Mazawattee was the highest selling brand of tea in the world.
John Densham & Sons introduce Mazawattee Tea
John Boon Densham (1815 – 1886) was a Plymouth chemist. He relocated to Croydon in the 1860s. With a Mr C Lees he entered the wholesale tea business to form Lees & Densham. The business was based at Philpott Lane, where the bulk of Britain’s tea auctions took place.
Lees divested his stake in 1870. Densham’s three sons entered the business, and the firm began trading as John Densham & Sons. With premises at Eastcheap in London, the firm grew to become a sizeable concern. By the 1880s they had also established a warehouse in Manchester.
Edward Densham (1842 – 1912), the eldest son of the founder, became the head of the business. He was a kindly and popular man.
John Densham & Sons introduced the Mazawattee Tea blend in 1886. It was made entirely from Ceylon leaves, which were marketed as superior to the standard Chinese leaves. The trademark was registered the following year.
Packaged tea had been introduced by John Horniman in the 1840s, but most tea at this time was still sold loose from grocers’ shops. Packaged tea promised a consistent product, and was a vouch for purity from contamination.
Mazawattee Tea becomes a market leader
Over 14 million packets of Mazawattee tea were sold every year through 5,000 outlets by 1892. By this time sales had overtaken those of Horniman, who had led the market since at least the 1860s.
Edward Densham retired as head of the business in 1892. His two brothers, John Lane Densham (1853 – 1918) and Benjamin Densham (1847 – 1929), were appointed as joint managing directors.
A seven storey factory had been erected at Tower Hill, London by 1894.
The Mazawattee Tea Company was formed with a valuation of £550,000 (about £66 million in 2015) in 1896. Mazawattee tea was the largest tea brand in the world.
Mazawattee was the largest wholesale tea business in the world by 1898. In one single auction the company had to pay the largest ever tea duty, £63,147, after it acquired 1,687 tons of tea.
In 1900 Mazawattee again broke the record for the highest duty paid on tea (£85,862 in 1900), when they acquired over 5 million lbs of the good in a single transaction.
Benjamin Densham retired in 1901.
A new £400,000 factory was established at New Cross in 1901. It was the largest and best equipped tea processing plant in the world. The new site also allowed the company to move into the manufacture of cocoa and chocolate confectionery. Over 1,000 workers were employed across a four acre site.
In 1901 the company had a share capital of £800,000 (around £88 million in 2015). By 1902 this had risen to £1 million, with assets excluding goodwill valued at over £650,000.
By 1905 millions of people drank Mazawattee tea every day, and the company had over 15,000 outlets in the United Kingdom.
Financial struggles and demise of the brand
By 1900 the J Lyons tea shop chain had expanded to over 50 outlets. In 1904 the Mazawattee board decided to open 500 small shops at a cost of £200 each. Two board members, R A McQuitty and J H McLean, were placed in charge of executing the operation. They acquired only 164 teashops, but at an average cost of £500 to £2,000. Some cost as much as £4,500 and £10,000. Some annual rents were over £1,000 a year. Furthermore, the shops made serious profit losses from the start. An extraordinary meeting was called in 1905. McQuitty and McLean were immediately sacked and all the shops were quickly divested, but by then total losses amounted to nearly £300,000. Mazawattee came very close to collapse, and in attempt to save money it had to severely reduce its advertising expenditure.
The chocolate and cocoa business showed its first profit in 1907.
Unlike Lipton, Mazawattee never owned any tea plantations. They argued that this left them free to choose the best tea at auction, but it also left them vulnerable to fluctuations in commodity prices.
By 1913 much of Ceylon’s agricultural land had given way to the far more profitable rubber plantations. As the output of Ceylon tea was reduced, Mazawattee was forced to make up the difference with tea from India and Java. The only other option would have been to increase wholesale prices to untenable levels.
John Lane Densham retired as managing director and chairman in 1916, and Alexander Jackson (1857 – 1936) took over his roles.
In 1917 Mazawattee was likely the third largest manufacturer of packet tea, after J Lyons and Horniman & Co.
Joseph Densham (1883 – 1961) took over as chairman from 1936. That year the decision was taken to abandon the confectionery business.
Both the company factories were destroyed by air raids during World War II. The offices were transferred to 52 -54 Leadenhall Street. As late as 1948, the company was denied licence by the government to rebuild its factories. As such, Mazawattee was produced by Brooke Bond until 1952.
Joseph Densham retired as chairman in 1952.
Mazawattee was sold to Burton, Son & Sanders, confectioners of Ipswich, in 1953. The freehold factory at New Cross was sold to Johnson & Phillips, electrical engineers, for £190,000, and production was moved to premises at Thomas Street, Limehouse.
From this juncture Mazawattee was sold as an economy brand. The product ceased to be sold in 1965 and Densham & Sons was liquidated in 1967.
Mazawattee tea survived in South Africa until at least the mid-1980s as a catering brand for mine workers.
Horniman & Co was likely the largest tea firm in the world throughout much of the latter half of the nineteenth century. It was the first tea producer to package the product individually, at a time when tea was bought loose from a grocer.
John Horniman introduces packaged tea
John Horniman (1804 – 1893) was a Quaker from Reading, England. The Horniman family had emigrated from Germany to Devon in the 15th century. Quakers often promoted products such as tea and confectionery as an alternative to alcohol and tobacco.
Horniman had established himself as a tea dealer in Northampton by 1825. At this time, tea was a luxury good, mainly consumed by the rich.
During this period tea was sold loose by grocers. As such, it was frequently subject to adulteration by unscrupulous vendors. Horniman was the first to package his tea in individual packets from 1826. He branded it as Horniman’s Pure Tea.
