Can Generation Z save tea? How young Brits are rekindling their love of classic tea despite their relevance crisis

Shortly afterwards, Twinings – one other top brand owned by Associated British Foods – reported its highest after-tax profit in history of £77 million ($97.8 million).

So far, you would possibly say, this will not be surprising. Everyone knows that the British love their tea, which George Orwell once described as “one of the pillars of civilisation” within the country.

However, take a more in-depth look and you will notice that this isn’t any unusual service.

Tea is indeed popular – Britain drinks about 36 billion cups Within a 12 months, half the population was drinking tea day by day – but consumption has declined rapidly, especially for black tea, the quantity of which has been falling by two to 3 percent annually for many years, while the bitter aroma of barista coffee is increasingly noticeable on Britain’s high streets.

So does the recent spate of record sales mean that it’s time for tea again?

The coffee shop dilemma

If builder’s tea – black tea, sold in tea bags, often served with milk and sometimes with sugar – is making a comeback, the info doesn’t suggest it.

According to Kiti Soininen, Category Director, UK Food & Drink Research at market research company Mintel, “after a brief pause during the pandemic, the regular tea bag segment has resumed its long-term volume decline.”

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This should come as no surprise considering where the market began.

“If you think back to the 1970s, tea was pretty much the only hot drink we had. We did have the occasional instant coffee, but we were a tea-drinking nation,” says Ben Newbury, head of name marketing for Yorkshire Tea at Betty’s and Taylor’s. As the variability and quality of different drinks increased, especially coffee, things only went downhill.

However, Newbury believes this inevitable incumbent effect is exacerbated by a way of apathy and defeatism within the industry. “Many other manufacturers and brands have simply stopped talking about tea and its benefits,” he says.

Yorkshire Tea is actually unusual in that it has recently seen growth in each value (sales) and volume (variety of tea bags sold), forecast at 21% and 12% respectively in 2023.

It did this by increasing its market share in black tea, which Newbury attributes to its premium positioning within the mass market. In a price of living crisis, it seems, Brits found it more palatable to forego a £5 ($6.35) skinny latte than to avoid wasting a few cents on a teabag.

Most other corporations reported strong results despite falling volumes, with sales growth directly attributable to higher prices attributable to cost inflation.

Yorkshire will not be the one brand to recognise the advantages of a premium product, says Soininen, pointing to Tata-owned brand Tetley, which launched its Golden Brew, and Lipton – the world’s largest tea company, spun off from Unilever in 2022 and selling over 30 brands – which last 12 months relaunched its UK mass-market brand PG Tips with a stronger concentrate on quality.

“Tea is somewhat unpopular in the UK because it lacks a leading category,” says Gareth Mead, Lipton’s head of corporate communications and sustainability, declaring that PG Tips’ latest promoting campaign— starring British rapper and actor Ashley Walters and directed by Sir Steve McQueen, 12 years slave Fame – was his first latest campaign in nearly eight years.

“If you want consumers to drink more tea, we need to give them a reason to buy the product… our approach has been to reinvest in PG Tips,” says Mead, who adds that sales rose in the primary quarter for the primary time in years. “There is a huge opportunity to revive the British love of tea.”

That’s a daring statement, given the long-term decline in day by day tea consumption. But Lipton, like Yorkshire and the broader industry, sees potential for brand spanking new markets in perhaps surprising places.

Tea time for Generation Z

London never had a café culture, unlike Paris or Vienna. The traditional silver-service tearooms have long since given approach to run-of-the-mill cafes on town streets, surviving only as afternoon tea, often taken out of sight in posh hotels.

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But within the last decade, an import from Taiwan has brought tea culture back to life – even when Orwell would hardly have recognized it as such.

If you stroll down Shaftesbury Avenue in London’s West End, from Piccadilly Circus to New Oxford Street, you will pass at the least 10 bubble tea shops, by my count, selling cold tea shaken over ice in plastic cups, often in eye-catching colours, with various jellies, popping bobas and tapioca pearls. Popular flavors include lychee, taro and winter melon; Darjeeling and Lady Grey are less popular.

