Builder’s brew hit by millennial preference for coffee and fruit tea

TEA drinkers are a dying breed as “generation Z” opts for herbal equivalents, the company that owns the PG Tips has warned.

Graeme Pitkethly, Unilever’s chief finance officer, said millennials and people in their late teens and early 20s preferred to drink coffee and flavoured teas instead.

He pointed to increased growth in the company’s sales for Pukka tea as opposed to the more traditional Lipton and PG Tips brand.

He said: “I drink five or six cups of builder’s tea a day, but unfortunately we are dying at a faster rate than generation Z and millennials are consuming it.

“They might drink tea, but they want to drink quite high-end, expensive products. They drink a lot of coffee. There’s a bit of demographic challenge around that.”

Britons drank 330 million fewer cups of tea in the year to May 2019 compared with a year earlier, according to data experts Kantar. The drop in sales was largely fuelled by lower demand for traditional black tea, with sales falling 3.4per cent.

As a result the PG Tips brand lost £7.7 million from its annual sales in the year to July 13 2019, down 7.3 per cent to £98.7million, according to separate industry figures by Nielsen.

It meant the teamaker lost its coveted position as Britain’s bestselling tea brand to Twinings, which took an additional £3.9 million to turn over £107.9million following the launch a range of cold-brew fruit and herbal teas called Super blends.

As the appeal of traditional tea wanes, Unilever has begun to promote some of its trendier brands.

In 2017 the group snapped up Pukka, an organic herbal tea business. It produces teas such as Cleanse, which promises to “bring purity and nourishment to a weary spirit”, and Love, which purports to “soothe your soul”. Unilever also owns T2, a higher-end Australian tea business which it purchased in 2013.

The brand now has four shops across the UK, selling an array of herbal and scented teas, such as “Darjeeling First Flush” and “Liquorice Legs”, which is said to have been inspired by Jennifer Lopez, the pop singer.

But Mr Pitkethly insisted Unilever had no plans to sell off any of its traditional brands. He said: “PG Tips is still an unbelievably strong brand. UK consumers are just obsessive about it and so are our customers.

“There’s no crisis. It’s just low growth because the consumer demographic for high-volume builder’s tea drinking in the UK is something that’s not growing very quickly.”

Black tea is “simply not growing” for Unilever in these markets, he said.

Unilever also owns other brands including Marmite, Dove deodorant and Magnum ice cream.