Iconic British Tea Brand Faces Challenges Amid Changing Consumer Preferences
Vape maker Supreme has rescued the 120-year-old tea brand Typhoo Tea in a £10m deal, aiming to keep the iconic British brand “in British hands.” The Manchester-based company, which makes the e-cigarette brand 88Vape and distributes nicotine and home products to supermarkets, stepped in after Typhoo fell into administration in November due to slumping sales and rising debts.
Supreme chief executive Sandy Chadha expressed enthusiasm for the acquisition, stating, “Typhoo is such an iconic brand.” The company cited a mix of “sound business rationale and personal affinity” as the driving factors behind the decision to buy Typhoo.
Typhoo’s Storied History and Celebrity Endorsements
Typhoo Tea, once a household name, has a rich history of memorable advertising campaigns featuring some of the biggest stars on TV in the 1980s, including the late presenter and singer Cilla Black and late actor and comedian Frankie Howerd. The brand’s catchy slogans, such as “you only get an ‘oo’ with Typhoo,” and celebrity endorsements from the likes of Nigella Lawson in 2016, have contributed to its enduring appeal.
However, despite its loyal customer base, Typhoo has struggled in recent years due to changing consumer preferences and increased competition from own-label supermarket brands. The company’s pre-tax losses rose from £9.6m to £38m, while sales fell from £33.7m to £25.3m in the year to the end of September 2023.
Supreme’s Strategy to Revive Typhoo and Expand Its Portfolio
Supreme sees the acquisition of Typhoo as part of its strategy to branch out into other areas beyond its current portfolio, which includes soft drinks, gym supplements, multivitamin gummy brands, and non-food items such as batteries and home lighting. The company distributes to major retailers like B&M, Home Bargains, Sainsbury’s, Tesco, The Range, and Poundland, as well as HM Prison and Probation Service.
Analyst Susannah Streeter from Hargreaves Lansdown believes that Supreme has bagged a bargain by buying Typhoo out of administration and that the company will likely “steam ahead and find efficiencies to cut costs and try and coax the company back to profit.” Streeter also notes that Typhoo’s loyal customer base and wellness image could tie into Supreme’s ambitions in the supplements and multivitamin arm.
Despite the challenges faced by black tea brands in the face of competition from coffee, soft drinks, and herbal tea, Typhoo remains one of the biggest names in tea alongside PG Tips, Tetley, and Yorkshire Tea. Supreme expresses confidence that Typhoo will “thrive” under its ownership due to the strong brand loyalty customers have for the tea brand.
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