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The clientele, often queuing outside within the back streets of Soho, is generally made up of teenagers and folks of their twenties, and they can not get enough of it.

Newbury has no illusions that younger Britons will ever adopt the tea-drinking habits of their parents or grandparents – a YouGov survey found 1 / 4 of those over 60 drink greater than 20 cups per week, in comparison with just 6% of 16- to 24-year-olds. Nevertheless, he sees bubble tea as a logo of how Generation Z can encourage latest tea-drinking experiences.

“It’s fascinating that the younger generation is interested in tea. It feels very similar to coffeehouse culture. It’s really about theater and a personalized pleasure, similar to a frappe or flavored coffee,” he says.

Neither Yorkshire nor Lipton are directly involved with bubble or boba tea – 2.6 billion US dollars world market with an annual growth of over 7% – but each countries have specialised in ways of drinking tea that might have been unthinkable just just a few many years ago.

Mead points to Lipton Cold Infuse (tea that’s brewed cold, unlike iced tea: Lipton Ice Tea is a totally separate company and stays a three way partnership between Unilever and Pepsico) and the Tazo brand of tea concentrates, which have seen growth particularly in France and the USA.

“There’s an image problem. If you try to google Generation 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-the-field energy of coffee,” explains Mead.

Beyond variety, atmosphere and novelty, he adds, tea’s opportunities with Generation Z also come from its alignment with two megatrends: health (tea has many proven health advantages, including high levels of polyphenols and flavonoids, that are good for the center) and sustainability (tea requires little or no processing and could be very lightweight, so it leaves a comparatively small environmental footprint).

“Generation Z are not yet regular tea drinkers, but they value these things more than any other generation,” he says. “That’s something we as an industry should be very excited about. 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 why it shouldn’t be cooler than coffee.”

Diversification and internationalization

According to Mintel’s Soininen, teas marketed for his or her health advantages have been the highest performers within the category in recent times, with 19% of recent launches within the UK making some type of ‘functional’ claim, often regarding reducing stress or improving sleep.

Lipton’s herbal tea brand Pukka has spread worldwide from the UK, while Yorkshire recently launched a decaffeinated herbal tea and even a Yorkshire Tea Kombucha.

Beyond reaching Generation Z, it is a component of a broader trend toward product diversification, as corporations develop tea products or brands to serve different niches – be it for various groups, needs, and even times of day.

“Tea is the ultimate elixir. It can get you out of bed. It can help you carry on a conversation. Some people even drink it before they go to sleep,” says Newbury.

Yorkshire is a component of a bunch that reflects this must appeal to multiple audiences. This group also includes premium speciality tea company Taylors of Harrogate, in addition to Taylor’s Coffee and Betty’s Tea Rooms. Lipton’s portfolio, meanwhile, includes its namesake brand (the best-seller in 150 countries), in addition to PG Tips, Pukka, Tazo’s fruity and spicy teas and T2’s mix of premium tea with high-quality teaware, geared toward the posh gift market.

Another strategy is to diversify outside the UK. Unlike within the UK, the worldwide tea market at home – which, in accordance with Statesman– is growing at a mean annual growth rate of 6%.

Lipton did this an extended time ago. The flagship brand, founded in Glasgow and now based within the Netherlands, isn’t any longer available within the UK. But the family-run Yorkshire company can be actively pursuing sales in growth markets abroad. “In some parts of China they make lattes with Yorkshire Gold,” notes Newbury.

British tea culture still has a cachet all over the world and still means something at home. Will or not it’s what it once was, The A daytime drink and a pillar of civilization? Unlikely. Orwell’s time is over, for higher or for worse.

But can it survive and grow again? Yes. Like the whole lot else, it evolves, and it’s the businesses that recognize this and evolve accordingly that may ultimately succeed.