EXCLUSIVE: Here’s the Tea on Lipton’s Transformation
Just because a brand is steeped in history doesn’t mean it can’t transform when tastes, marketplaces and values shift. One case in point is Lipton, which dates to 1880 and still uses natural elements to produce its teas but is guided by leaders who recognize the importance of pursuing new paths to responsible growth.
Progressive Grocer recently sat down with – and yes, had a cup of tea with – Lipton CEO Nathalie Roos and North American President Racquel Harris Mason, both of whom spoke at the recent Consumer Goods Forum Global Summit in Chicago. Now known as Lipton Teas and Infusions, the Amsterdam, Netherlands-headquartered business is privately owned by CVC Capital Partners, which purchased the global operation from Unilever in 2021, and includes the Lipton, Pukka, T2, PG Tips and Tazo brands, in addition to some local brands.
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“I came for this mission to transform the industry and really create value for all, improving the experience and to have more consumers buying more tea at a higher quality,” said Roos of her role at the helm of the legacy company. “From this value we create at the end consumer side, it is also really creating value for everyone in the supply chain and particularly for retailers.”
To be sure, tea remains a dietary staple and is the most widely consumed beverage in the world next to water. “In value, though, it’s only 6%,” Roos pointed out. “So, it shows that this category has been neglected and this is our opportunity. Having this category leadership and really being obsessed by this category is what our agenda is all about.”
For Roos, Mason and their teams at the Lipton Teas and Infusions, tapping opportunities involves the contemporary facets of value, including taste, variety, convenience, affordability, health and sustainability. The company is also working hard to bolster a younger base with a portfolio that includes hot and cold teas, black, and green teas, specialty teas, mixes and more.
“To me, what I’m most excited about is the potential to recruit a whole new generation of users that we can bring wonderful physical and mental health benefits to. Tea has been around for more than 2,000 years but Gen Z needs and wants tea,” said Mason, who was named president in 2023. “Our mission is to reset tea in the minds of people, especially Gen Z, because they are a beacon for the rest of the world.”
The company is already making strides in that area with offerings that appeal to younger demographics and other generational cohorts as well. In May, Lipton announced that it was updating its green tea portfolio with new varieties and reformulated blends and flavors like peach and honey ginger. According to Mason, the green tea collection has seen a 57% spike in growth and 64% of buyers on Amazon buyers are new to the segment.
The Tazo line, acquired by Lipton Tea and Infusions in 2022, represents another avenue for expansion. In addition to tea bags and pods, the Tazo collection includes latte mixes that can be combined with milk or dairy alternatives for hot or cold drinks and iced tea mixes that can be mixed with water or seltzers. “We haven’t messaged on Tazo in years – imagine what is going to happen when we remind Gen Z. When we remind them, I think they will come running,” declared Mason, adding that these products allow younger consumers to have the coffeehouse and tea emporium experiences they enjoy at budget-friendlier price points.
Across its portfolio, Lipton’s marketers emphasize the many benefits of tea to its consumers and would-be consumers. “It can be customized the way you like it, and while water is great for you, tea has flavonoids and water doesn't have flavonoids. We know that two cups of tea a day actually protects your heart – we have clinical research behind that – so it's a positive health choice,” noted Mason, who has worked with her U.S. team to collaborate with several leading “micro” influencers to communicate about tea’s nutritional and lifestyle value.
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From a sales and marketing perspective, retailers can promote tea products for many dayparts and seasons. “Lipton is the number one iced tea and Tazo is actually consumed just as much cold as it is hot. We want to make sure that we think about all of the occasions and all of the need states across the day,” Mason explained.
Meanwhile, corporate responsibility remains a driver of goals and tactics at Lipton Teas and Infusions. For example, the leadership at Lipton has worked with global partners to enhance the sourcing of tea in a way that benefits the planet and people. “We been working with Kenya – with the president, the government, the ministry of education and suppliers in East Africa, including not just the big ones, but also the very small ones, to really redefine this industry and create new standards. We have new standards in terms of quality, environment and social,” Roos said.
Additionally, Lipton has established the Lipton Tea Innovation and Technology Academy in Kenya, where it will train upwards of 3,000 students a year. In May, the company announced that it is transferring its tea estates in Kenya, Rwanda and Tanzania to Browns Investments, with the agreement that all tea sold by Browns will be grown and harvested to a new set of standards for quality, social and environmental protections.
Such responsible actions resonate and align with the Gen Z audience. “By taking them as our compass, it obliges us to act now and be fully transparent and not just make some vague promises for the future,” Roos pointed out.
The two leaders are as passionate about drinking tea as they are talking about it. In the sit-down conversation with PG, Roos shared a couple of tea bags from her own collection she had on hand, while Mason reported that she is a lifelong tea drinker who literally consumes different forms morning, noon and night. “I feel like it’s part of what makes me a balanced, centered person,” she confided.
Roos agreed, noting that the company has revisited all of its teas to make sure they meet high thresholds for taste and quality. “I’m very proud to say that all of our teas, all over the world, are now best in class from a blend point of view,” she remarked.