Tea consumption in England rose rapidly from the 1840s onwards. The business was based on the Isle of Wight by 1846.
To cope with increasing demand, Horniman invented a crude tea- packing machine.
Horniman & Co was relocated to Philpot Lane in London in the late 1840s. The site was chosen due to its proximity to Mincing Lane, where tea auctions were held. The business had moved to Dalston Place by 1851. A warehouse was opened at Wormwood Street, nearby to Mincing Lane, in 1854.
The influential Dr Arthur Hill Hassall (1817 – 1894) of The Lancet vouched for the purity of Horniman’s product in 1859. Theirs was the only Chinese green tea examined by The Lancet that was found to be free of added colouring, which was commonly used to disguise poor quality.
The British government reduced the duty on tea in 1864. Horniman’s passed on the savings to the customer by lowering the price of their product. There were 2,280 outlets for their product by 1864.
The Horniman & Co warehouse contained the largest stock of duty-paid tea in London in 1867. Over 12,000 sq ft of warehouse floorspace was constantly in use.
Horniman & Co grows to become the largest tea business in the world
John Horniman retired in 1869. His son, Frederick John Horniman (1835 – 1906), took over management of the firm. A dynamic man, Frederick was intelligent and likeable.
Horniman’s Pure Tea had a strong export market by 1876, with high sales in Europe. The success of the firm was built on a dedication to quality, keen prices and strong marketing.
The tea warehouse on Wormwood Street burned down in 1879. The tea, on which duty had already been paid, was completely destroyed. The fire caused between £100,000 and £150,000 worth of damage (between around £11 million and £17 million in 2015 prices). Temporary premises were quickly arranged, and the firm was able to draw upon its tea reserves, so that only a few days of production were lost.
A new six-storey warehouse was built on the same site in 1880. By this time the firm had an annual sale of over five million packets of tea, and 4,000 outlets.
Previously the sole proprietor, Frederick Horniman took on his son, Emslie Horniman, as well as S R Brewerton and others as partners in 1889.
Horniman & Co was the largest tea firm in the world by 1890. Tea packet labels were printed in nine different languages. Over 5,000 chests of tea, weighing 100lbs each, were exported each week.
The founder, John Horniman, died in 1893. He had given generously to charitable causes throughout his life, but still left a personal estate of £320,000 (£37 million in 2015). His will donated much of his wealth to good causes.
Rival manufacturer of packaged tea, Mazawattee, had decisively overtaken Horniman in sales by 1892.
Horniman & Co sold ten million packets of tea annually by 1893. Tea was sourced from India, China and Ceylon, and only the young spring growths were used.
To house the artefacts he had amassed during his travels around the world, Frederick Horniman opened the Horniman Museum in Forest Hill, London, in 1890. He donated the museum to the public in 1901, and it remains a leading London attraction.
Horniman tea was sold through over 10,000 outlets by 1903.
Frederick Horniman died in 1906 with an estate valued at £421,628.
The business was taken over by his son, Emslie John Horniman (1863 – 1932).
Acquisition by J Lyons
Horniman & Co was acquired by J Lyons & Co, the leader in the packet tea market, in 1918 . Lyons wished to build their tea sales in the North of England, where Horniman was strong. Lyons opened the largest tea packing factory in the world at Greenford on the outskirts of London in 1920.
Emslie John Horniman died in 1932 with an estate valued at £317,605.
Horniman was marketed as the Lyons premium tea brand by the 1970s. It was their highest seller in South Wales. However the brand was eventually withdrawn from sale in Britain.
The brand is now owned worldwide by Douwe Egberts. In Spain, Hornimans leads the hot tea market with a 25 percent share. It is also available in Spanish-speaking South American markets. In Italy, Royal Tea traces its origins to Horniman & Co.
Part I, about the early history of J Lyons, can be foundhere.
During the post-war period, J Lyons developed the first business computer in the world. It introduced household-name brands such as Ready Brek, Maryland Cookies and Wimpy Hamburger.
Growth and continued success of J Lyons
J Lyons was the largest catering company in the world, with a capital of £10 million and exports to fifty countries. There were 33,000 employees and 230 tea shops in 1954.
The Corner House restaurants and hotels alone employed over 4,000 workers in 1951. On normal Bank Holidays the Corner Houses could expect to serve 250,000 meals.
Lyons was a global leader in sales of packaged tea. Lyons had a weekly production of seven million buns, 1.25 million lbs of bread and 12.5 million pieces of confectionery.
Clerical work became so extensive that J Lyons determined to build the first business computer in the world. Based on a computer at Harvard University, Lyons engineers introduced LEO (Lyons Electronic Office), after six years of development in 1954. Large computers had previously only been used for military or scientific purposes. The 5,000 sq ft computer could perform the work of 300 clerks working at top speed, with fewer mistakes.
Lyons introduced the American-style hamburger chain to Britain when it opened a Wimpy franchise in the basement of a Lyons tea shop on 277 Oxford Street in May 1954. There were 1,100 Wimpy outlets in 34 countries by 1973.
Lyons Pure Ground Coffee was the highest selling coffee in Britain in 1953. Lyons launched its standard market teabag brand, Quick Brew, in 1955.
A “Big Four” held 70 percent of the British tea market by 1956. Lyons held second place behind Brooke Bond.
Maryland Cookies were introduced from 1956. The company launched Ready Brek instant porridge in 1957, to outstanding success.
J Lyons was the third-largest soft drink producer in Britain by 1960. Rose Kia-Ora, a joint venture with Schweppes, held nearly half of the squash market.
Lyons sold its confectionery subsidiary to Callard & Bowser in 1961. With the growth of television advertising, middle-size sweet manufacturers were forced to consolidate in order to reach a scale capable of launching their own campaigns.
