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The British way: a cup of black tea served with milk, sugar, and a shortbread biscuit in a bone china cup and saucer.
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The traditional way of tea is in decline for some years now – is it only over-60s who drink tea now.
Note: We solemnly report the passing of Peter Keen, the author of this article. Peter was a tea expert, and prolific writer (50 books in 50 years), professor, and longtime tea correspondent for STiR coffee and tea magazine. This third book on tea – Heroines of Tea – was published in 2018. This is sadly one of the last features Peter wrote for STiR. We will have more information on Peter in the next issue of STiR. He will be sorely missed here at STiR where he is irreplaceable.
For as long as can be remembered, the UK led the world in tea trends, consumption methods, and products. Today, with the decline of black tea consumption, the UK follows – not leads – the trends.
The core of tea in the UK – the United Kingdom of Scotland, Northern Ireland, and Wales as well as England – has been black tea, for three centuries. That’s the fading past. Rather than leading world trends, the UK is now following them. Euromonitor, a leading research firm, reports that in the five years preceding 2019, retail sales volumes of black tea fell by at least 10% in the US, Russia, and the UK. The major markets are all moving to green teas, organics, herbal blends of spices, botanicals, and what is often described by British industry analysts as “exotic” (an interesting choice of word) teas like kombucha, rooibos, and herbs such as turmeric.
Exotic here really means “new” – a surprise and something different than what’s expected. For many segments of actual and potential tea consumers, these are all positives: younger people, foodies, the health conscious, pools of the newly affluent, and variety lovers. For others, the negatives are the disruption of familiar and cherished social routines, tastes that are hard to get used to, and – especially among cheap green teas – the loss of brand recognition among the growing names and types competing for supermarket space. This is sometimes termed “shelf awareness” and increased prices of fancy teas compared to the very low costs of the commodity black tea bags constitute 96% of the total market.
This growing gap between new teas and buyers driven by value and traditional products and habitual tea drinkers centered on price is not unique to the UK but general across more and more countries. The Russian market follows almost exactly the same path as the UK. In 2020, it was the third largest importer in 2020, after Pakistan and the US and well ahead of Britain. In the late 2000s, green tea was just 2% of the total, In 2020, coffee consumption overtook that for tea for the first time ever, having tripled in 10 years.
In Japan, the parallel path is the rapid fall in its green tea base, again driven by the same demographics and culture shifts. Tea has become “unfashionable.” One analyst summarizes the status non-quo. “It is mainly the over-60s who drink tea. The younger people are, the more they drink coffee. Tea is no longer attractive to customers.”
So, while the decline of traditional tea in Britain reflects many factors and forces unique to it, it’s part of a wider shift. Three sets of figures show the pattern.
Erosion in volume: Between 1974 and 2018, the last year of data that captures long-term trends before the wreckage of continuity created by the Covid-19 pandemic, UK consumption of tea per person dropped by a full two thirds, from an average of 23 cups a week per person to 8. It peaked in 1956 – over 50 years earlier – and the erosion is consistent, around 1.5% a year. While the UK remains the largest consumer of tea in Europe, this is below the growth in such countries as Germany.
Coffee is overtaking tea as the outside-the-home drink: Coffee sales have tripled since the 1970s. In general, tea is consumed at home, partly for its social role in hospitality. It thus missed out on the surge in coffee houses on the High Street and in malls. Covid-19 lockdowns reversed this trend – for now – but preliminary data suggest that is not a move back to the old tea bags but a wider purchase of loose leaf and premium black teas.
Expansion in value: As the volume of tea dropped, the amount drinkers are willing to pay increased. This is the main signal of both why mainstream traditional tea is in decline and the direction for changing this. While many of the tea bags are of fair quality, price is a mass market priority for many decades. Quality obviously suffers when the mass market is the target. The British breakfast of notorious fats and carbs – eggs plus bacon plus beans plus mushrooms plus sausage plus toast plus tomatoes plus jam – is often served with truly basic black tea bags of CTC machine macerated broken leaf dust and fannings. Wholesale bulk teas similarly are largely centered on price.
Why drink them? The answer is increasingly “I don’t.” Many of the “don’ts” move away to coffee rather than up to better black teas. While Darjeelings have been the traditional “champagne of tea” in the UK, there are so many loose leaf black teas of very high quality which just do not fit in the mainstream and lack wide distribution and branding: Chinese congous, the estate teas of Ceylon, Kenya and Assam, Nepal’s rapidly improved best gardens, Vietnamese, and Colombian teas, etc.
Black tea: legacy and liability
All these trends move the UK bag tea commodity market from legacy to liability. In a candid interview with the Financial Times in early 2020, Alan Jope, the then c.e.o. of Unilever explained why he initiated a review of the firm’s tea business, which was followed up in 2021 with plans to sell off the main parts of it. The consensual estimate is that it is worth $6 billion. Annual revenue is over $3 billion. Unilever is the largest global seller, with over 10% of the world retail market for black teas. Tetley, owned by the India Tata group has just 2%, as does Twinings, owned by Associated British Foods. Unilever has the dominant Lipton and PG Tips heritage brands, plus premium specialty names such as T2, Pukka, and Tazo.
