The Amazing story of Thomas Johnston Lipton



Scottish entrepreneur Thomas Lipton changed the way Britons drank their tea

 

Early Life

Thomas Johnston Lipton was born on May 10th 1850, the youngest of five children. His parents, Thomas senior and Frances, had emigrated in the 1840s to Scotland from Shannock Mills near Clones in Northern Ireland. The family lived in a four room tenement at 10 Crown Street, Hutchesontown. It was a typical “respectable working class” home.



 

 

 

 

Lipton’s father                       







Lipton                       







 Lipton’s mother

 






He attended St. Andrew’s Parish School where primary education cost three pence a week. Although not academically inclined, he mastered the three Rs. He and his friends formed a club which raced toy yachts on the pools of High Fields near Crown Street and around this time he carved and rigged Shamrock, his first model boat.  

 

He left school in November 1860 and soon began his first job in A & W Kennedy, Stationers in Glassford Street receiving a wage of half-a-crown. However, looking to move up in the business world, he perceived this to be a dead end job. His next job was at Messrs. Tillie & Henderson in Miller Street. The job of cutting of shirt patterns was extremely dull but he doubled his wage to four shillings a week. His early working life wasn’t without incident. After fighting with another boy in the pattern department when asked to explain himself to his boss he answered “I hit him, sir because he cut the toorie aff me bonnet”.  He was soon showing his confidence by asking for a 25% increase which was refused with the answer: “You are getting as much as you are worth and are in a devil of a hurry asking for a rise”.

 

After this terse refusal he lost the little interest he had in the job and soon found another working as a cabin boy on the Burns Line between Glasgow and Belfast which earned him a wage of eight shillings a week. He was enthralled with the job “...it was good to be alive and better still to be a cabin-boy on a gallant Clyde-built steamship”.

 

He claimed he was “never happier...than when in the atmosphere of ships, sailors, boats and the waterside generally”.  While his love of water and boats continued throughout his life, his job at the Burns Line didn’t last: he was given a week’s notice for allowing a cabin lamp to smoke and discolour the white enamel of the ceiling.

 

New Horizons

 

He “wasted no time in vain regrets” after being dismissed from the Burns Line. He had managed to save some of his wages and tips and made enquires about the cost of a steerage passage to New York and, after a long discussion with his parents, he was soon on his way. He was not yet fifteen.

 

Arriving in New York, he couldn’t find work and accepted a job in the tobacco fields of Virginia. He grew close to his employer, plantation owner Sam Clay, who looked after him after a serious foot injury. After a trip back to New York, Lipton’s next job was on a rice plantation at Coosaw Island in South Carolina where the responsibility for the finances and book-keeping gave him a good grounding in running an enterprise. Soon he got that “restless feelin’ ” and took the sudden decision to board a schooner bound for Charleston. The next two years are vague in detail but we do know that he returned to New York for a third time. This time he was lucky and got a job as an assistant in a prosperous New York grocery store. He liked it from the very start: “People must eat...and the store that tempted people to buy goods would never be empty of customers”.

 

He quickly learned the grocery trade and the secrets of his future success, picking up the American techniques of salesmanship and advertising which were to become his trademark.

In the spring of 1869, he made the surprising decision to return to Scotland. This was at a time when most of the ships crossing the Atlantic carried immigrants to America. Arriving back in Glasgow he hired a cab and on top of it placed a rocking chair and barrel of flour for his mother. Lipton had the driver proceed slowly along Crown Street while he waved and shouted greetings to his old friends and neighbours - a spectacle long remembered in the area.

 

Grand Plans

 

Soon after his return he took over his parents’ shop and quickly turned its fortunes around. This wasn’t without some resistance from his father who, when faced with Thomas’s grand plans commented “Ah, no Tom, we’d be getting above ourselves. The neighbors would say that the peas were getting above the sticks”.


After two years working in his parents’ shop, on his 21st birthday, Lipton opened his first shop at 101 Stobcross Street in Glasgow.

