A woman drinks tea in a T2 shop in London. REUTERS/Stefan Wermuth
Consumer goods giant Unilever opened its first European tea
shop in London today, aiming to cash in on the growing appeal
of unusual and luxury cuppas and ignite fresh enthusiasm for
the national drink.
A new generation of Britons drink more coffee than tea since
the arrival of the mighty Starbucks, and a host of imitators
that now crowd high streets. But with Starbucks opening a tea
bar in New York last October and talking about a $90 billion
global market, the tide may be turning.
Unilever, whose Lipton brand is the world's top-selling tea,
bought Australia's T2 tea chain - where the menu ranges from
a 5.75 pound ($9.65) box of English Breakfast to Japanese
Gyokuro teas costing upwards of 25 pounds ($41.94) a tin - in
September and hopes to appeal to the same consumers
interested in upscale coffee that fuelled the last drinks
Sales of luxury and super-premium teas are growing at an
annual clip of 12 to 14 percent, said Kevin Havelock,
president of Unilever's refreshment business, which grew 5.9
percent in the first quarter.
"We are seeing more and more interest in more exciting teas,"
Havelock said at the store. "This provides growth for
Unilever in the most exciting growth segment of the tea
The store, in fashionable Shoreditch, has 200 types of tea
and a rainbow selection of pots and cups, and gives Unilever
access to some of London's trendiest young consumers -
potentially useful for the marketing of its 400 other brands,
which range from Dove soap to Hellmann's mayonnaise.
Unilever is currently looking for ways to boost its
profitability after the global economic slowdown crimped
sales in many markets, and is selling underperforming or
non-core brands. T2's profit margins currently outweigh
Unilever's, and Havelock said its growth stands to fatten the
T2 is the brainchild of Australian entrepreneur Maryanne
Shearer, who opened her first tea boutique in Melbourne in
1996. When Unilever announced the deal - declining to
disclose the price it paid - T2 had 40 stores in Australia
and sales nearing A$57 million ($52.94 million) for the year
ended June 30, 2013. Sales are growing at a double-digit rate
and performance has "more than met expectations," it said.
"Darjeeling First Flush" is Shearer's favorite tea though she
takes pride in T2's unusual flavors including "Licorice
Legs", inspired by American actor Jennifer Lopez.
With an array of herbal and scented teas rounding out the
more standard offerings, T2 hopes to appeal to a younger
generation that grew up drinking cappuccinos and lattes.
Though 65 percent of Britons aged 25 to 34 drink tea at least
once a day, according to research firm Mintel Group, that is
lower than the 72 percent of those above 55 who do.
Unilever, which already operates about 400 retail outlets
under each of its Ben & Jerry's and Wall's brands, hopes
to open more T2 stores in Britain this year, then look
"We actually don't believe that there are any highly
developed cities in the world that would not be a good
environment for T2," Havelock said.
Still, Unilever is likely to proceed with caution. Coffee
sales in Britain have far outpaced tea sales for the past
five years, according to Euromonitor International, and while
the economic environment is improving, consumer confidence is
still fragile. Whittard of Chelsea - another tea and coffee
retailer - came close to filing for administration in 2008
after its Icelandic owner was hit by the banking crisis and
demand from UK consumers ebbed.
In terms of developing the brand, Unilever has no plans to
sell T2 tea at grocery stores. Havelock, however, sees
And while yellow-label Lipton is sold in capsules for Keurig
Green Mountain's at-home coffee brewers, Havelock said though
it was "difficult" to imagine T2 in a capsule, it was