Recently, there has been quite a bit of discussion on T Ching about tea bags and sachets (aka large tea bags).  It inspired me to think about this more than I usually do, because even among what are considered “specialty tea retailers,” there seems to be promotion of these vehicles of delivery in order to to the masses and boost sales.  Charles Cain pointed out that some tea bags in a pyramidal shape with outstanding, appealing, and upscale packaging were commanding $5.00 for two teabags as gift items.  Wowzers!

My question is: How far do we, as specialty tea retailers, want to carry this premise and still call ourselves specialty tea retailers?  At what point do we just become retailers who carry the same products we can now find in specialty grocery stores – even in antique shops or bagel places, where I saw these incredibly packaged and branded tea sachets?  I’m quite sure other retailers will jump on board.  Shoot, there are products in Walmart now I never dreamed would be there – like organic produce.  I can see it now – Walmart Private Label Specialty Tea, in sachets, of course.  Would they sell?  Duh.

The convenience argument can be taken to extremes.  Even with a tea bag / sachet, tea must still be steeped.  Entrepreneurs, how about a tea bag / sachet that times itself?  Or one that disposes of itself, so that you don’t have to deal with a soggy, used sachet in the car?  Wait – what about instant powdered tea?  Oh, that’s right – it has already been done.  I remember Mom stirring it into some water and adding ice.  Argh.  The kind with the convenient fake lemon flavored powder already added (so we didn’t have to cut open and squeeze in a real messy, juicy lemon) was my favorite.

We used to be in the mass-market business.  We wholesaled impulse products (the kind you would see hanging on plastic strips along the aisles of Walmart and grocery chain stores) to the largest companies and chains in the world.  I remember well the buyers beating us down for pennies, saying they could just private label a product if we couldn’t get it to them for what they wanted.  They do anyway.  I remember telling my husband that the next business we started would be an artisan business – one we could feel really good about, one that was pure quality and one in which the product would bring excitement and happiness to the faces of our customers.  I just haven’t seen tea bags do that for anyone, but I have seen loose-leaf tea do that, every single day we open our doors.  I’ve seen how excited customers get when we bring in a new gem.  I remember how excited they were when they first used the stainless steel infuser we sell that doesn’t even let a rooibos needle through.  They tell us about their growing collection of our loose-leaf teas, and how they have to hide it from their mates, because they raid the stash.

Now, I understand business, and I understand that the specialty tea and trade organizations are there to promote tea in all its forms.  But we, as individual businesspeople, have to choose where we fit and want to be in the overall industry.  So, I thought about the “tea bag / sachet vs. loose leaf” aspects of other niches, as follows:

Convenience: McDonald’s
Artisan: Bobby’s (Flay) Burgers

Convenience: Starbucks’ drive-throughs and McDonalds (again)
Artisan: Vivace

Ice Cream
Convenience: McDonald’s drive-through soft serve (see a trend?)
Artisan: L.A. Creamery

The beef industry sells more meat through “convenience” models – so does the coffee industry, the ice cream industry, and so on.  The specialty tea industry will sell more tea overall through wholesalers, retailers, and growers who appeal to the masses with tea bags / sachets and instant powders in a jar.  Just spoon, add water, and serve.  Presto – convenience and big bucks!

A while back I read a consumer review of a company, in which the reviewer, in seeming frustration, said something like: “It looks like the concept at this place is ‘we’ll sell anything just to keep the doors’.”  Will specialty tea retailers decide to sell instant tea to consumers in jars with upscale labels at some point because “people want convenience”?  Starbucks sells a lot of Via, I’m guessing.  I am wondering if anyone here has numbers comparing dollar amount of sales of instant powdered teas to bagged / sacheted teas?  There is mass-market demand for tea powder, because these jars have been in grocery chains since I was a kid.  That’s some time!

Teavana has sold nothing but loose leaf and, to date, has been the most successful U.S. specialty tea retailer in terms of growth.  Argo is coming up in numbers as a loose-leaf concept (don’t think they sell bags / sachets) and Teaopia and David’s Tea in Canada are red hot with loose-leaf tea.
Why hasn’t loose-leaf tea taken off like specialty coffee as a retail concept?  I don’t think it’s because of a lack of tea bags / sachets – they have been part of the Victorian tea room concept forever.  In fact, I think the presence of tea bags / sachets is part of why the concept HASN’T taken off like specialty coffee.  I believe it’s precisely because tea has always been looked at as part of the “red hat” world of frilly doilies and tea bags … and now pretty sachets.

Specialty coffee concepts really took off when Starbucks’ Howard Schultz gave specialty coffee/espresso his version of snob appeal using a European flair and making customers feel “I’m special and sophisticated because I know about espresso and specialty coffee and how to order in Italian-sounding sizes.”  I believe that when quality loose-leaf tea is presented with passion and panache, with functional, appealing, and innovative brewing equipment, and in environments that feel upscale, cutting edge, quality, loose-leaf tea will really take off.   And yes, this is beginning to happen.
I wish investors who are looking at this niche would look beyond who has the biggest war chest or slickest management team and start doing their homework, searching for the needles in the haystack with techonology, fresh ideas, and amazing delivery systems.  Are you an investor out there?  Maybe you should be more than just a “Shark Tank” wannabe and really do your homework.  You might miss the next big idea.

Now I’ll go have an amazing cup of loose-leaf tea – sans sachet – with no messy non-biodegradable silk or paper or corn-based product to dispose of – so inconvenient!