In the heart of industrial Glasgow, full of smoke and fog, the shop was said to be so brightly lit that at night it became a beacon in the street. Goods were stacked in the American fashion, not for the convenience of the proprietors, but with the purpose of catching the customers’ attention. Lipton used another selling technique learned from his mother. When his parents had opened their small shop, Mrs. Lipton, rather than deal with middlemen at the markets, dealt directly with the farmers of her homeland. Lipton followed this example. He bought his bacon, eggs, butter and other produce directly from Irish farmers.

He lived, worked and breathed his shop. His days were 18 hours long and often he would sleep on a makeshift bed under the counter. His shop at Stobcross was doing so well that in 1876 he moved to larger premises at 21/27 High Street; he later added shops in Paisley Road, Anderston and Robertson Lane. By 1882 he had shops in Dundee, Paisley, Edinburgh and Leeds.

 

The Power of Advertising

 

It was with stunts and advertising that Lipton was to make his mark. He employed the talents of Willie Lockhart, a leading cartoonist of the day, to produce weekly posters for him. One of the most famous shows a “typical Irishman, knee breeches, cutaway coat, billycock hat, shillelagh an’ all” with a pig, its eyes full of tears, slung in a sack over his shoulder”. The caption reads “What’s the matter with the pig, Pat?” The Irishman replies “Sure, Sir, he’s an orphan so, out of pity, I’m taking him to Lipton’s!”

Lipton subsequently took to buying pigs in the market, tying ribbons to their tails, and having them driven through the streets under a banner which declared them to be “Lipton’s Orphans”. Each day the pigs were driven to his shop by a different route, bringing in new customers.

The opening for each new Lipton shop was cause for newspaper adverts, posters and parades. Lipton himself would be at each opening to offer prizes to the first customers. In 1881 Lipton announced that he was to import the world’s largest cheese from New York. Apparently, 800 cows were milked for six days and the labor of 200 dairymaids was necessary to make this enormous cheese. The streets were lined with spectators cheering the giant cheese on its way to Lipton’s new store in High Street. As an added touch Lipton announced, since it was Christmas, his cheese, like clootie dumpling or Christmas puddings, would contain sovereigns and half sovereigns. When the cheese went on sale, the last piece was sold within two hours of the store opening. These giant cheeses became part of Lipton’s Christmas displays. One was so large that the manager of Lipton’s shop in Nottingham hired an elephant from the local circus to transport it through the town.

By 1890 Lipton was a very rich and successful man. He remarked, later in life, that the only politics he had were to open a new shop every week.

 

Tea

After achieving what he had originally set out to do in the general trade provision he turned his attention to tea. Drinking tea had become much more popular in the late 1880s but still was prohibitively expensive for the average working class family. After investigating the trade further with tea brokers in London he took the decision to do what he had done with ham, butter and eggs, that is, “cut out the middleman, with profit alike to myself and my customers”. Within a year he was selling huge amounts of tea in pound, half pound and quarter pound packets. The blends were made especially for the area around the shops so that Lipton could advertise “the perfect tea to suit the water of your town”.

While he made substantial profits his rule was to abolish “wherever possible, the middleman or intermediary profiteer between the producer and consumer”. The only way he could do this was to control the whole production process. He secretly booked a passage to Australia but disembarked at Colombo, Ceylon to visit the plantations for himself.

 

The summer of 1878 brought a coffee crop failure in the island of Ceylon which all but wiped out that commodity. As a result tea production increased and the purchase price of the plantations was only half of what Lipton had been willing to pay. By using Ceylon to produce the tea it had less distance to travel and was therefore cheaper (traditionally China had been known for producing tea). Within a short period of time he owned five plantations. Now he controlled the whole manufacturing process. Many thought he would fail by not attracting blenders but he proved them wrong: he offered the blenders double their current salary and they soon started working for Lipton. The tea was fresher and, of course, he had a new slogan ready, “Direct from the tea garden to the tea pot.”

Even his 300 shops could not begin to satisfy the demand for tea in packets, at one and seven pence a pound, so Lipton decided to sell it anywhere there was a demand for it, creating that demand by advertising tea as he had his ham and cheese 15 years earlier. In the process Lipton became the trademark of a national commodity. Through tea, “Lipton’s” became a household name. His shops had made him a millionaire but tea made him a multi-millionaire.

