Typhoo on the brink of entering administration as Brits switch to coffee

One of Britain’s oldest tea companies, Typhoo, has failed a court notice and is preparing to enter administration after 120 years in business.

The company’s financial struggles were highlighted in its latest figures, which showed that losses escalated from £9.6 million to £38 million in the year ending September 2023.  

During the same period, sales dropped from £33.7 million to £25.3 million – a percentage decrease of just under 25 percent. 

In a statement to Sky News, chief executive Dave McNulty said: “This action has been taken to enable us to pursue a sale of the business. A further statement will be issued in due course with further information.”

Typhoo’s struggles occur amid changing consumer preferences in the UK, as data has projected a decline in tea consumption by 2028 as Brits increasingly favour coffee, energy drinks and trending drinks like bubble tea. 

The brand, which was founded in 1903 by Birmingham grocer John Sumner, stands alongside PG Tips, Tetley’s and Yorkshire Tea as one of Britain’s major tea brands. 

Typhoo suffered a devastating setback in August 2023 when trespassers broke into its former Moreton factory in Merseyside. Extensive damage was caused, rendering substantial amounts of tea unusable and disrupting customer orders. 

The incident contributed to £24.1 million in exceptional costs for the company.  

Its ownership changed hands in 2021 when private equity firm Zetland Capital acquired it from Indian conglomerate Apeejay Surrendra Group, which had purchased the business from Premier Foods in 2005.

The company is not yet in administration, Mr McNulty stressed, describing it as “an on-going confidential process,” with the filing providing Typhoo temporary protection while it explores its options. 

In a nation of stereotypical tea drinkers, coffee has now become more popular than tea in the UK. 

Industry analyst Mintel projects an eight percent decline in tea consumption between 2023 and 2028, as British consumers increasingly favour coffee, energy drinks, and trending beverages like bubble tea.

In a separate study, the Statistica Global Consumer Survey found that 63 percent of Britons drink coffee regularly, while now only 59 percent regularly drink tea. 

It is believed that the UK drinks around 98 million cups of coffee a day, a 28 million cup increase from 2008. The average person in the UK drinks two cups of coffee a day.