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A history of the largest tea companies in Britain

The highly competitive nature of the British tea industry has seen a number of different market leaders emerge at different points in time.

Horniman & Co was the first company in the world to package tea (as opposed to loose-leaf sales by grocers). By 1867 they claimed to have the largest stock of tea in Britain in their warehouses. By 1880 they sold over 5 million packets a year. By 1890 they had export sales of 500,000 lbs a week.

By 1892 Horniman had been overtaken by Mazawattee, who sold over 14 million packets of tea each year. Mazawattee had introduced a brand that was blended entirely from fashionable Ceylon tea leaves. They also advertised more heavily than Horniman.

By 1897 Lipton & Co claimed the largest sales of tea in the world, with one million packets sold each week. Lipton had acquired their own tea plantations in Ceylon, and by cutting out the middleman, were able to offer lower prices to the consumer.

In 1903 John Sumner began to package a new blend which used only the tips of the tea leaf. With the distinctive name of Typhoo, it had lower tannin levels and a higher caffeine content, Sumner claimed digestive properties for his product.

By 1915 J Lyons & Co sold 5 million packets of tea each week, and were far and away the market leader in Britain, stocked in 160,000 outlets. In 1922 they claimed that 7 million people drank their tea every week.

In 1923 the Co-operative Wholesale Society (CWS) claimed that it was the largest tea business in the world, with a sale of over 60 million lbs of tea every year. By 1932 this figure had increased to 100 million lbs a year.

In 1939 the CWS was the largest tea blender and distributor in the United Kingdom, controlling around 25 percent of the supply. It was followed by Lyons, Brooke Bond and Allied Suppliers (who controlled Lipton).

CWS tea sales declined with the rise of the supermarket chains: the new chains saw CWS, who operated their own grocery stores, as a rival, and refused to stock their tea.

By 1957 Brooke Bond was probably the largest tea company in the world, with around one third of the British and Indian tea markets.

In the 1960s, Tetley grew from a minor player to a major force in tea after it pioneered the use of the tea bag in Britain.

Brooke Bond was still the largest tea company in the world when it was acquired by Unilever in 1984. Unilever had acquired Lipton in 1971.

Today Lipton is the largest tea brand in the world, with most production centered on a single site in Dubai.

So long, Ceylon: Mazawattee Tea Co

Mazawattee was the highest selling brand of tea in the world.

John Boon Densham (1815 – 1886) was a Plymouth chemist who moved to Croydon in the 1860s. With a Mr C Lees he formed Lees & Densham, wholesale tea dealers at Philpott Lane, where the bulk of Britain’s tea auctions took place.

Lees divested his stake in 1870 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.

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.

By 1892 over 14 million packets of Mazawattee tea were sold every year, through 5,000 outlets. By this time sales had overtaken those of Horniman, who had led the market since at least the 1860s.

A seven storey factory had been erected at Tower Hill, London by 1894. In 1896 the Mazawattee Tea Company was formed with a valuation of £550,000 (about £66 million in 2015). John Densham’s sons, John Lane (1853 – 1918) and Benjamin (1847 – 1929), were joint managing directors.

Mazawattee tea was the largest tea brand in the world by 1896. 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.

In 1901 a new plant was built at New Cross, and the firm diversified into chocolate confectionery. It was the largest and best equipped tea processing plant in the world. The factories and warehouses covered over four acres, and over 1,000 workers were employed. The relocation, including new machinery, represented an investment of over £400,000 (around £45 million in 2015).

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.

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.

In 1936 Joseph Densham (1883 – 1961) took over as chairman. 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.

In 1953 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 Mazawatee was sold as an economy brand in outlets such as Woolworths. The brand ceased to be produced in 1965 and Densham & Sons was liquidated in 1967.

The brand was revived in 2016 by a new business, the Mazawatee Tea Company.

The rise and fall of Marks & Spencer (1955 – 2001)

Read part I of my history of M&S here.

In 1955 Marks & Spencer employed 28,403 people.

In 1963 M&S was the fifth most highly valued stock in Britain, at £435 million. By 1970 this value had risen to £615 million. In 1968 M&S overtook Woolworth as Britain’s leading retailer in terms of both sales and profits.

In 1972 M&S employed 37,094, putting it just outside the top 50 employers in Britain. In 1973 the company enjoyed a turnover of £360 million and employed capital worth £160 million.

M&S began to sell frozen food from 1972. By 1973 convenience food was being sold at 100 stores.

It was in the early 1970s that M&S began its first foreign expansions. In 1973 the company acquired a 50 percent stake in three Canadian clothing retailers. A controlling interest was acquired three years later.

