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

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

So far, you might say, this is not surprising. Everyone knows that the British love their tea, which George Orwell once described as “one of the pillars of civilisation” in the country.

However, take a closer look and you will see that this is no ordinary service.

Tea is indeed popular – Britain drinks about 36 billion cups Within a year, half the population was drinking tea every day – but consumption has declined rapidly, especially for black tea, the amount of which has been falling by two to three percent annually for decades, 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, usually served with milk and often with sugar – is making a comeback, the data does not 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.”

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 brand marketing for Yorkshire Tea at Betty’s and Taylor’s. As the variety and quality of alternative drinks increased, especially coffee, things only went downhill.

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

Yorkshire Tea is certainly unusual in that it has recently seen growth in both value (sales) and volume (number 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 in the mass market. In a cost of living crisis, it turns out, Brits found it more palatable to forego a £5 ($6.35) skinny latte than to save a few pennies on a teabag.

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

Yorkshire is not the only brand to recognise the benefits 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 year relaunched its UK mass-market brand PG Tips with a stronger focus 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, pointing out that PG Tips’ new advertising campaign— starring British rapper and actor Ashley Walters and directed by Sir Steve McQueen, 12 years slave Fame – was his first new 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 first quarter for the first time in years. “There is a huge opportunity to revive the British love of tea.”

That’s a bold statement, given the long-term decline in daily tea consumption. But Lipton, like Yorkshire and the wider industry, sees potential for 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 way to run-of-the-mill cafes on the city streets, surviving only as afternoon tea, usually taken out of sight in posh hotels.

But in the last decade, an import from Taiwan has brought tea culture back to life – even if 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’ll pass at least 10 bubble tea shops, by my count, selling cold tea shaken over ice in plastic cups, often in eye-catching colors, with various jellies, popping bobas and tapioca pearls. Popular flavors include lychee, taro and winter melon; Darjeeling and Lady Grey are less popular.

The clientele, often queuing outside in the back streets of Soho, is mostly made up of teenagers and people in their twenties, and they can’t 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 a quarter of those over 60 drink more than 20 cups a week, compared to just 6% of 16- to 24-year-olds. Nevertheless, he sees bubble tea as a symbol of how Generation Z can inspire new 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 both countries have specialised in ways of drinking tea that would have been unthinkable just a few decades ago.

Mead points to Lipton Cold Infuse (tea that is brewed cold, unlike iced tea: Lipton Ice Tea is a completely separate company and remains a joint venture 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 benefits, including high levels of polyphenols and flavonoids, which are good for the heart) and sustainability (tea requires very little processing and is very lightweight, so it leaves a relatively 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 their health benefits have been the top performers in the category in recent years, with 19% of new launches in the UK making some sort of ‘functional’ claim, often relating to reducing stress or improving sleep.

“Tea is the ultimate elixir. It can get you out of bed. It can help you carry on a conversation. Or for some people, it’s what they drink before they go to sleep.”

Ben Newbury

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 part of a broader trend toward product diversification, as companies develop tea products or brands to serve different niches – be it for different groups, needs, or 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 part of a group that reflects this need to appeal to multiple audiences. This group also includes premium speciality tea company Taylors of Harrogate, as well as Taylor’s Coffee and Betty’s Tea Rooms. Lipton’s portfolio, meanwhile, includes its namesake brand (the best-seller in 150 countries), as well as PG Tips, Pukka, Tazo’s fruity and spicy teas and T2’s blend of premium tea with fine teaware, aimed at the luxury gift market.

Another strategy is to diversify outside the UK. Unlike in the UK, the global tea market at home – which, according to Statista– is growing at an average annual growth rate of 6%.

Lipton did this a long time ago. The flagship brand, founded in Glasgow and now based in the Netherlands, is no longer available in the UK. But the family-run Yorkshire company is also 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 around the world and still means something at home. Will it be what it once was, The A daytime drink and a pillar of civilization? Unlikely. Orwell’s time is over, for better or for worse.

But can it survive and grow again? Yes. Like everything else, it evolves, and it is the companies that recognize this and evolve accordingly that will ultimately succeed.