Lyons retired most of its tea distribution vans from 1962. The vans had delivered to independent grocers throughout the country. The company had reasoned that business was transferring towards the supermarkets. The decision was premature however, and allowed rival Brooke Bond to increase its market share at the expense of Lyons.
Lyons acquired Eldorado of Liverpool, the fourth largest ice cream manufacturer in Britain, in 1963, and rebranded its ice cream business as Lyons Maid. The takeover took its share of the ice cream market to 34 percent, and Lyons was the second largest ice cream manufacturer in Britain (after Wall’s) throughout much of the twentieth century. The FAB ice lolly was introduced in 1967. The Greenford ice cream factory was the second largest in the world by 1973.
The computer division required extensive capitalisation, so it was sold to English Electric in 1964.
Lyons had become the biggest supplier of pre-packaged cakes in Britain by 1966, and was the clear market leader with a 28 percent market share.
Lyons held more than two thirds of the packaged ground coffee market in 1966.
Throughout the 1960s J Lyons was joint third in the British tea market alongside Typhoo, with around 15 percent market share, behind Brooke Bond and the Co-operative Wholesale Society.
Lyons was probably the largest business in catering sales and supplies in Britain by 1969.
Lyons enters into decline
Lyons had seen its market share in tea decline to 13 percent by 1970, and it was far from the brand leader it once was. Quick Brew had an eight percent share of the popular tea market. It was strongest in the South of England, especially London, where it held 17 percent of the market. By this time Horniman and Black & Green had been positioned as the company’s premium tea brands. Horniman was the company’s biggest tea seller in South Wales, and Black & Green was strong in Manchester and the North West.
Lyons hotels held over 6,000 beds in 1970.
It was argued in The Spectator in 1968 that “You can grade the Lyons properties into four classes — redundant, non-profitable, underdeveloped — and Cadby Hall [the production centre].” The number of tea rooms had declined to 120 by 1969, and many were loss-making. The Coventry Street Corner House was closed in 1970. Between 1970 and 1972 the remaining tea rooms were converted into Jolyon Restaurants.
Cadby Hall was closed in 1972, with production relocated to Yorkshire and Northamptonshire. Nearly 3,000 staff were affected.
Lyons acquired Tetley Tea for £23 million in 1972. This gave Lyons the second highest market share for tea in both the British and American markets. In Britain Lyons now had 17 percent of the tea market, behind Brooke Bond on 40 percent.
Baskin Robbins, the ice cream manufacturer with 1,600 stores in America, was acquired for £16 million in 1973.
Lyons encountered financial difficulties following the global oil crisis of 1973. They had borrowed £250 million to finance acquisitions in the early 1970s, mostly from non-British sources. Foreign loan repayments became expensive as the value of sterling fell. As a result, the company began to rapidly divest its core assets just to meet is liabilities.
J Lyons dropped from the top 100 companies in Britain by market capitalization in 1974. The company had capitalization of £39.5 million and a turnover of £249 million in 1975.
The tearooms and corner houses fell prey to the more trendy coffee bars of Charles Forte, as well as the increasing appeal of fast food and ethnic cuisine. The last tea shop closed in 1976.
The 35 British hotels (with the exception of Tower Hotel) were sold to Forte’s Trust House Forte for £27.6 million in 1976. Forte was transformed from the largest hotel operator in Britain, to probably the largest in the world. Forte promptly recouped £11 million in a year by cutting costs. The Economist described the deal as “phenomenally successful” for Forte, who acquired the hotels at a “knock-down price”.
Wimpy, with 676 UK outlets, was sold off to United Biscuits for £7 million in 1976.
The Salmon and Gluckstein families were forced to relinquish voting control over Lyons in 1976. By allowing ordinary shareholders to have votes, they hoped to acquire more capital, which was desperately needed. Previously the families had held six to seven percent of company equity but 61 percent of voting shares. By this time Lyons had a market capitalization of over £40 million and sales of £650 million.
Lyons is acquired by Allied Breweries, and the businesses are divested
Lyons was subject to a friendly takeover by Allied Breweries which valued the company at £64 million in 1978. The merged entity was known as Allied Lyons. The Cadby Hall sites were demolished in 1983.
The remnant Lyons food businesses were sold off throughout the early to mid 1990s.
Ready Brek was sold to Weetabix in 1990.
Lyons Maid had been loss-making for several years, mainly due to increased competition following the entrance of Mars into the ice cream market. It was sold to Clarke Foods for £12 million in 1991. There were 800 employees in Greenford, Middlesex and Liverpool. Clarke Foods was acquired by Nestle in 1992.
In 1994 the Lyons coffee businesses were divested: ground coffee to Paulig of Finland and instant coffee to Philip Morris.
After acquiring Pedro Domecq in 1994, Allied Lyons renamed itself to Allied Domecq.
Lyons biscuits of Blackpool, with a staff of 780, was sold to Hillsdown Holdings in 1994.
Lyons Cakes was sold to Tomkins of America for £35 million in 1995. The business employed 1,700 people in Britain and Ireland. Meanwhile, the Tetley Tea business was subject to a management buyout, valued at £190 million.
Lyons Quick Brew and Red Label teas were still available in Britain until relatively recently. Lyons remains the highest-selling tea brand in Ireland, with over a third of the market. Lyons Maid ice cream has been rebranded as Nestle. Lyons brand cakes, biscuits and freshly ground coffee are still sold, although without the presence they once had.
Lyons’ major weakness was nepotism. As late as the 1950s, the board was populated exclusively by family members. The Financial Times ran a headline, “Too much Salmon is bad for Lyons”. A non-family member chairman was not elected until 1977. Although a public company, the majority of voting shares were controlled by the founding families until 1976. But by then, it was too late to save the company extant.
