I know that after reading the title, I already lost half of my readers and that the other half will probably think that I am either sold to those you should not speak about or that I am totally crazy/out of my mind…
As usual, the truth is slightly different.
I just went in holidays and I found in the place I was staying at a January 2010 French magazine talking about Lipton and entitled: “Lipton, the art of making the whole world like tea”.
I sat there and I read through these three pages and found some facts that Teaconomics had to give others the opportunity to get access to these information.
Before I begin, let me remind you that this article was published in January 2010, written in December 2009 (at the latest) and that all the figures are from the period 2008-2009.
But first, just a couple of figures and data.
Lipton in 2009 sold 52 billions of tea bags in the whole world.
The company is also the second brand drank in the world (behind Coca Cola) and saw its turnover and profits increased in a huge way in 2008.
Now let’s have a look at Lipton’s situation in different countries…
- In France, 1 out of every 2 tea bags sold is a Lipton. 2 times bigger than Twining, Lipton keeps on changing its products to fill the sales space.
- In the USA, a special mix for iced tea. Lipton has a share of 30.7% of this market and made an unique recipe that can be used even with cold water.
- In Saudi Arabia, Lipton’s colours can be seen in the whole country. Lipton became famous there by painting all the tea houses in yellow and red. It has a market share of 66%.
- In China, Lipton is one of the few Western brands really known. To bring Chinese consumers to their black teas in bags, Lipton created a mixture ready to drink with powdered milk and sugar.
So the big question is: how is Lipton so successful?
First of all, they have a huge estate in Kenya (14,000 ha), with a total output equal to 10% of their yearly tea production.
Obviously, this also helps them to standardise the quality of their products (really important when you target the mass market).
Then, they have the Lipton Institute of Tea.
This unique facility (located in Sharnbrook, North of London) is home to a hundred biologists, nutritionists, aroma experts… (plus 40 scientists in Kenya and 50 testers in India, China, Japan and the United States).
Their mission? To drink 10,000 cups of tea per week but in a scientific way, much like an expert in oenology does when he tastes wine.
This allows them to change their teas really often (in 2008, 13 out of the 73 products sold in France under Lipton’s two brands were changed).
Lipton also focused on market areas that other mass market players (Twinnings and Tetley) had left open:
flavoured teas (with a new crystal bag and with natural products) allowing them to increase their prices,
dieting products (until now, it didn’t work well but Lipton is still there),
fair trade products (with their Kenyan estate being certified by a NGO Rainforest Alliance and in 2015 all the estates selling tea to Lipton will have this certification).
This costs money to Lipton but gives them an advantage as every certified estate sells their production to them at a premium price, giving Lipton access to non auctioned teas.
At the same time, Lipton invested in advertising and their sales force (going as far as helping the supermarkets to put the products into the shelves with Lipton’s products being the most visible ones).
With half the world yet to be conquered and a good tactic to invade new markets, it seems that the sun is shining for Lipton Yellow.