Nathalie Roos: the CEO making black tea cool again

Nathalie Roos is playing a TikTok video of Dua Lipa. In it, the singer is being interviewed about how to make “the perfect cup of tea”. “You’ve got to boil the kettle,” the pop star says. “Take your teabag…” And then comes the killer line: “I think PG Tips is probably my favourite.”

It’s the kind of publicity that is music to the ears of Roos, the boss of Lipton Teas & Infusions – the private equity-owned tea business behind PG Tips, Lipton and Pukka. She’s on a mission to make the cuppa cool again. So Dua Lipa is the ideal person to endorse the revamped PG Tips, which last year unveiled a new, improved blend and a bag that brews in 60 seconds.

It’s all part of an aim to bring value back into brand, says Roos, a former Mars, L’Oréal and Kronenbourg boss. She is clearly unhappy about the direction PG Tips was taking before being bought by Lipton Teas & Infusions, as part of its £3.8bn purchase of Unilever’s Ekaterra tea business in 2022. For her, this is inextricably linked to the 5.7% volume decline in everyday tea volumes [Kantar 52 w/e 5 May 2023].

“When you have no leader in the category, you let the market go,” she stresses. “A lot of value has been destroyed in tea. Before we started, the average tea[bag] price was 2p, which is ridiculous. With this money, how can we bring margin to the retailers? How can we invest and make the category grow?”

Investment was certainly necessary to boost former market leader PG Tips, which lost £2.8m last year. It slid down to become the fourth-biggest tea brand behind Tetley, nearly £60m behind current number one Yorkshire Tea [NIQ 52 w/e 9 September 2023].

Roos is determined to reignite the UK’s love of the brand. One of her first moves, in partnership with UK & Ireland GM Liam McNamara, was to cut the number of PG Tips lines. Its SKU count has halved to just four: an 80-pack and a 210-pack, plus 80-packs of its Decaf and Gold variants). The average price of one of its bags, meanwhile, has climbed to 6p.

That was complemented by the brand’s aforementioned relaunch in September. Already, the signs are positive. The core PG Tips 80-pack is up 46% in value [NIQ 52 w/e 27 January], while McNamara says the slimmer portfolio has resulted in fewer out-of-stocks.

“A lot of value has been destroyed in tea. Before we started, the average teabag price was 2p, which is ridiculous”

That approach is one Lipton is mimicking across its entire portfolio of brands, whose SKU count has reduced from 13,000 to under 3,000 in just over 18 months. Roos is wedded to this strategy, having undertaken a similar exercise at Mars in France. There, she culled 30% of all lines, including 70% of those in its ice cream business, and invested the savings in marketing.

“Focusing and reducing your range is everything,” she says. “The shelves today are polluted with SKUs that are absolutely useless.”

In the case of Lipton, Roos says the cull has freed up to £40m on spend on improvements at its factory in Manchester. It was also able to invest £15m in media activity to support the big PG Tips comeback.

Not that the campaign has gone seamlessly. Online reactions to the brand’s new 60-second bag – and “perfection but faster” OOH campaign – have been mixed. In one scathing post, Richard Huntington, CSO at Saatchi & Saatchi, said Lipton had spent “£50m on a product alteration no one wants”.

For Roos, that couldn’t be further from the truth. “On every box of black tea it says to infuse for three to four minutes. Nobody does that, even the Brits!” She acknowledges, however, that PG Tips may have to tweak its messaging. “What we intend to do has no value if consumers don’t perceive it.”

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PG Tips was undoubtedly the biggest challenge of the brands acquired in Lipton’s purchase of the Unilever tea division, which also included Pukka Herbs, T2 and Tazo. Pukka, for example, is flying high. It’s now the UK’s fifth-largest tea brand, and Roos sees the potential to hit €1bn in annual revenue – which would make it the second its portfolio to do so alongside Lipton.

Last year she placed the business in the hands of An Driessens, a former executive at Weleda, who has overseen its full integration into the wider Lipton business in Rotterdam.

Pukka job losses

That has come with its own challenges, though. The move resulted in the closure of Pukka’s head offices in Bristol, making about 90 of its 120 staff redundant.

Roos dismisses suggestions Lipton’s PE owner CVC is simply looking to drive down expenditure. She cites “tangible investments” made globally by CVC, including new factories and improvements to existing facilities in the UK, Turkey, Pakistan and the US.

These, she says, show Lipton’s owners “cannot be suspected of wanting to cut costs”. The Pukka brand will now benefit from insights gleaned from a new research & innovation centre in Amsterdam, Roos says.

She’s also committed to recertifying the Pukka brand as a B Corp – and potentially extending that certification to Lipton’s wider portfolio. That would involve assessing the treatment of workers in Lipton’s global supply chain. Under Unilever’s ownership, women at PG Tips plantations were alleged in a BBC documentary to have faced abuse and exploitation at the hands of their supervisors.

Roos insists progress has been made on Lipton’s watch, including the introduction of independent committees to oversee hiring and firing at farms, plus anonymous reporting systems. “Within our own plantations it’s been quite quick,” she says. “Now we’re working closely with suppliers to set standards for the industry.”

Setting these standards won’t come cheap. That’s why – Roos says – persuading Brits to pay more for their morning cuppa is so essential.