Watney’s Red Barrel was the highest-selling keg bitter in the world by the mid-1960s. The beer’s relaunch as Watney’s Red in 1971 represents one of the most famous failures of brand management in recent British history. What went wrong?
The birth of Red Barrel
Watney, Combe & Reid was formed by the amalgamation of three London breweries in 1898. It was the second largest brewing business in the world. The Reid brewery in Clerkenwell was immediately closed, with production concentrated at the Watney and Combe sites.
Watney Combe & Reid was highly profitable. When Charles Combe (1837 – 1920) died he left a net estate valued at £956,139, or over £350 million in 2020 prices. Claude Watney (1867 – 1920) left a net estate valued at £498,461.
Watney, Combe & Reid had begun to pasteurise at least some of its bottled beers by the 1920s in order to improve shelf life. A large new pasteuriser was imported from Bernsdorf in Germany in 1930.
Watney, Combe & Reid introduced the Red Barrel as their in-house trademark from 1930.
Watney, Combe & Reid was the first British brewer to introduce a draught “container beer” in 1931. The product differed from traditional cask beer as it was filtered and pasteurised and stored under pressure with carbon dioxide. The keeping conditions of the beer meant that it was able to withstand tropical heat and a lengthy shipping period, which rendered it ideal for export. The product was to prove a success and was soon found on Royal Navy ships, Cunard liners and Middle Eastern oil fields.
Watney’s Container Beer was introduced to the domestic market from 1935. It was initially sold at the East Sheen Lawn Tennis Club, where its keeping properties proved ideal for the intermittent trade of a sports club. Sales were expanded to other club outlets where it was impractical to serve cask beer.
Keg beer is introduced
Simon Harvey Combe (1903 – 1965) was appointed chairman of Watney, Combe & Reid in 1948. He was a forceful and picturesque man who shot his way out of German captivity during the Second World War and was awarded the Military Cross.
Following the war a large proportion of the managers of free houses had neither the time nor the experience to correctly handle cask beer, and quality had suffered. Customers increasingly turned to bottled beer, which, although more expensive, offered more consistent quality. Watney’s Red Barrel was introduced to public houses as a premium-priced bottled pale ale from 1950.
Tamplin & Sons of Brighton was acquired in 1953. The purchase brought with it 400 public houses in Sussex.
Flowers Breweries became the first brewery to mass market container beer from 1955. Named Flowers Keg, the brewery popularised the term as a generic name for container beer. At first Flowers distributed the beer to free trade outlets with insufficient sales to stock cask beer, such as golf clubs and private parties, or public houses with insufficient cellar space. Demand for the beer was to prove high however, and Flowers Keg was soon sold across the brewery’s tied estate and to rival brewers.
Watney, Combe & Reid introduced the keg version of Red Barrel to British public houses from 1956. It initially targeted free trade outlets, and cask beer continued to dominate the tied estate.
Watney, Combe & Reid acquired Mann, Crossman & Paulin to form Watney Mann in 1958. The merger allowed the group to reclaim its position as one of the largest brewers in Britain, and strengthened Watney’s position in hitherto underrepresented markets such as Essex, Luton and Coventry. Production would be concentrated at the Mortlake and Whitechapel breweries, which were modernised.
Watney’s Red Barrel that was the most widely-distributed keg beer by the late 1950s.
Watney Mann fights the takeover threat
Sears Holdings, controlled by Charles Clore (1904 – 1979), launched a £27 million hostile takeover bid for Watney Mann in 1959. Clore planned to modernise the “smoky, smelly, barnlike premises” of Watney Mann by introducing comfortable seating, removing the distinction between saloon and public bars, and improving the food offering. Pubs in areas with high footfall, such as city centres, would be sold off and converted into shops.
The directors of Watney Mann, descendants of the founding families, were horrified. Simon Combe called the proposal, “preposterous … deplorable for the brewing industry and a disaster for Watney’s”. The Evening Standard commented on the bid: “it threw the whole brewery world into confusion. Here was an outsider trying to storm his way in. It must not be allowed to happen”.
The attempted takeover was ultimately unsuccessful, but Watney Mann management was galvanised. Watney Mann’s properties were reassessed for the first time since 1929 and valued at £34 million. The Stag brewery site at Pimlico was sold off for £6 million. Watney sped up plans to modernise its tied estate of public houses, and Milner Gray (1899 – 1997) was hired to design a new corporate identity.
Watney Mann continued to expand by acquisition in order to meet demand for extra brewing capacity. 1960 saw the acquisition of Phipps of Northampton with 1,171 licensed premises for £11 million, Ushers of Trowbridge for £4 million and Wilson & Walker of Manchester, with around 1,000 public houses, for nearly £11.5 million. Watney Mann ended the year as the largest brewing group in Britain, with around 6,600 licensed premises.
Keg beer sales grew, initially at the expense of bottled beers. Customers, particularly the young, appreciated the consistent taste, and it commanded a premium price and superior profit margins. Watney’s Red Barrel was marketed heavily, and was the highest-selling keg bitter in Britain by 1961, with a category share of around 20 percent and estimated sales of around 150,000 barrels. It was brewed with Norfolk malt and Goldings hops, and was naturally matured for several weeks.
Watney’s Red Barrel was exported to northern France and Belgium from 1962. It was brewed to a higher strength of 5.2 percent ABV.
Watney Mann had 34,000 free trade accounts by 1963. By the end of 1963 traditional cask beer had been phased out from the 2,000 tied houses in London and the South of England. The Manchester and West Country houses were earmarked to follow.
