwell’s time has passed, for better or for worse.

But can it survive and start growing again? Yes. Like anything else, it evolves, and it’s the businesses that recognize this and evolve with it that will ultimately succeed.