In a bold move, Supreme has expanded its reach beyond the vaping industry by acquiring Typhoo Tea in a £10.2 million deal.
The acquisition marks a significant step in Supreme’s strategy to diversify its portfolio and bolster its presence in the drinks and nutrition sectors. Typhoo Tea, a renowned British brand, faced financial difficulties, entering administration after a sharp decline in sales and mounting debts. This acquisition provides Supreme with an opportunity to revitalise the tea brand and integrate it within its broader business framework.
Typhoo Tea reported a 26% decrease in sales to £25 million last year, a dramatic drop from £34 million in 2022. Concurrently, the company saw its losses soar from £9.7 million to £38 million, with debts almost reaching £70 million. Despite these challenges, Supreme is optimistic about the potential of its new venture.
Under Supreme’s ownership, the Typhoo Tea brand will benefit from a streamlined operation. Supreme anticipates achieving a gross profit margin of approximately 30%, facilitated by a reduced overhead structure. The company assures customers and stakeholders that the integration process will be smooth, with no disruption to existing operations or customer service.
Supreme’s diversification strategy is further underscored by this acquisition, pushing its non-vape revenue beyond £120 million annually. The deal not only expands Supreme’s retail network within the UK through collaborations with prominent retailers such as Holland & Barrett but also opens up new sales avenues across various product categories.
Sandy Chadha, CEO of Supreme, expressed confidence in the acquisition’s potential benefits, stating, ‘I believe Typhoo Tea will thrive under our ownership, further benefitting from Supreme’s significant market reach and successful track record in creating brand loyalty, making us an ideal fit for this business.’
Chadha further noted that the integration of Typhoo Tea aligns with Supreme’s establishment of its soft drinks division earlier this year. The complementary blend of value and premium tea brands presents opportunities for cross-selling and innovation, particularly with the potential entry into credible UK retail markets that the company has long sought to engage.
The acquisition of Typhoo Tea by Supreme represents a forward-thinking approach to business diversification, promising new growth opportunities and market expansion.