A modified version of Watney’s Red Barrel, reformulated to suit the American palate, was successfully introduced in the United States from around 1964. Nearly 5,000 barrels of Red Barrel were exported to Northern Europe in 1965. Licensed production of Red Barrel began at the Murphy’s brewery in Cork, Ireland, from 1966. It was claimed that Watney’s Red Barrel was the highest-selling keg beer in the world by 1966.
In 1968 Peter Crossman (1908 – 1989), chairman of Watney Mann, predicted the extinction of cask beer within ten years.
Watney Mann continued to expand by acquisitions throughout the 1960s. The takeover targets included Morgans Brewery of Norwich (1961), Bullard & Sons and Steward & Patteson of Norwich (1963) with 1,800 public houses and Drybroughs of Edinburgh (1965) with 140 tied houses for £2 million.
By the mid-1960s Peter Crossman was convinced that the British beer market was saturated. He decided to expand in Europe. The Delbruyers brewery of Chatelet was acquired in 1966 and the site was used to brew Watney’s Red Barrel. This was followed by the acquisition of Brasseries Vandenheuvel of Brussels with 1,740 outlets (1968) and Maes with 700 outlets (1969) to position Watney Mann as the second largest brewer in Belgium.
Watney Mann announced plans to centralise production at its breweries in Mortlake, Manchester, Norwich and Edinburgh in 1970. The Trowbridge, Whitechapel and Brighton breweries would be closed. Production of cask ales had largely ceased, and local names would be phased out in favour of the Watney brand. A range of 80 beers in 1969 had been rationalised to 35 by 1971.
Watney’s Red is introduced
Watney’s Red Barrel volumes peaked in 1969, and had then entered into decline. Sales had fallen behind keg rivals Double Diamond and Whitbread Tankard. Double Diamond offered greater taste consistency than Red Barrel, as it was only brewed in one place: Burton upon Trent. It was also believed that its sweeter taste and higher strength rendered it more appealing. Meanwhile it was claimed that Red Barrel suffered from inferior marketing.
Julian Crawshay (1923 – 2009), the marketing director for Watney Mann, declared that “a beer developed for the 1950s is not right for the 1970s”. A replacement for Watney’s Red Barrel was announced. Following experimentation with 30 different recipes, Watney’s Red was introduced in April 1971. The new product was a “completely different beer”, designed to be darker, fizzier and slightly sweeter. It was smooth with a creamy head and good lacing. It was designed as a session beer, with greater drinkability and less of an aftertaste. Crawshay explained, “we were looking for the customer who settles in his local pub and drinks eight or ten pints in an evening”. The Economist reported that the new beer tasted “bland”.
The Watney’s Red product launch was supported by a £500,000 television and poster campaign. Controversially, portrayals of Castro, Khrushchev and Mao were used alongside with the tagline, “long live the Watney’s Red revolution”. Cowl conversion on 30,000 Red Barrel keg dispensers cost a further £100,000.
Watney’s Red initially enjoyed a 15 percent sales boost against Red Barrel, and was the brewery’s most profitable beer, although Watney’s Special Bitter enjoyed slightly higher sales . Around 350,000 barrels of Watney’s Red were sold in 1972, accounting for around 20 to 25 percent of Watney Mann sales.
The public backlash
Watney Mann was acquired by Grand Metropolitan, the owner of Truman’s Brewery and a host of hospitality concerns, for £405 million in 1972. At the time it represented the largest takeover in British history. Following the takeover Grand Metropolitan controlled one third of London’s public houses.
In an effort to lower production costs Watney Mann began to brew using a grist of up to 50 percent raw barley with added bacterial enzymes from 1971. The proportion of raw barley was increased to up to 70 percent of the grist from 1973.
Following a successful launch the sales of Watney’s Red began to decline, and remained stubbornly behind those of rival Double Diamond. The recipe was adjusted twice to increase ABV and original gravity in 1973. Richard Boston (1938 – 2006), a beer writer for The Guardian, derided the tactic as “desperate”, and argued that “Watney’s themselves are becoming uncomfortably aware that people don’t like their beer”.
Meanwhile, the Campaign for Real Ale (CAMRA) pressure group had been established in 1971. CAMRA rallied against keg beers, which it argued lost much of their flavour due to the process of filtration and pasteurisation. Watney’s Red was subject to particular criticism, and the company was derided as “Grotney’s”. A Watney Mann official dismissed CAMRA members as a “cranky bunch”, and cited market research that supposedly demonstrated that the public preferred keg beer.
A change of course for Watney Mann
Concerned by criticism of the company, as well as by falling sales of Watney’s Red, management conducted a market research study in mid-1974. Watney Mann acknowledged that the introduction of Watney’s Red had “backfired”. In a bid to rescue the company’s reputation, greater autonomy was devolved to nine regional subsidiaries, and local beers began to be promoted from 1974. Scheduled brewery closures at Trowbridge and Halifax were reversed. Discontinued local brands such as Tamplins were revived, and efforts were made to reach out to CAMRA.
Ben Truman Export was introduced alongside Watney’s Red to function as a premium keg bitter.
Watney’s introduced Fined Bitter, a cask beer served under pressure, to its London tied estate from 1976. A Watney’s spokesman commented, “this is a commercial move, not a labour of love. There is now a demand for traditional beers and we are climbing aboard the bandwagon”. The beer was later renamed Stag.
In 1977 a Watney’s spokesman admitted, “we used to think it was good to be big. Today we think it’s good to be small”.
Watney’s London Bitter, a traditional unpressurised cask bitter, was introduced from 1978.
Watney’s Red was discontinued in May 1979. Around half of Watney’s tied estate sold real ale by this time.
14 different cask ales were produced by Watney breweries across Britain by 1980. Webster’s Yorkshire Bitter, usually in cask format, became the core ale brand for Grand Metropolitan from 1980.
