In the second part of Tommy Lipton’s story we saw him grow his grocery empire countrywide using hard work and the circus derived promotional skills he had learned in America from Barnum & Bailey. We left him taking a rare holiday after the death of his beloved mother and within six months his father; taking a sea trip to Australia, stopping off in Ceylon with £75,000 in his pocket looking for new business opportunities.

To understand why Lipton invested in buying three tea estates during that short stopover we need to look at how tea was retailed in the 1880s. Tommy was a typical grocer selling a range of fresh and preserved provisions: bacon, ham, eggs, butter and cheese, sugar, jams, meat pastes, coffee and tea. In those days a general grocer had a couple of open chests of tea on display and weighed and packed tea to order in folded ‘sugar paper’ packets made up by the shop boy in any spare time left after sweeping up and delivering orders. Higher class grocers would offer customers a house blend of an English Breakfast style, and perhaps a green tea also. Customers wanting a wider selection of teas would frequent a specialist tea merchant such as Twinings. Lipton had always purchased his tea as he did his sugar, in bulk from an importer. His sourcing of tea direct from his own Ceylon gardens allowed him to create a distinct brand and coin his immortal slogan – that “Lipton cuts out the middleman”. This move into producing his own raw material was to change his company, his life, and certainly the history of tea.

Retail packaging of tea, first introduced by Horniman’s Tea Company in the 1860’s to avoid contamination was still in its infancy – but Tommy Lipton was about to popularise it until the extra price the customer paid for packaging would be willingly accepted as a guarantee of quality and consistency.

When in 1890 Lipton disembarked into the moist tropical heat of Colombo to meet his agent Frank Duplock, who had travelled ahead prospecting for opportunities, he set foot in a country whose agriculture was in turmoil. Ceylon had been the Colonial coffee producer, Assam was the tea producer; but from the mid-1870s a fungal blight rapidly destroyed the island’s coffee production and land prices plummeted. Coffee rust (Hemileia vastatrix) wryly nicknamed ‘Devastating Emily’ had no known cure and the ruined planters in desperation turned to tea. This move proved a life saver and by 1890, when Lipton arrived, tea production had already leaped to a quarter of Assam’s annual exports. At the Grand Oriental Hotel, then Colombo’s only hotel, when Lipton asked Duplock about the business prospects; Frank replied “They are pretty good, sir.” Lipton replied, “Then I’ll break my journey”.

Buying his first tea estates was a typical Tommy Lipton snap decision. Hearing of three estates on offer he travelled up country by the train, winding through vast copra plantations, then rubber, through the abandoned coffee estates, and hauling up 6,000 feet to lush tea gardens. Three estates were on offer and Dambatene was the first he inspected. Anyone visiting this estate today will understand how he felt: green velvet fields overlooking a valley falling a sheer 4,000 feet, with the coast visible 60 miles away. Within hours Lipton had cabled his offer to the London based owners (at half the asking price and leaving Lipton with £50,000 of his investment fund untouched) and within a day had become the sole proprietor of his own tea empire.

Lipton never blended tea in the sense that Tetley or PG Tips now do – a mix of perhaps 30 different tea origins carefully selected to maintain a brand profile, to minimise cost and to maximise profit. While the Lipton blend did contain some Indian tea Tommy’s Lipton brand retained the Ceylon character and only Ceylon was mentioned in his advertising. As we have seen Lipton was a consummate salesman, he worked by emphasising the key attributes of his tea – briskness and aroma; by inventing a novel description – Orange Pekoe – that still confuses consumers; and sold his tea so fast that it ensured freshness “Direct from the Tea Gardens to the Teapot”. His branded tea stood out from the heavy Assams and the often stale and plain China’s. Tommy differentiated his product from the competition and sold it on its benefits. Supported by intensive (and often very creative) advertising and massive promotion Lipton had invented FMCG – Fast Moving Consumer Goods – without which concept our modern supermarkets would not exist.

Thomas Lipton’s three tea estates quickly became five, then eight. To supplement his own production he was soon buying tea on the Colombo Auction. His 300 groceries could not keep up with demand for the yellow and red labelled quarter and half pound packs of Orange Pekoe. A quality product at a reasonable price (1/-, 1/4 and 1/7 per lb) with “No Middlemen’s Profits to Pay” created consumer demand. Lipton’s advertising skills fanned demand into clamour and the hoardings and press adverts were soon claiming “Over one million packets sold weekly”. On signing a cheque for £35,000 for tea import duty in a week when the Chancellor of the Exchequer had announced an increase on income tax, instead of complaining about the ever increasing tax bill he paid, Lipton boasted to the press how he would soon be signing six figure cheques “Why all this fuss about an additional penny on income tax? Let good patriots drink more Lipton’s tea so that the cheques for duty may increase till personal taxation is abolished.”

When Lipton first saw Dambatene he was already a millionaire. His venture into tea increased his wealth many times, but it was all returned to building his business, increasing its size and influence. Apart from moving his home to London and commercial headquarters to City Road, Tommy Lipton’s personal life at 46 was very little different to 20 years before. Lipton the brand was on everyone’s lips but Lipton the man was virtually unknown. He was in fact a very private man with few friends and no interest in politics, literature or the theatre; the bawdy Naughty Nineties of Wilde and Beardsley were not to Lipton’s taste. He was never “seen about town” nor talked about in society. However, with the change of the century there was to be a profound change in Lipton’s social position, and that was perhaps his greatest branding masterpiece.

Next Part – how plain Tommy Lipton the grocer became Sir Thomas Lipton, Knight of the British Empire