The tea industry is awash in oft-cited statistics about its global dominance and projected growth. But lately, I’ve observed some anecdotal activity that seems a better indicator that specialty tea may be on the verge of breaking into the big time.
My fellow researchers and journalists (especially those who are new to the tea industry) and I like to joke about how some “common knowledge” in the tea industry is impossible to verify. One example I’m sure you’ve heard and probably used: Tea is the second-most drunk beverage in the world. Really? According to whom? (Seriously, if you know, please tell me.) It’s not hard to believe; just hard to fact-check.
Then there are the items that actually are facts, but are also unfortunately misused. For instance, the Sage Group’s projection that tea sales in the U.S. are expected to exceed $10 billion in 2010 (from the Specialty Tea is Hot Report). People using this stat frequently leave out that it includes beverage and non-beverage categories – meaning tea for brewing, as well as tea extracts, powders, and other tea for ingredients – and therefore is not directly applicable to tea shop growth, per se.
Until more specific, verifiable data is available, wonks like me are stuck with analyzing our own observations. Two recent developments seem significant to me.
The first is the emergence of Village Tea Co. Launched at World Tea Expo in May, the company is rumored to have solid financial backing. It hit the market with a multi-pronged business strategy encompassing two of the most successful models operating in the market today (see our interview with CEO Martin Ekechukwu), combined with an innovative approach appealing to the family.
Following the launch of its online business, Village Tea has begun opening its brick-and-mortar shops (see our story, as well as the more recent Dallas Business Journal coverage.). So far, everything is going according to plan for Village Tea Co. This is significant, in that the company has made no secret of its ultimate plan: world domination – or, as Ekechukwu put it, “the holy Grail,” also known as becoming the Starbucks of specialty tea.
It seems Ekechukwu will have to beat Starbucks to it; the Seattle coffee giant itself is currently experimenting with premium loose-leaf tea. This is happening at 15th Ave. Coffee & Tea, Starbucks’ off-brand attempt at recapturing its neighborhood feel. Reportedly, the company has several other such unique, culture-specific spots in the works.
Starbucks-branded stores serve bagged tea by Tazo (also owned by Starbucks), often, in my experience, in a paper cup with boiling water poured over it. I’ve even had baristas ask me if I want one tea bag or two, indicating a lack of understanding of the quality of their tea and the correct brewing method.
15th Ave. promises a different experience. Consider the description under “Our Teas” on the home page of the Web site: “Picked at the height of the season, dried and cared for, our teas are sourced from unique and distinguished tea farms.” Jump to the tea page, and you’ll find a menu of 17 specialty teas, listing the name and origin, along with a detailed description of the leaf, the process, and the flavor. Although the selection is noticeably mainstream, 15th Ave. does hand-brew its teas by the pot or the cup.
For at least the year and a half I’ve been covering the specialty tea business (and much longer, I suspect), many players have speculated on the industry’s potential to break into the big time. In business journalism and research, we learn to “follow the money.” Right now, the money seems to be leading, albeit cautiously, to specialty tea.
So, the next question people in the industry ask may be: “Is this really what we want?”