Plastic and chrome public house decor began to be phased out in the late 1970s. New pub signs emphasised local and traditional beers. The Red Barrel logo was discontinued from 1982.
Ruddles Brewery of Rutland was acquired in 1986 to increase Grand Metropolitan’s presence in the cask ale market. The brewery received a £5 million investment, and a further £1 million was spent on advertising the brand.
The Belgian brewing interests were divested for £28 million in 1986.
Drybroughs, with 187 public houses, was sold to Allied Lyons for £48.5 million in 1987.
Grand Metropolitan sold its brewing interests to Courage in 1991. The Watney’s brand disappeared from Britain shortly thereafter. Watney’s Red remained available in Belgium, France and Spain into the early 1990s. Watney’s Scotch Ale is still sold in Belgium. Mann’s Brown Ale remains available throughout Britain.
J Lyons had become the largest catering business in the world within 30 years.
J Lyons is established, and the first tea rooms are opened
Barnett Salmon (1829 – 1897) and Isidore Gluckstein (1851 – 1920) established a successful chain of tobacconists.
Montagu Gluckstein (1854 – 1922), a salesman for the firm, lamented the poor state of catering at trade exhibitions. He suggested that Salmon & Gluckstein enter into the business of non-alcoholic refreshment. A trial was established whereby the business catered for the Newcastle Exhibition of 1887. Contracts for other exhibitions soon followed.
J Lyons & Co was established as a public company with a capital of £120,000 in 1894, in order to pursue catering further. The Lyons name was adopted to distinguish the company from the Salmon & Gluckstein business. The original stakeholders were Montagu Gluckstein, his brother Isidore Gluckstein, brother-in-law Barnett Salmon (maternal grandfather to Nigella Lawson) and distant relative Joseph Lyons. Montagu Gluckstein was the de facto chairman of the business.
The first Lyons tea shop opened in September 1894 at 213 Piccadilly. It had 200 seats and a £30,000 lease. After a year the shop had made a profit of £11,400, and the company was able to pay a dividend of ten percent.
The early tea room exteriors were enticing and extrovert, and the interiors were often glamorous, and intended to evoke the great Victorian exhibitions and Parisian cafes.
The Lyons tea shop girls went on strike in protest against low wages in 1895.
J Lyons establishes Cadby Hall
Cadby Hall was opened in Hammersmith to centrally produce baked goods for the company’s 17 tea shops from 1896. There were 37 tea shops in London by 1900, and expansion had begun in the provinces, with six branches in Manchester, four in Liverpool, and two in both Leeds and Sheffield.
Quality was good and prices were reasonable. The tea rooms were particularly popular throughout the daytime with lower middle class office workers. Cinema and theatre-goers patronised the chain on evenings.
The first Lyons Corner House was opened on Coventry Street in 1909. The Corner Houses were much larger than the tea rooms, with a greater appeal to the middle classes. Live bands and an informal atmosphere helped to cement their popularity. The Coventry Street outlet became the Lyons flagship outlet, and seated 2,000 diners on multiple floors. It was the largest restaurant in the world. A second Corner House, capable of seating 1,200 diners, was opened at the Strand in 1915.
J Lyons was one of the largest caterers in the world by 1911. Half a million meals were served every day through 200 shops and restaurants. The company employed over 12,000 people, including 2,000 people at Cadby Hall. The Cadby Hall works covered ten acres and included sixteen bakehouses, five cold storage rooms and three butchers’ shops.
20,000 people were employed by 1913. J Lyons was the largest baker in London, the largest tea merchant in the world and the largest restaurant operator in the world.
J Lyons dismissed all naturalised German and Austrian employees from its staff in 1914.
J Lyons also expanded into hotels, building the Regent Palace Hotel in London at a cost of £600,000. Opened in 1915, it was the largest hotel in Europe, with 1,028 bedrooms.
Lyons tea was far and away the market leader by 1915: five million packets were sold every week by 160,000 shopkeepers. The company accounted for one in four cups of tea sold in London.
Lyons had a capital of over £2 million by 1917.
Tea, coffee, bread, cakes, ice cream and groceries which had originally been produced for the tea rooms began to be sold directly to the customer, all manufactured at the company’s Hammersmith site.
In 1918 Lyons acquired two leading packet tea companies, positioned second and fourth place in the market respectively: Horniman of London and Black & Green of Manchester. The acquisitions were intended to increase Lyons’s market share in the North of England: Horniman was strong in Yorkshire and G&B strong in the North West.
The company had a share capital of £3.5 million by 1919. By this time Lyons was likely the largest catering company in the British Empire. There were 182 tea shops by 1919, making it easily the largest chain of its kind in the country.
Largest caterer in the world; Greenford plant is established
Cadby Hall was struggling to meet demand by 1919, so Lyons acquired a 30-acre freehold manufacturing site at Greenford, on the outskirts of London. Lyons opened the largest tea packing plant in the world there in 1920. Coffee, cocoa and confectionery production were also transferred to Greenford. It was the sixth largest manufacturing site in Britain.
J Lyons was the largest catering business in the world by 1921. Cadby Hall boasted the largest bakery in the world.
The Trocadero Restaurant was acquired in 1921.
There were over 22,000 employees by 1922. There were 160 Lyons tea shops in London, and a further 50 throughout Britain.
It was calculated that seven million people drank Lyons tea each week in 1922.
Lyons began construction on the Cumberland Hotel at Marble Arch, the largest hotel in Europe, in 1922. It had 1,500 rooms and a Corner House.
The Coventry Street Corner House was extended in 1923 to create what was likely the largest restaurant in the world, with seats for 4,500 diners. It also boasted the largest chocolate shop in the world. It was open 24 hours a day.