In 1975 a store was opened in Paris. By the mid-1990s this store ranked among the company’s top ten worldwide in terms of sales and profitability.

1982 sales were just under £2.2 billion. By 1982 M&S, with a market capitalization of $3.7 billion, was the fifth highest valued public company in Europe.

In 1984 the first non-family member was appointed as chairman and chief executive.

The first location outside a town centre was opened in Gateshead in 1986.

In 1988 the company made two American acquisitions, Brooks Brothers, the clothing retailer, and Kings Supermarkets. Brooks Brothers cost M&S $750 million, and included 47 stores.

By 1990 M&S operated 275 stores in Canada and eight stores in France. That year the company opened its first store in Spain.

In 1992 M&S employed 55,750 people. It was the twentieth largest company employer in Britain.

In 1994 M&S was the only retailer in the world with a AAA credit rating. The retailer had a reputation for quality and value for money. It boasted a turnover of over £5 billion and 679 stores.

In 1999 profits took a sudden slump. Excessive profit margins eroded customer loyalty. The company withdrew from Canada that year.

In 2001 M&S announced a radical restructuring of its operations. The UK business was revamped and its US retail operations and company owned stores in Europe were divested.

The rise of Marks & Spencer (Part I)

Marks & Spencer is a British retail chain specialising in clothing and food.

Marks & Spencer’s origins date to 1884, when Michael Marks, a Russian-Jewish immigrant, set up a “Penny Bazaar” in the Kirkgate open market in Leeds, Yorkshire. Marks sold haberdashery goods, and no item cost more than one penny.

Marks soon opened a stall in Leeds’ covered market, which was open seven days a week. Outlets were soon opened in the booming cotton towns, such as Warrington, Birkenhead and Wigan.

Marks & Spencer Penny Bazaar in Cardiff
Marks & Spencer Penny Bazaar in Cardiff

The steady expansion of the business saw Marks recruit Thomas Spencer, a cashier, as a partner in 1894. By 1901 there were 12 shops and 24 stalls in covered markets.

In 1903 Spencer retired, and Marks & Spencer became a limited liability company.  Marks died in 1907, and his son Simon took over the business, which now boasted over 60 retail outlets.

In the 1920s, Simon Marks noted the rapid growth of the low-price Woolworth chain. In 1924 he undertook a fact-finding mission to the US. What he learned there was to revolutionise the business.

Marks cut out the wholesaler, and decided to deal directly with manufacturers. On the basis that it was the merchant rather than the manufacturer who knew the customer best, Marks & Spencer would design its own clothing and goods, and then find a contractor who could produce to the specifications and cost.

The First World War put an end to the penny pricing system, but in 1924 a new 5 shilling price-ceiling was introduced.

By 1926, Marks & Spencer had 125 stores, and floated on the stock exchange to fund further expansion. That year, Marks was joined by his brother-in-law, Israel Sieff, as joint managing director.

By 1935 Marks & Spencer employed 11,555 people, placing it as the 55th largest employer in Britain.

Opening new stores, and the redevelopment of existing stores, allowed Marks to reposition the company from a working class market to a classless one. By the mid 1930s, M&S had repositioned itself so that Woolworth was no longer a competitor. Symbolically, a state-of-the-art outlet was opened on Oxford Street, London, in 1938.

The company began to concentrate on clothing, which accounted for two thirds of sales by the 1930s. By 1938, 80 percent of sales were of clothing, and 20 percent were in food. The company began to position itself inbetween the value stores and the department stores. By 1939 the company was able to boast that 92 percent of its goods were manufactured in Britain.

Brewing up a storm: a history of Samuel Webster & Sons of Halifax

By the end of the 1980s, Webster’s was one of the highest selling bitter brands in Britain.

The Fountain Head Brewery was founded in 1830 by John Mitchell in Ovenden, a small village just outside Halifax, West Yorkshire.

Samuel Webster (1813-1872) took over the lease in 1838, aided by money lent by his uncle, Isaac Green. The annual rent was £100 (around £10,000 today). After one year, he obtained a 21 year lease on the brewery. In 1845, Webster bought his first pub, the Lane Ends in nearby Wheatley.

Webster had been raised as a Congregationalist, but as the faith frowned upon alcohol he switched his allegiance to the Church of England.

In 1851, Webster bought the brewery and a 26 acre farm for £2,500 (around £300,000 today). The first recorded use of the Fountain Head brewery name was also that year.

By 1860, Webster’s three eldest sons, Isaac, George Henry and Samuel Green, had been admitted into the business as partners, and the company began trading as Samuel Webster & Sons.