Bids for parts of the business will come before the end of 2021. Basically, bidders will be investing in today’s scale rather than tomorrow’s growth. An analyst commented, “We see few willing buyers for a declining black tea business.”
“Two-thirds of our business is in black tea, and most of that is in the developed world... despite strong brands and putting great people to run our tea business for many years, it has been for decades a drag on Unilever’s growth,” said Jope.
Britain’s five main brands – Lipton, PG Tips, Tetley, Yorkshire, and Typhoo – plus generics like English Breakfast, Builders’ Tea, and even Earl Grey are bold in taste, edging on bitterness. They have long been served saturated with sugar and deluged with milk. The main suppliers are growers of big and full leaf: Kenya, which accounts for over half of UK imports, Assam, Sri Lanka, and African teas from Malawi, Rwanda, and Zimbabwe. Many of these are excellent and the blending skills of the major sellers are well-established. At their best, British teas are described by such words as satisfying, filling, rich, full-bodied, malty, brisk, and bold.
Part of the decline in traditional tea is the positive improvement in the British diet. In particular, this has included a reduction in the near addiction levels of sugar consumption. Historically, sweet treats were part of the daily tea routine and even more so for special occasions. A financial analyst points to the stronger link between tea consumption and that of biscuits and cake than for coffee. “They’re seen as the perfect pairing, but now that the country is cutting back on these items, the occasion to drink tea is becoming less frequent.”
It seems no coincidence that Twinings overtook PG Tips becoming the bestselling brand. In 2018, its revenues grew by 3.9% while those for PG Tips dropped by 7.2%. Twinings benefited from its expansion into such innovations as Cold In’fuse, which was the first cold tea line from a mainstream seller. Cold tea infusions sell for as much as six times that for a standard black tea bag,
Coffee: Costa and the flat white
Britain is of the many countries – surprisingly – where instant coffee is the norm. It’s convenient and cheap but hardly gourmet. Now, there are well over 20,000 coffee shops in the UK serving the same range and variety as in the US. The pace-setter is Costa, the second largest coffeehouse chain in the world, with the first being of course Starbucks. Coca Cola paid over $4 billion for the firm in 2018, which had grown to more than 3,000 stores across 31 countries, with more than 10,000 UK restaurants.
The trend began in the late 1980s. In 1986, coffee sales rose above those of tea for the first time on record. While Costa is still small compared to Starbucks, it is a focal point for the same radical impacts on a massive market. In both instances, the new firm offered variety and originality providing the advantage of just how mediocre so much of the established industry had become. In the US, cheap loss leader instant and ground coffee gave the country an international reputation for its coffee being wet and warm and striving for mediocrity but rarely achieving it. Starbucks changed the measures of quality. Costa and the many UK specialty providers did the same by expanding quality, ambience, and customer experience. The flat latte and white latte and variations on cappuccinos and espressos are the everyday order when taking a break from shopping. These are better coffees for most households than they can make or just afford to make at home, with the need for the equipment for grinding and brewing carefully selected beans.
Just 14% of consumers report that the tea they consume outside their home is better than what they make themselves. It’s very much an at-home drink. Part of its appeal is the wonderful variety of pots and tea sets. Unlike many cafes and even high end restaurants, tea is brewed at the right temperature and for the right number of minutes from serving containers that are not redolent of coffee aroma or at the Fahrenheit temperature of around 160 degrees that is far too tepid to bring out a black tea’s flavors.
But tea must get out of the home to fit into the new generations’ and demographic groups’ routines and preferences. That’s already happening of course. Just as nature abhors a vacuum, innovative food and beverage providers hate an empty glass, cup, or mug. The traditional tea houses lack national chains and scale, but they fill the teapots mostly for special groups and occasions – and tourists in search of heritage. This is the terrain of wafer-thin cucumber and salmon, pastries, and the iconic strawberries and clotted cream. The tea is often of secondary consideration and quality. It’s not at all a venue for young urban and health conscious variety seekers. It’s noteworthy that in surveys they fairly consistently state that they want spicy food accompaniments rather than sweet ones.
Newer, less sugar-laden outlets are fragmented and scattered. British public houses – the old taverns – added lunch to their basis serving of beers and liquors – the “ploughman’s lunch”, pork pie, scotch egg, and even Indian biryani and chips to offset a slowdown in out-of-home alcohol consumption. Relatively few pubs and bars follow the Japanese in adding interesting and beautifully prepared upmarket teas to their menus.
Overall, the two main questions for the tea industry are (1) What teas do we offer and (2) Where and how do customers find and get to know them?The Unilever perspective is (1) We can’t grow with the teas we built the business and have relied on and (2) We have made acquisitions and introduced innovations, but these are not moving fast enough in developed markets.
Its plans to sell off the core business seem carefully tailored to keeping operations in growth markets such as India where after decades of low domestic consumption and high exports, the pendulum is swinging. Here, Unilever follows the largely unmarked growth path rather than staying on the well-marked historical walkway. Only one is littered with commodity black tea bags.