Surging sales in tea and biscuits have delivered a 10% lift in turnover at Newcastle tea manufacturers Ringtons.
The family firm, which marks its 115th anniversary this year, began with a horse-drawn delivery service across the streets of Newcastle but now sells its tea, coffee and biscuits across the UK and beyond, in stores, online and through its unique doorstep delivery service.
The Byker business, which produces more than 600 lines of tea including blends for a variety of white label customers, has now published accounts showing how it has bounced back from a hit it took at the start of the pandemic to see sales and profits rise above pre-pandemic levels.
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Accounts for the year ending June 2021 show turnover rose 10.2% to £65.2m, while operating profit rose 37.4% to £4.6m. The company’s workforce also rose from 549 employees to 562.
Ringtons' chief executive Simon Smith said the increases were driven by a consistent rise in tea consumption, with lockdowns at the start of the year prompting people to make more cups of tea while they stayed at home.
In the previous year, customers had rushed to stock up on teabags, worried they may not easily be able to buy in their usual Ringtons supplies during lockdown, and the company’s fleet of 200-plus delivery vans also came to a halt for two months.
Last year the company attracted around 20,000 extra customers to its website, some of whom had switched to getting online orders when the doorstep delivery vans were temporarily stopped at the start of the pandemic.
Mr Smith said most of those new customers are now still continuing to receive regular orders, with some moving back to receiving doorstep deliveries, and online sales now accounting for around £2m in turnover.
He said: “After that bounce back in May 2020 when the delivery vans were back on the road we continued that initial strong period of sales and to a certain extent it’s still continuing now. We had very strong sales, with more people at home with more tea and biscuits, and a very strong Christmas programme which was in essence a sell-out.
“The beverages and coffee business suffered a big hit when hospitality was shut down and we used the time to support our customers. It was difficult but we’ve come out of it stronger for it.
“Our private label customers also had a surge in tea sales, so it was a real challenge keeping all the wheels spinning on the considerable number of lines that we now do, which is getting close to 600.
“And in essence, the staff within the business, it’s because of their adaptability, commitment and passion for the business, in tea packaging, doorstep, internet, distribution, tea buying, whichever area it’s been, you couldn’t ask anyone to do more.”
Mr Smith said tea sales are now returning to normal levels but he warned over inflationary pressures with rising costs affected every facet of the business, from energy and labour costs to packaging and logistics.
Container costs used to ship in various commodities have rocketed by more than 400%, with typical fees of $2,000 peaking at $18,000 last year. Cardboard is also now at premium, with a surge in demand at the start of the pandemic by delivery companies around the globe now resulting in low supplies.
Mr Smith said: “Looking ahead, it’s going to change. We’ve had a lot of difficulty with logistics, with getting the products, getting the packaging we want when we want, the prices have all increased for pretty everything we need to pack or buy our products. We see that inflation is very real for us and our customers. Therefore, we expect times to get much more difficult and are doing what we can to combat that.
“You can prepare by being as commercially sharp as you can be. That’s difficult because the scale of what’s going on is big. And you can make sure that your staff and teams are well rewarded as you can afford, so they are in the strongest possible position to be able to handle inflation and the repercussions.
“There’s no wand to wave. We put up some of our prices in January, but it’s going to a year full of them. We can’t avoid them. It will be between 5% and 10% depending on the product and the product mixes.”
But Mr Smith said the firm would continue to invest.
He added: “We were able to cope with Covid, we were able to support our customers, support the staff and make investments for the future, including bringing in the fifth generation of associate directors to join the team - and that’s family business long-term thinking in play.”
