Lyons square bags

interview here with the Head of the new company. Confirms that pyramid bags being replaced with square.

INTERVIEW

Lipton’s Nathalie Roos: I’ll make PG Tips as cool as coffee

While sales of our traditional cuppa have sunk, Roos is brewing up ways to reverse the trend

The Alsace-born Nathalie Roos turned around Mars’s French business, ditching products. At Lipton it’s the same recipe

t’s hotter than hell in London, but Nathalie Roos looks as cool as only the French can.

She puts it down to her Christian Dior trouser suit, selected by her personal shopper back home in Strasbourg, but that doesn’t explain why the Brits in the hotel bar are sweating buckets while she’s as fresh as a mojito.

Luckily, the Alsace-born executive runs Lipton Teas and Infusions, the multibillion-pound business behind that most British of brands, PG Tips. So, while the tables around us tuck into G&Ts, we slake our thirsts with a refreshing cuppa — black, no sugar, for her; white, with one, for me.

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“Tea is so central in this country,” she says. “It’s like, tea can solve it all.”

Unilever didn’t agree. Last year it sold its tea operations to the private equity house CVC for €4.5 billion, having failed to improve its flatlined sales for years.

The new owners tapped up Roos from L’Oréal, where she’d been running the professional products business, selling €900 million a year’s worth of Kérastase, Redken and other haircare brands to hairdressers.

Disposing of Unilever’s name “ekaterra”, Roos has rebranded the tea portfolio

ALAMY

She doesn’t mince her French-inflected words when asked about Unilever’s stewardship of Lipton, whose cuppas also include Pukka, T2 and Tazo. The brands, she says, had got “lost” in the vast business, whose products ranged from razors to soap.

“What we inherited from Unilever was a lack of pride and confidence, both in the brands and in the [tea] category.”

Nothing highlighted this more than its irritating decision to choose a made-up name for the teas operation when it decided to split the brands away from the core Unilever business. It came up with “ekaterra”. A random word typed out by an infinite number of PG Tips chimpanzees? No. Unilever’s marketing guff said eka is sanskrit for “one” and terra is Latin for “Earth”.

Roos will have none of it: “They made up this name to hide and look like they’re a sustainable, tah, tah, tah [French for “blah blah blah”] company.”

Changing the name to Lipton — the biggest brand in the portfolio, with €1 billion of turnover in more than 100 countries — was one of her first moves.

She says the lack of attention Unilever had paid to the business provides an opportunity to expand it and make a profit in the process. Not just growing the company, but the tea market generally.

A former marketer for Nescafé’s arch rival Maxwell House, she says the tea industry should have learnt from the coffee market, where brands invested to go upmarket and expand demand. Where coffee sales volumes in the UK have surged from 50 million kg a year to nearly 90 million over the past 20 years, tea has shrunk from 120 million to nearly 80 million, according to Kantar data.

Roos says: “We will take industry leadership because nobody else has. Unilever should have done it, but because tea was so small in their total portfolio they have not done it. Now, we will. We are a €2 billion [a year] business, dedicated only to tea, with a fantastic portfolio of brands.”

The PG Tips pyramid tea bag will be dropped in favour of a square bag, though one of higher quality filter paper.

She's surprisingly forthright for a CEO of a multi billion euro company, I'm in danger of actually starting to like her

Let's hope she turns the business around, but it's difficult to see how

Tea is about a generic a product as there is. Herbal tea brands like Pukka were probably the closest they got to upmarket

My main worry is they'll ruthlessly cut costs and ditch the underperforming brands, which would probably include Lyon's as it's only popular in one corner of Ireland

The box of 160 is definitely smaller, I'd say it's between half and two thirds the size of the red box

The shrinkage is probably down to the flat bags packing better

This would definitely be a cost saving as you can fit more boxes to a pallet. Cutting the number of pallets shipped to Ireland by 30% would probably represent a significant saving

Also the different blends are now all in similar boxes (all green). Again that's a saving on printing because 90% of the box can be done on a single printer using the same ink and the different bits only use a small amount of ink

Has to be cost cutting.

Like someone else said earlier I thought the new bag it tasted weaker. We'd had some Tesco tea bags recently and thought they were weaker at the time. This Gold blend seems a move in that direction.

We have Barry's at work and I'm not a fan but I've got used to it.

I'm gonna have to disagree with the idea that fancy gimmicks don't sell products, just look at any wearable device or the entire Apple product range 😁

I think it's more than people see teabags as a commodity item, gimmicks like the pyramid bags aren't going to sell more so why bother?

It's a constrained market anyway, Lyon's doesn't exist outside Ireland and is famously the "Dublin" tea and Barry's is the "everywhere else" tea

Or so I'm informed by people who drink Barry's and aren't from Dublin, good reliable sources 😂

Anyway, my point is that it's unlikely that the French or Germans or Chinese are going to suddenly start drinking cups of Lyon's tea, so there's no opportunity to grow the market

I think if there's money in tea, it's in the herbal teas. I believe Unilever even kept that section if their tea business when they sold off the rest since it was more profitable

They probably felt the market was saturated with no room for growth

It isn't like there was suddenly going to be a fad in China for breakfast tea and sales will go up by 10,000%

We're the weirdos in the world drinking blended black tea with milk, pretty sure it's just here and the UK where that's popular

I remember years ago I got a glass (yes, a glass) of tea in Germany. I asked for milk in the tea and the poor cashier in the cafe was looking at me like I'd grown another head and it was speaking to her in Sanskrit

That was one of my first indicators that there may be some cultural differences around drinking tea 😂

Tea popular in the Arab world ,Asia, Pakistan and India along with Australia.

I was in Germany last year and found a bag of Pakistani tea in the hotel kitchen. Had a cup of it, absolutely delicious . Maybe drinking milky tea is an irish thing but we are definitely not weirdos in our attachment to tea. It always was and will be an important traded commodity. Like all commodities it's price is rising fast and you will notice that especially with the supermarket brands, up 50% in last few years

I guess the key thing there is you can present bubble tea as a high end product, and thus grow the market and make more money

I don't really see CVC capital or anyone else pulling off the same trick with Lyon's or anything similar

They do market English tea internationally and there's probably space for it to grow, but I think it's unlikely they'll be doing it under the Lyon's or Lipton brands

They'll likely spin out a new brand with much nicer packaging, and pyramid teabags. Oh, and at triple the price 😕

So Lyon's has probably hit it's market peak and if they want to make it more profitable the only avenue is to cut costs

yeah in similar space - I worked with a Spanish lad who put hot milk onto his teabag.