 

Growing the Business

Throughout the 1890s Lipton continued to prosper. His close relationship with America and his frequent visits there led him to the decision to break into the American tea market: “I had ample margins of supplies for prospective American customers provided I could prevail upon them to become addicted to my tea in the same way as I had come to be a firm believer in their hams, bacons and cheese”.

His businesses rapidly expanded not only in tea plantations but also in coffee and cocoa estates, fruit farms in Kent, Chicago packing companies and meat stores, bakeries, curing stations and wine stores.

As long as his parents were alive he had resisted the logical move to London. However, as more and more decisions were taken south of the border, he spent half his life on trains going back and forth. In 1889 his mother died. He had lost his “best friend and trustiest counselor”. His father died a few months later. Without his parents to tie him to Glasgow he took the decision to move to London and soon opened new offices in Bath Street, City Road in London.

In 1898 Lipton “yielded to the public clamor” and allowed his empire to become a limited company. The professional view of the company was that while it was rock solid it was no longer capable of drastic expansion. Slow and steady growth would lead to long term investment but no quick wins. What the professionals didn’t take into account was the high regard and affection the public had for the Lipton brand. There was an unprecedented rush for shares. At the National Bank of Scotland the police had to regulate the crowds. Applications were received for almost £50m (close to 63 million) worth of shares. On the 2nd of June that year, Lipton directed his first shareholders’ meeting. It was also the first time in thirty years, since the opening of his first shop in Glasgow, that he had to answer to anyone but himself.

 

As a public company, Lipton’s continued to prosper increasing turnover and dividends year after year. However, the situation rapidly changed in the 1920s when large companies such as Home and Colonial Stores and Van den Berghs (later part of Unilever) were the main competition. In 1927 Van den Berghs acquired 25% of the shares and Sir Thomas retired from active control of the company. Sir John Ferguson took over as chairman retaining Lipton as life president. However it was a title with no power and within two months Sir Thomas had sold his interests in the company to the Meadow Dairy Company (controlled by Home and Colonial). He did not however, relinquish control of his American company, Thomas J. Lipton Inc. or his tea interests in Ceylon.

 

Philanthropy

Throughout his career Lipton was noted for his charitable work. One of the earliest and best known was his gift in 1897 of £25,000 for the Princess of Wales’ plea to provide dinners for the poor of London during the Queen’s Diamond Jubilee celebrations. He worked with Queen Alexandra to set up the Alexandra Trust which provided meals at a very affordable price to the poor in London.

During the First World War he fitted out his steam yacht Erin as a Red Cross hospital ship and transported a field hospital to France. Later he offered Erin to transport surgeons, nurse and orderlies to Serbia which was under attack from the superior forces of Austria-Hungary.

Despite his considerable wealth and social standing he never forgot his humble origins and always showed compassion for the poor and unemployed, particularly in his native Glasgow. In 1902, when a stand at Ibrox Park collapsed killing scores of spectators, he was quick to send a check for the relief of the families of the victims.

 

Football

His generosity spilled over into other fields including sport; there was hardly a corner in the world which could not boast a ‘Lipton’ cup whether for sailing, racing, cricket or football.

In 1909 Lipton was made a Knight Commander of the Grand Order of the Crown of Italy. By way of thanks, he presented the Italians with a cup to be used for an international football competition. The Football Association declined to nominate a team so Lipton turned to West Auckland Town to represent Britain. The team was made up mostly of coal miners and, in a story as romantic as Lipton’s own, they beat Red Star of Zurich and Juventus to win this cup in 1910 then successfully defended the title in 1911. Because of this Lipton is often credited with initiating the first football World Cup.

 


Yachting and The America’s Cup

Lipton’s charitable work was to catapult him into a whole new world. He was, until this time, a man devoted entirely to work. His friendship with the Prince of Wales, soon to be Edward VII, developed rapidly, strengthened by a passion for the shared interest of yacht racing. He was to be as ambitious a sportsman as he was a business man. His very first racing venture was to compete in the world’s most famous yacht race: The America’s Cup. Between 1899 and 1930 he challenged five times for the Cup, all in yachts named Shamrock, to honour his Irish lineage and friends at the Royal Ulster Yacht Club.

He never managed to “lift that auld mug - surely the most elusive piece of metal in all the world so far as I am concerned”.  However, thirty years of chasing the America’s Cup brought him ‘joy... health and splendid friends’ and it also kept him “‘young, eager, buoyant and hopeful”.

