Books@Daily Finance: The Rise and Rise of the World's Greatest Tea Mogul
Jul 10th 2010 10:00AM
Updated Jul 12th 2010 8:47AM
There will always be an England, they say. But where would the sceptered isle be without its tea? Sans Early Grey, would Churchill have been as staunch a warrior or Laurence Olivier as nimble a thespian?
Around the year 1700, tea was effectively a controlled substance. It was heavily taxed by the government, costly to import from China, and sometimes illicit, having been smuggled in by criminal gangs. Not until the last quarter of the 19th Century did tea become a British household staple, after a Scottish adventurer stole some heavily guarded seedlings from China and facilitated the development of tea plantations in British-controlled India.
By the late 1880s, the average Briton drank thirty-five gallons of tea each year. But even then, much of it was low quality, often moldy and musty-tasting.
From Glasgow to Riches
Enter Thomas Lipton, the subject of Michael D'Antonio's entertaining and instructive new book, A Full Cup: Sir Thomas Lipton's Extraordinary Life and His Quest for the America's Cup (Riverhead Books). The Glasgow native who'd briefly lived in America was the owner of some 150 bright and attractive food shops -- the application of merchandising methods he'd picked up from such Yanks as department-store magnate A.T. Stewart. Lipton attracted customers with low prices, superior goods, and virtually constant promotion and advertising. In one stunt, he paraded pigs through the streets bearing signs with such slogans as: "Lipton's: The Best Shop in Town for Irish Bacon."
Lipton entered the tea market with gusto: He received sizable discounts from the controlling middlemen in exchange for bulk purchases. He obtained high-quality stuff, advertised heavily in newspapers, and priced his tea well below that of competitors. And he branded his wares, offering Lipton Tea in bright yellow paper packages rather than selling it loose as most others did.
Lipton Tea became the company's signature product and, alongside Cadbury chocolate, one of the earliest consumer brands. And in 1890, the merchant solidified his position by purchasing thousands of acres of tea plantations in Ceylon. Soon, Lipton took on the U.S. market and, employing the same promotional methods, taught Americans to sip what they'd previously regarded as an alien brew. Before long, he had new products and new stores -- from Newfoundland to New Zealand -- and a sprawling 14-acre factory-and-office complex in London. The Lipton name was everywhere -- on ads in train stations and in shop windows, and on the sides of a fleet of company motor trucks. Asked the secret of his success by a journalist, Lipton replied: "Secret of it? Make no secret of it. Advertise all you can."
Boating Consumes Him
Much like Lipton's life, D'Antonio's stimulating and informative volume falls into two parts. With his fortune secure, and after receiving a knighthood in 1897 thanks to his much-publicized charitable works, Lipton made himself into an international sportsman. There was little in the way of big-time athletics during that era; the biggest sporting event in the world was the America's Cup, a series of sailing races pitting one British yacht against one American, and held at irregular intervals off the New Jersey shore. The New York Yacht Club entry was the perennial winner, with the 1893 British defeat marred by post-race accusations of favoritism and cheating. Lipton, who knew as much about yachting as about igloo-making, determined to take up the baton.
In a series of five Cups held between 1899 and 1930, Lipton repeatedly challenged the Americans -- and never won. He spent millions upon millions of dollars on the design and construction of a new, presumably faster ship for each race. The New Yorkers were, of course, spending equivalent amounts of money and effort, even into the early years of the Great Depression.
D'Antonio offers exciting accounts of each race. The author describes the design and building of Lipton's Shamrock I through Shamrock V, and the various American craft, Columbia, Reliance, Resolute, and Enterprise. The first contest proved dramatic. Thousands of visitors descended upon New York, where two days of banquets, concerts, fireworks displays, and oratory celebrated the event. Perhaps coincidentally, Admiral George Dewey, fresh from the U.S. triumph in the Spanish-American War, arrived on the scene, accidentally met up with Lipton, and became a pal to the Briton. The races were initially frustrated by an absence of wind, but this changed, and on the morning of the second heat, Shamrock's topmast snapped in the wind. The American ship won all three heats decisively.
"The Good Millionaire"
Lipton was ever gracious in defeat -- perhaps because he had a broader agenda. Win or lose, he was using the contests as a way of building recognition for his tea and other wares. The tony America's Cup, accompanied by lavish society balls and attended by princes and Presidents, became just one more advertising opportunity. Equally significant, Lipton was turning himself into a recognizable brand. Consistently attired in an open frock coat, yachting cap, white high-collared shirt, and polka-dot bow tie, the tall, mustachioed gent became, over the decades, as recognizable as Theodore Roosevelt -- or Mickey Mouse. In contrast to such Robber Barons as John D. Rockefeller, Sr., Lipton was "the good millionaire," in D'Antonio's words – a paragon who'd risen from Glaswegian poverty to riches via his exemplary personal attributes. And anticipating such figures as Noel Coward and Alistair Cooke, the much feted and congratulated Lipton became America's professional Englishman -- a worthy candidate for a special relationship.
Lipton was treated like royalty during trips to the United States. A 1931 visit, though, was special, as Lipton was presented with a "loser's cup" fashioned by Tiffany. Given a police escort to New York's City Hall, cheered by thousands outside and inside the building, he was praised by Mayor Jimmy Walker as "the greatest sportsman of our time."
But he didn't have long to bask in the afterglow of Walker's praise. Lipton died that fall, felled by a respiratory infection. You can, of course, still buy Lipton's primary product, and many, many people do. With $3.5 billion in annual sales, the brand commands a tenth of the global market for tea.