July 2010 will mark the beginning of our second year as a retailer of loose-leaf tea here in Temecula, the “Golden Triangle” of Southern California – close to hot spots in four counties and a city beginning to awaken to specialty tea culture and knowledge.  Despite the horrific economy and unemployment numbers touching 20% in this area, we are more excited than ever about the possibilities associated with the specialty tea business.

In specialty tea retailing in the U.S., there have been some surprises in the last few years, with some of the most funded companies fading away and some small upstarts gaining momentum.  Statistics are dubious, depending on who is putting them together and why, but one thing is for sure: Specialty tea retailing is still a growing proposition in new and varied incarnations, and the field is wide open to anyone with vision and determination and enough funding to stay up and running while the sleeping giant awakens and the concepts are tweaked.

In his recent T Ching post, Sam Ritchey talked about some trends he has seen “brewing”, two of which are in the areas of technology/brewing apparatus inventiveness and presentation styles, which will allow for consumer participation in a more meaningful way.  Taking off on his observations, as a start-up retailer, here are some local tea trends we have seen from the day we opened our doors in 2008 until today:

1.  A significant number of people are switching, thinking about switching, or partially switching from coffee to tea, mainly because of increased health concerns, such as stomach problems, or the side-effects of the greater amount of caffeine in coffee.

2.  Young people are moving toward tea more than coffee.  High-schoolers through 20-somethings are intrigued by the variety and “newness” of loose-leaf tea.

3.  Men are as likely to order tea as women in our store.

4.  Tea drinkers are much more interested in learning more about tea than coffee drinkers seem to be about coffee.

5.  Tea drinkers are much more likely to purchase loose leaf for at-home brewing than coffee drinkers are to purchase beans.

6.  Tea drinkers are more likely to purchase brewing accessories than coffee drinkers.

7.  Tea drinkers spread the word to others about where to find great loose-leaf tea and accessories.  In other words, there is, indeed, a sort of “underground tea culture” – scattered though it may be – looking for a source to indulge their passion.

Acting on what we have experienced, we are planning to continue to pursue new and exciting ways of presenting loose-leaf tea to the public.  We also plan to find more creative ways to educate customers about loose-leaf tea.  We have found that Twitter and Facebook are valuable connections on a local level for getting people interested in what we are doing with tea and that the foodservice side (bakery case & specialty beverages) acts as a valuable lure.

What is wonderful about a retail store is that you can quickly analyze what works and what doesn’t in your particular market.  You do not have to wait for retail buyers’ decisions or pay for retail slotting space in competition with large wholesalers; you get paid when the purchase is made rather than 30+ days later.  If you are wise in purchasing, you can keep inventories and waste low.  The downside is expensive retail space for good locations and the challenge of marketing your store so that customers know what you’re about and how to find you.

The beautiful thing is that those of us in the specialty tea retailing business have a product that is very easy to sell if we understand it and present it to the public with respect, passion, panache, and quality.  And whether we have one tea-centric shop or a growing chain funded by VCs, we all have a ground-floor opportunity in a growing niche to make a living working with something we very much believe in and care about.  So, to Charles, Tracy, Sam, and all other contributors here either in or looking to get into the retail side of specialty tea, I wish you the very best for 2010 and beyond.  It’s going to be quite a ride!