 

He also captured the imagination of the American people. He was presented with a solid gold loving cup and a donors’ book in which the flamboyant mayor of New York had written “possibly the world’s worst yacht builder but absolutely the world’s most cheerful loser”.

Even after the transfer of his headquarters to London, Lipton remained a familiar figure in his native Scotland. He was a frequent visitor to Glasgow for business and pleasure. The Erin was frequently seen cruising in the Clyde - especially during Clyde Yacht Week when one of the Shamrocks usually claimed a trophy. Lipton and yacht racing were so popular, that he even makes an appearance in Neil Munro’s Para Handy Tales where, much to the relief of MacPhail and the annoyance of the Captain, Shamrock snatches victory from White Heather. In recognition of his popularity and his contribution to yachting on the Clyde, Lipton was presented with the freedom of Rothesay in June 1931.

 

High Society

When Lipton transferred his business from Glasgow to his new London headquarters he also acquired a new home, Osidge, a large comfortable house set in a sixty acre estate in Southgate, Middlesex. He enjoyed entertaining friends and business acquaintances and every year he held a day of sports and entertainment especially for his office staff.

In 1898, Lipton purchased the Clyde-built 1,240 ton steam yacht, Aegusa, which he renamed the Erin. Lipton entertained lavishly on the Erin: “Looking back now it gives me intense satisfaction to recall the many prominent and distinguished people to whom I had the honour of acting as host aboard my floating home”.

 

Among his distinguished guests were King Edward VII, Queen Alexandra, Princess Beatrice and her daughter and “practically every Royal personage in Europe and of illustrious men and women in every walk of life on both sides of the Atlantic”.

In 1898 he travelled to the Isle of Wight to be knighted by the Queen. He became a baronet in 1902. Perhaps the greatest honor, however, was to be given the Freedom of Glasgow in 1923.

Sir Thomas, as a friend of Edward VII, found himself mixing with the cream of Edwardian society. He was a frequent guest at Buckingham Palace and Balmoral. At Cowes he was entertained on the royal yacht Victoria and Albert and in return he arranged cruises and parties on board the Erin. Ascot, the Cowes regattas, Christmas on the Riviera, royal parties at Sandringham, visits to Ceylon and the United States filled his social year.

His popularity in America increased with every visit. He mixed with everyone from Wall St to Washington, from New York Yacht Club to Hollywood. He dined at the White House and entertained President Roosevelt on board the Erin.

 

Lipton was wealthy, good-looking and affable and therefore particularly eligible. He was a “ladies man and an adept flirt” and there was never a shortage of the company of ladies. The newspapers, on both sides of the Atlantic, would take a “friendly curiosity” in his marital state but he remained unmarried all his life.

 

The Legacy

 

Sir Thomas Lipton died peacefully in his sleep at his home in Osidge on the 2nd October 1931. He was 81 years of age and was said to have been planning his sixth attempt at The America’s Cup. He was buried beside his beloved mother and father in the Southern Necropolis, Glasgow. Thousands of Glaswegians filed past his coffin in St George’s Church and huge crowds lined the streets as the funeral cortege made its way to the cemetery.

 

The terms of his will were to benefit the city of his birth. £80,000 was left to establish the Frances Lipton Memorial Fund for the benefit of poor mothers and their children. His yachting trophies and press cuttings collection were also left to the city, the former housed at Kelvingrove Museum and Art Gallery, the latter forming the Sir Thomas J. Lipton Collection at the Mitchell Library. He left specific bequests to Glasgow hospitals, servants and friends. His London house, Osidge, became The Sir Thomas Lipton Memorial Hospital for Retired Nurses in memory of his mother. The residue of his estate was to be used by his trustees for the benefit of the poor in Glasgow. In 1937, six years after Lipton’s death, a High Court order allowed his trustees to sell his interests with the proceeds going to the Lipton Trust for the benefit of the poor in Glasgow.

 

By 1946, when the last payment was made, The Lipton trust had donated a total of £821,000 to the City (over 1 million dollars). The Lipton brand, now owned by Unilever, is still going strong.

 

                                                                     © Michelle Young 2012