Keith Packer, ceo of Typhoo Tea, told FoodManufacture.co.uk in this exclusive interview, that the own-label contract with an undisclosed major retailer would add to the company’s portfolio of such deals.
“We are the UK’s largest private label packer and we supply all of the major retailers apart from one,” said Packer.
Two hundred and sixty people work at Typhoo’s Moreton site, which processes one million tea bags an hour and is expected to have an annual turnover of £77M this year – a 4% increase on last year.
“We currently hold 6–7% of private label market share and 10–11% of branded market share,” Packer said.
Branded growth is expected to drive the business's performance further this year and the new own-label deal is expected to boost sales in the category and push tea output up to between 18,000t and 19,000t.
Focus on innovation in black tea would also be a priority for the company, said Packer. “Eight out of 10 cups of tea drunk in the UK are black tea and we want to grow our presence in other sectors too, but we’re looking at how to innovate in black tea,” he added.
‘£3M in increasing quality’
“We have invested £3M in increasing the quality of our black tea products in the last five years. We have just launched our premium black tea [Typhoo Gold] and we have got more products launching this year in other categories, like green tea.”
Plans to improve operations in the business will also be carried out this year, following the implementation of a capital expenditure programme to boost efficiencies within the business.
Typhoo has also switched its main port from Southampton and Felixstowe to Liverpool, as part of the operational improvements.
“We import about 13,000t to 14,000t of tea through shipping. Although [moving to Liverpool] it is not going to save us any money, it will save on road miles and save circa 80t of carbon dioxide,” said Packer.
The company has increased the proportion of its supplies coming through Liverpool from 10% in 2010 to a predicted 75% this year, following an agreement with Peel Ports Group.
‘Improved cost efficiency’
“Our Moreton plant imports multi-origin raw teas from ports including Mombasa, Cochin, Kolkata, Buenos Aires, Durban, Shanghai and Jakarta,” he added. “We also import packaging and machine parts and we work as closely as possible with our supply chain to achieve lower carbon [emissions], greater reliability and improved cost efficiency,” he added.
Peel Ports has invested more than £300M in developing its deep-water container terminal at Liverpool, which also serves Princes and Kellogg.
“Peel Ports’s work is going to bring more food and retail into the area, it’s a great opportunity and they are continuing to invest to make it more efficient,” said Packer.