John-Paul Lee, founder of Tavalon Tea

While investigating the potential of a business in specialty tea retailing in the mid-2000s, one of the companies I kept coming across was Tavalon Tea.  The partners were young, male, and had the edgiest concept I had seen.  Featuring original blends with romantic, enticing names, they opened a retail store in the heart of New York City in a trendy, upscale area with an interior that looked more like a posh jewelry boutique than a tea store, and topped it off with a live DJ in a loft overlooking the space.  

Partners Sonny Caberwal, a Sikh and graduate of Duke and Georgetown Universities who looked like a heartthrob in a Bollywood movie, Chris Cason, formerly with industry giant Adagio Teas, and John-Paul Lee, previously with one of the “Big 5” – Andersen Consulting, now known as Accenture, were the dream team!  With funding and a marketing plan to go with it, they were definitely one of the four or five companies I felt was worth keeping an eye on in the future of specialty tea retailing.

Although Tavalon has since closed its store in New York City, John-Paul Lee, Tavalon’s CEO, assures me the company is far from sitting on its hands and has an international vision for both the retail and wholesale divisions.  When I asked to interview him for T Ching, John-Paul, who was featured in the Spring 2008 issue of Entrepreneur Magazine, was very open and amenable to sharing his thoughts about the future of the company.

Tell me about the founders of Tavalon and what your vision was for the company.

The founders included Sonny Caberwal, Chris Cason, and me.  Our goal was to revamp/revitalize the stagnant image of tea.  The average American perceives tea as being Asian, European, grandmother’s beverage, something you consume only when sick, a “pinky-up-in-the-air” beverage, and too feminine.  We wanted to showcase premium loose-leaf tea in a fun, young, sexy, healthy, and accessible way.

How do you differ from other new and growing concepts such as Argo Tea?

I think Argo Tea is doing a great job and I commend them for their efforts.  We’re attempting to present tea as a lifestyle and use creative efforts to market teas and tea products from various angles.  I also believe it is important to have innovative tea experts within the company who can not only create great teas, but govern quality control from source to fulfillment.

Do you buy direct from estates or through importers?

A combination of both.

Are you self-funded or do you have investors?

A combination of both.  We started off as a self-funded company (sold my house and my car, took out seven credit cards, and liquidated my 401K and stock options), but we now have external investors involved.

Your first retail space had a gallery/boutique look and live DJ.  Is this the retail concept you will return to as you grow?

Yes and no.  The first retail space was very small.  There are many adjustments that we’ll be making to future tea bars.  Every store will be catered and customized to its location and market demographics.

Do you plan a chain of stores (I believe you have one in Asia as well) or are you leaning more toward wholesaling?

We do plan to open more tea bars throughout the U.S. in the near future.  However, we are currently focusing our efforts in the U.S. on wholesale and e-commerce.  We do have two “shop-in-shop” tea bars up and running within two of the high-end department stores in Seoul, South Korea.

You have now had an office location in New York City and the West Coast/Los Angeles area.  What differences, if any, do you find between the two areas in terms of their response to your products/company or to specialty tea in general?

We actually don’t have an office right now on the West Coast, but we do cater to the West Coast market.  In fact, we have a large clientele base on the West Coast for our e-commerce business and we currently service a few restaurants and cafes out there as well.  I find that there are more tea consumers on the West Coast right now, but the East Coast is catching up quickly.

You talk about Tavalon and the future of tea.  Argo likes to be called “the Starbucks of Tea”.  What do you see as necessary to become a niche leader and capture that specialty tea brand recognition?

Becoming “the Starbucks of Tea” is a commendable goal, but I believe Tavalon is well positioned to do what Starbucks has done for coffee on a higher level with tea.  Tea is the second most widely consumed beverage in the world only behind water, so we naturally have a larger market than coffee and our goals reflect that opportunity.  We are taking strategic steps to be the leader in our category through innovation, quality products, and most importantly “passion.”

What else is on the horizon for Tavalon?  Where would you like to be in five years with the company?

We are planning to expand our operations into the Ready-to-Drink (RTD) category and launch our line of loose-leaf sachets.  We will also focus on launching retail locations in major cities across the globe.  My goal is to make Tavalon teas easily accessible, no matter where you are in world.

Has the difficult economy put any of your plans on hold or actually given you opportunities you might not have had?

We have been very fortunate and somewhat shielded from the recession.  In fact, we are actually coming across more opportunities right now, especially on the investment front.  We are in the process of raising capital right to fuel/accelerate our expansion plans and are in a fortunate position to be selective in choosing investors.  A wise man once told me “the closest a man ever gets to experiencing motherhood is when he starts his own company.”  I truly subscribe to this theory and am seeking partners/foster parents who can help me raise this child of mine.

Thanks to Tavalon Tea for all the photos.