Ice cream manufacture at Cadby Hall had reached the mass production scale by 1923.
Lyons was the 20th largest company in Britain by 1930, with a market value of £12.1 million and 30,000 employees. It was the largest catering company in the world. Over ten million meals were sold each week. Lyons held 14 percent of the packet tea market, with over 1.25 million packets sold every day. 600,000 Swiss rolls were sold every week.
The teashop chain continued to grow strongly until the onset of the Great Depression. Teashop losses between 1934 and 1938 totalled £374,000. Despite this, due to its manufacturing and hotel concerns, the company remained the largest catering company in the world in the latter half of the 1930s.
Lyons directly employed over 42,000 people by 1937.
Lyons produced 3.5 million gallons of ice cream in 1939.
Lyons had 253 tea rooms by 1939. Due to wartime labour shortages, self service was introduced to the tea rooms from 1941, and rolled-out across the chain from 1945.
J&B Rare is one of the highest-selling Scotch whiskies in the world. Its key markets are in Southern Europe, South Africa and the United States.
J&B Rare is introduced to the United States
Long-established London wine merchants Justerini & Brooks introduced J&B Rare, a blended Scotch whisky, from 1936.
J&B Rare was conceived of as an export brand. Its straw-gold body, and light, smooth, delicate character was designed to appeal to the American taste for rye whiskey. It is made with up to 50 percent single malt whisky, including Knockando, Auchroisk, Strathmill and Glen Spey.
Charles Guttman (1893 – 1969) of the Paddington Corporation was appointed as the United States distributor, and he initially established the brand in the New York City area.
Justerini & Brooks merged with Twiss, Brownings & Hallowes to form United Wine Traders in 1952.
Abe Rosenberg (1908 – 1985) became a partner in the Paddington Corporation from the mid-1950s. He began to expand J&B Rare distribution outside of its New York City heartland into the wider United States. 70,000 cases of J&B Rare were sold in 1954.
J&B Rare would compete fiercely with Cutty Sark, another Scotch whisky tailored for the American market which had been introduced by Berry Brothers, wine merchants of London, in 1923.
Justerini & Brooks refused to bolster sales by price-cutting, and J&B Rare was the most expensive non-aged Scotch whisky on the market.
Sales grew quickly as J&B Rare benefited from a shift in American tastes away from heavier Scotch whiskies such as Black & White and Ballantine’s, towards lighter blends. 700,000 cases of J&B Rare were sold in the United States in 1961, and it was the leading Scotch whisky in the New York City area.
International Vintners & Distillers
United Wine Traders merged with Gilbeys to become International Vintners & Distillers (IDV) from 1962. Gilbeys’ strong international distribution network helped to establish J&B Rare in Australia, New Zealand, Canada, South Africa and Ireland.
J&B Rare became the highest-selling Scotch whisky in the United States, with one million cases exported in 1962. The New York City area remained the heartland of the product. The brand remained virtually unknown in its native Britain.
Two million cases of J&B Rare were exported to America in 1967. J&B Rare was exported to 84 countries.
2.7 million cases of J&B Rare were sold in 1971, accounting for a substantial 55 percent of IDV profits.
IDV was acquired by Grand Metropolitan in 1972.
J&B Rare was the seventh highest-selling spirit in the United States by 1974, and the bestselling Scotch.
Rising sales of J&B Rare helped to render Grand Metropolitan the second largest distiller of branded Scotch whisky in the world by 1977. J&B Rare held ten percent of the global Scotch whisky market. Justerini & Brooks were awarded with a Queen’s Award for Export Achievement in 1978.
J&B Rare was the second highest-selling Scotch whisky in the world by the mid-1980s.
J&B Rare was the fifth highest-selling spirit in the world by 1993.
Yorkshire Tea is the second highest-selling tea in Britain, with a 23 percent market share as of 2017.
Historically the leading tea brands in Britain have all been owned by large, wealthy corporations. It was argued that these companies had an advantage over small regional concerns due to marketing, distribution and technical expertise, as well as cost-scale efficiencies.
Many people would struggle to differentiate between Tetley, PG Tips and Typhoo in a blind taste testing. Twinings is different from the more mainstream three, as it is a more premium product.
Launched in 1977, Yorkshire Tea is a basic but strong black tea. It is a blend of Kenyan, Rwandan and Assam leaves. In taste and aroma it is of higher quality than Tetley, PG Tips and Typhoo, but inferior to Twinings. On price, it broadly matches PG Tips. So how did the family owned Yorkshire Tea brand rise to fourth place in a UK tea market dominated by large companies? Here are my ideas:
Value: the product offered quality at a moderate cost. Due to this, it rapidly established a cult following.
Technical innovation: the owner, Taylors of Harrogate, distributed slightly different blends in each UK region, in order to best suit the local water supply. (This ceased in 2000 when a Hard Water version was launched).
Branding: the packaging of the product evoked imagery of old rural Yorkshire. It tied in to a desire for provenance, and smaller-scale craft production. The slogan on the box, “Let’s have a proper brew” suggests authenticity due to the product’s local-ness and smaller scale production. It also indicates that its competitors do not offer this. Also the name, “Yorkshire Tea” is no-nonsense and straight forward.
Advertising: The brand was not advertised on television until 1997, when it sponsored Heartbeat. The association was canny: Heartbeat was a programme that was strongly associated with rural Yorkshire.
Marketing: The tea was offered for free to branches of the Women’s Institute until 2011. This gave women (who usually do the grocery shopping) a chance to taste the product.
The Grocer also suggest that Yorkshire Tea has a “stronger taste profile” than its competitors.