The brewery was valued in 1871 at between £18,000 and £20,000 (around £2 million today). By this time it was producing around 400 barrels a week and employed 17 men. The company had around a dozen tied houses and a substantial free trade.

Samuel Webster died in 1872. He had no public career, and his life was dedicated to his business. As such, he received no obituary in any of the local newspapers of the day.

The brewery was rebuilt between 1872-3. At least 49 houses were acquired between 1872 and 1878.

Webster’s became an incorporated company in 1890, with a valuation of £300,000 (equivalent to £33.6 million today). By this time it had an estate of 108 tied houses. By 1895 Webster’s had the largest number of houses in the Halifax area with 74, compared to 56 for Joseph Stocks and 55 for Thomas Ramsden.

The company’s flagship beer, Green Label, was launched in 1928. A filtered, bottled beer, it was in the local “light mild” style. A surviving example of this style is Timothy Taylor’s Golden Best. Beers of the style are characterised by a golden colour and a relatively low ABV.

In 1929, the company and its assets were valued at £468,833 (£26 million today). Accounting for inflation, the company was worth less than in 1890. This was because the temperance movement had gained significant traction in the Calderdale area, and the local authority would sometimes requisition pubs and close them down.

Due to these difficult trading circumstances, Webster’s acquired the Halifax brewer Joseph Stocks in 1933 for £64,000. Stocks brought with it some 90 tied houses.

By 1937, output was 40,000 barrels a year, with the brewery capable of supplying 1,000 barrels a week during busy periods such as Christmas and Easter. That year, the company ceased to use dray horses for deliveries, mainly due to the extremely hilly nature of the surrounding area.

By 1960, the board of directors were concerned about the possibility of a takeover bid. To prevent against this, they invited the national brewer Watney Mann to take a 25 percent stake in the company. From this period, Webster’s brewed and sold Watney’s Red Barrel draught keg beer throughout their estate. Lager was introduced to the estate from 1962, following agreements with Ind Coope and Tuborg of Denmark.

Local television advertising began in 1961, on Granada.

Because of the popularity of its light mild, Webster’s had never needed to produce a bitter beer. However, as it began to expand outside of its traditional trading area, this gap in it portfolio became more apparent. In April 1961 the company launched Pennine Bitter.

The company closed its maltings down in 1963, as it was able to buy malt externally at a lower price than it could produce for itself.

In 1966 the company took over J Hey of Bradford and 73 houses for £1 million (£16.3 million today). By 1967, Webster’s had an estate of 320 tied houses and 12 off licenses, with a market capitalization of £6 million (£95 million today).

In 1973 the company embarked on a £2 million expansion programme. New brewery buildings and plant cost £650,000, and a chilling and filtering department expansion cost £250,000. The refurbished brewery was built along the same lines as the J W Cameron brewery in Hartlepool.

That same year, Watney Mann offered £18 million for the 73 percent of Webster’s that it did not already own. The idea was to make Webster’s a poison pill to make Watney too large for Grand Metropolitan to acquire. The takeover was friendly, with the approval of the Webster family, who still owned 20 percent of shares. Watney’s poison pill strategy was unsuccessful however, and it was itself acquired by Grand Met later that year.

In 1978 a new lager plant was started, built for £4 million and capable of producing 9,600 barrels a week. Initially it brewed only Carlsberg, but later Budweiser and Foster’s.

By the early 1980s, Webster’s had an annual production of around 400,000 barrels, and the brewery employed around 600 people. With Grand Met’s nationwide distribution, Webster’s turned into a national brand. In 1986, Grand Met closed down the Wilson brewery in Manchester and moved production to the Fountain Head brewery. In 1987, Fountain Head capacity was extended from 1 million to 1.3 million barrels a year.

Grand Met divested its brewing assets in 1990, and Webster’s became part of Courage. By that year Webster’s had an annual revenue of around £100 million and claimed 7 per cent of the national bitter market. As Courage owned the similar and more popular John Smith’s ale brand, marketing of Webster’s was de-prioritised. In 1990, Smith’s was ranked fourth in the bitter market, while Webster’s was sixth.

After Scottish & Newcastle acquired Courage in 1995, Webster’s was further sidelined as S&N also owned a third Yorkshire ale brand in Theakston’s. By 1996, three times more John Smith’s was being sold than Webster’s.

By 1996, the Fountain Head brewery was operating at less than 50 percent capacity. It was closed in November of that year, with the loss of 186 jobs. Webster’s production was moved to John Smith’s in Tadcaster. In 2004, S&N sold the company to Silvan Brands, who moved production to Thomas Hardy in Burtonwood. Decline continued: sales fell from 80,000 to 40,000 barrels between 2001 and 2007. Cask conditioned production ceased in 2010.