British tea brand Typhoo on the brink of collapse as consumers ‘switch to coffee’

British tea brand Typhoo is facing a crisis as consumers are reportedly shifting their preference from tea to coffee, leading to a significant drop in sales. The 120-year-old iconic tea maker is on the verge of collapse, with mounting debts and a steady decline in revenue. Typhoo Tea has taken the step to file a court notice for administration, raising concerns for its workforce of over 100 employees. CEO of Typhoo, Dave McNulty, highlighted that appointing administrators would provide the company with essential time to explore potential solutions to overcome the challenges it faces.

The once-beloved brand is struggling to compete with other tea brands in the market and is grappling with the increasing popularity of coffee. Factors such as escalating costs following geopolitical events, like Russia’s invasion of Ukraine, have further exacerbated Typhoo’s financial woes. Recent financial reports revealed a staggering increase in losses from £8.4 million to nearly £38 million in the year up to September 2023, accompanied by a 25% decrease in sales to £25.3 million. The company employed 116 staff members as of late 2023.

In addition to these challenges, Typhoo faced setbacks when trespassers caused extensive damage to its former factory in Merseyside in August 2022. This incident led to £24 million in exceptional costs, disrupting operations significantly. Despite these hurdles, Typhoo, known for its nostalgic 1980s advertisements and iconic slogan “You only get an OO with Typhoo,” maintains a place in the hearts of many Britons.

Founded in 1903, Typhoo holds a special place in British culture and memory, with its adverts featuring famous personalities like Su Pollard and Cilla Black. Since 2021, the majority shareholder of Typhoo has been the private equity firm Zetland Capital, which appointed Dave McNulty as CEO in a bid to revitalise the brand. As part of its efforts to revamp operations, Typhoo made significant changes to its supply chain, aiming to address issues such as ethical concerns on tea plantations.

With the appointment of administrators from EY to guide its next steps, Typhoo is navigating a critical period in its long history. While the future remains uncertain for the tea maker, its legacy and impact on British tea culture are undeniable.

Insights and Summary:
The decline of Typhoo Tea, a long-standing British tea brand, reflects shifting consumer preferences and challenges in the market, including increased competition and changing trends. The brand’s struggles highlight the importance of adaptation and innovation in the face of evolving consumer demands. As companies like Typhoo navigate turbulent times, there is a lesson in resilience and the need to stay attuned to market dynamics to sustain longevity in the ever-changing business landscape.