By 1994, five million cups of Yorkshire Tea were drunk each day. By 2001 this had grown to nine million cups. The brand had sales of £46.1 million in 2010. Value sales grew an impressive 66 percent between 2009 and 2014.
Business in the 1970s was driven by the idea that bigger was always better. Perhaps no industry demonstrated the application, and folly of this notion, better than the brewing industry.
Beginning in the Victorian era, two brewing names achieved national distribution in Britain: Bass Pale Ale and Guinness Stout. Guinness owned no pubs at all, but the popularity of the Bass and Guinness brands saw rival brewers stock their products in their pubs. Like bottled beers in pubs today, these were premium products, selling for a higher price than the local draught bitter.
In the 1950s, a Canadian businessman called Eddie Taylor began to market a lager called Carling in the UK. Taylor acquired breweries and their tied estates to provide an outlet for Carling, and he had 2,800 pubs by 1960. He stopped in 1967 when he created Bass Charrington, an entity that owned 11,000 pubs. By pushing just one megabrand in a fragmented industry, Taylor believed he could achieve a dominant position in the UK beer market. He was right: by the 1980s Carling was the highest selling beer brand in the UK, and it hasn’t slipped from that position since.
Taylor kickstarted a wave of consolidation in the UK beer market to form the Big Six brewers (plus Guinness). In the 1960s, marketing spend was put behind single keg ale brands such as Worthington E (Bass), Younger’s Tartan Special (Scottish & Newcastle), Courage Tavern Keg, Whitbread Trophy, Double Diamond (Allied) and perhaps the most notorious, Watney’s Red Barrel. The new keg ales were easier to look after, and had larger profit margins, and there ubiquity quickly spread.
Watney Mann ranked alongside the biggest brewers of Bass and Ind Coope/Allied. It was the most aggressive in promoting its main product. In 1971, it relaunched Red Barrel as Red, with a marketing campaign heralding the “Red Revolution”. The marketing campaign featured actors made up to look like Castro, Mao and Khrushchev sipping the product. Watney pubs were painted red.
Meanwhile, as the brewers pushed these major products, they closed down small local breweries, and stopped brewing many of the popular local ales. This provocation eventually caused a consumer backlash. The new keg ales were fizzy, overpriced and bland. Local ales were often more flavourful, and besides, people preferred to have a choice. They resented being forced to drink something else. In 1968, the Competition Commission found that a single brewer, Courage, owned 80% of the pubs in Bristol!
CAMRA was formed in 1971 to resist the blandification of consumer choice. Today there are hundreds of microbreweries, and consumers haven’t had as much choice in beer since the Victorian era. The mass keg ale market (John Smith’s, Tetley, Worthington) is declining. The mass lager market is declining, with preference switching to smaller, premium brands such as Peroni Nastro Azzurro, or cask ales. Carling remains the highest selling beer.
The notion of craft and premium quality food and drink did not arise from the ether. In this post I attempt to trace its roots in recent history.
With the end of post-war rationing in Britain, a range of super-premium restaurants with a focus on local provenance opened in the North West of England. Beginning with Sharrow Bay in 1960, they catered to a very small segment of the population, but their growth indicated a desire for authentic, quality food.
In the 1970s the British public were enamoured with the wave of packaged and processed products: Watney’s Red Barrel ale, yoghurt, frozen food etc. They were expensive, but people were prepared to pay a premium for it because it was new, and perceived as “better”.
The late 1970s and 1980s saw the growth of the real ale movement, which advocated small scale production, locality and traditional production methods. But the provenance doesn’t even have to be your localness: just provenance in general seems to suffice. One had only to witness the growth of Whitbread’s Stella Artois in the 1980s and 90s, a beer marketed with French language advertisements, despite being brewed in the UK, and with origins in Flemish speaking Belgium.
Another interesting example is Jack Daniel’s whisky. With a monochrome label and adverts, the product was able to successfully foster a small scale image, “craft” image. This consumer “backlash”, as it were, stems from a new-found consumer cynicism. The consumer knows that most products they buy in their supermarket are owned by multi-national conglomerates. Many people do not like giving their money to perceived faceless corporate entities. Any product that seems to defeat or circumnavigate this system, and treat the consumer like an adult, seems to be on to a winner. People will pay far more than net worth for a perceived craft product because it makes them feel good for two reasons: supporting local or craft production, and avoiding the multinationals. I don’t think this applies to the whole population, but I think it applies to a good number.
The examples are endless, but I will give just one more: Yorkshire Tea. The name “Yorkshire” implies traditional craft methods and localness. The name isn’t faceless and bland like competitor brands PG Tips and Tetley Tea. The brand wears its provenance proudly, and isn’t ashamed of its local origins. The brand came from nowhere in the 1990s to becoming the third highest selling tea brand in the country by 2007. It wasn’t until 2000 that it became a nationwide supermarket staple. The brand has a surprisingly modern heritage: I doubt that many of its consumer base would estimate that the brand was only launched in 1977. Meanwhile rival brands such as PG and Tetley patronised the audience with television adverts that starred cartoon characters, chimpanzees and monkey hand puppets. The consumer goods advertising market has matured. Treating consumers like idiots works far less well than it used to. Consumers appreciate being treated like human beings.
The premium/provenance market shows little sign of slowing. Borough Market in London is now firmly established as a destination for quality food with provenance. The celebrity chefs have long promoted locality and quality. Farm shops are now ubiquitous in many English villages.
Craft brands need to be careful to maintain their image. Stella Artois sold for the same price as other premium lagers, despite its slogan of “Reassuringly expensive”. Consumers get wise to a brand that seems inauthentic, and it irritates them as an insult to their intelligence. Stella is now, frankly, a commodity lager, and its premium positioning has largely been given over to the Italian Peroni brand, which had spread largely through word of mouth.