Exports case study: Clipper Teas
Created in a Dorset kitchen in 1984, Clipper Teas is one of the UK’s top tea brands. In 1994 it launched the nation’s first ever Fairtrade tea and, over 20 years later, remains the UK market leader in Fairtrade and organic tea.
The importance of exports to growth
Clipper Teas is now the UK’s sixth biggest tea brand and joined the Kallo Foods Limited group in 2012. Export sales represent 20 per cent of group turnover with products currently sold in 45 countries.
In the first six months of 2013, exports grew by 36 per cent while the 2012 full year increase was 40 per cent above 2011. Export growth is vitally important to the business and has allowed Clipper Teas to invest over £1 million in capital expenditure by upgrading its manufacturing facility in Beaminster.
Kallo Foods Limited expects each of its brands – Clipper Teas, Whole Earth and Kallo – to continue to grow, as the group has achieved a compound annual growth rate of 25 per cent over the last five years. Its most successful export products are the Clipper Teas range of speciality teas and herbal or fruit infusions and Whole Earth organic soft drinks. Key strategic and value markets are Scandinavia, Japan, Australia, Canada and the USA.
Overcoming export challenges
The main challenge has been finding international market partners with equal passion for their products and who are also able to replicate the UK brand strategy abroad.
Offering advice to other SMEs seeking to grow export sales, Clipper Teas say that businesses must be prepared to take risks and must not be afraid to challenge partners who are not delivering, and that sometimes it is necessary to take one step backwards in order to take two steps forward.
Another valuable lesson from Clipper Teas’ experience of developing exports is that no market is too small – their market share of the tea category in Finland and Iceland is now bigger than back home in the UK.
Patrick Cairns, CEO of Kallo Foods Limited, said:
“The great thing about export is that the potential is virtually limitless. Over time our adventurousness has been rewarded, with overseas markets becoming a vital, dynamic element of our growth and profitability.”