July 16 was the two-year anniversary of our Temecula store – California Tea & Coffee Brewery.  We opened in the worst economy in my lifetime, in a location Starbucks didn’t want (which means no drive-through and hidden from the main street it sits back from), and in a county where unemployment is about 15% (their numbers – I suspect it’s a good 5% higher).  How is that for a great kick-off?  The good part is that many businesses in the best of times don’t survive this long, so we are extremely grateful and optimistic.

The current situation in the world makes any business challenging, but particularly a loose-leaf tea specialty business.  We have many hurdles to overcome by being part of this niche, including promoting a paradigm shift from coffee (the unofficial U.S. national beverage…along with soft drinks) to specialty loose-leaf tea.  Customers are mostly new and early adapters with many questions: How much does it cost per serving, how long will this package last, how do I brew it, which kind of tea is healthiest, and many more…too many to list.  Some people see loose leaf as difficult to work with (it’s not), expensive (it’s not), and intimidating (only if you are a complete novice and don’t have a good tea purveyor to do the introductions).

It was exciting this morning to see “the” Gary Vaynerchuk – @garyvee on Twitter, with almost one-million followers – predict that U.S. tea sales will pass coffee sales by 2020.  Online wine guru, superbusinessman, and author, he also just did a streaming video with Samovar Tea’s Jesse Jacobs and Tim Ferris of wine-and-tea pairings.  This, my friends, can only help us if we are positioned to ride the wave.

The field is still wide open when it comes to specialty tea retailing.  There are four to five companies way ahead of the pack out there, mostly because they started ahead of the pack as visionaries in the 1990s or earlier, but it’s still anyone’s game if you are prepared with a viable concept, a unique selling proposition, great product, and great execution.  Even if things are tight and the VCs haven’t started knocking on your door, you will have great free health/medical publicity on national TV shows like Oprah and Dr. Oz to help promote your product and the big guys out there blazing trails.  Starbucks opened a whole new niche for specialty coffee retailers to move into, and I believe if there are “giants” in specialty tea, they will provide great opportunities for enterprising little guys…like us.  We are poised.  We are ready.  Are you?

Here are some things I believe will help little companies stand out in the retailing crowd:

1.  Location, location, location.  We had to break this rule a little, but that’s another story, and we have had to overcome that.  One advantage was that we inherited a beautiful build-out that would have cost us years of profits and came with a great landlord.  These days, there are quite a few lovely build-outs ready to walk into where the prior owner has simply locked the door and walked away.

2.  Best-tasting teas.  Cup them yourself – don’t just batch order from a distributor anything they recommend.  People like us will spend inordinate amounts of time on this step, but pickiness pays off!

3.  Fair Trade and organic.  Consumers are definitely seeing these as positives at our store.

4.  Original recipes.  We took the time to come up with our own recipes for specialty drinks.  Many retailers simply order mixes and powders that are identical to the donut shop’s down the block.

5.  Brewing accessories.  Find unique or just attractive and highly functional items.  If you wouldn’t want to use them every day because they don’t work beautifully, why would your customers?  And display them to best advantage – study department store retail displays of similar items.

6.  Bakery case.  Another case of sample it yourself and take time to find really wonderful items not everyone in the tea and coffee niche has.  You don’t need a lot of them (think In-N-Out Burger simplicity)…just luscious ones.  This is one of the toughest areas to get right.  Larger companies like TeaGschwendner, Adagio, and Teavana aren’t going the pastry direction and I suspect that will be the trend, since it can be time and labor consuming and make for waste; however, it is something that can attract a customer to you, if your loose-leaf selection is top notch.

7.  Customer service.  Your customers are your best advertisement.  Pamper your regulars.

8.  Coffee/espresso.  Do you need it?  We find it is a wonderful product mix with tea in too many ways to go into.  It doesn’t hurt your tea credibility one bit, we have found.

And then, as the Bible advises, “having done all…stand.”  It’s not easy out there and you really do have to have the passion and persistence (and good feet) for the long haul.  Funding: Goes without saying – how long can you last?

Best wishes!  And, Happy Birthday to us, Happy Birthday to us.  Happy Birthday, Happy Birthday!  Happy Birthday to us…and many mooooooooore.  At 2, we are through the crawling phase and starting to walk upright.