For many readers of this tea blog, checking in on the tea industry means attending events like the recently held World Tea Expo or reading the latest issues of the Tea or Fresh Cup magazines. If your interest in tea has brought you in contact with these forms of tea-centric content, your knowledge level has probably risen above that of the casual or first-time tea drinker. One of the points at which the tea industry and the beginning tea consumer intersect is in the tea aisle of a Whole Foods grocery store. I’ve found that walking the constantly changing roster of brands along this aisle is a good way to gauge what is happening in the American tea market.
For many small specialty tea companies, Whole Foods is the [W]Holy Grail when it comes to where they want to offer their brands for sale. The feeling is that after spending considerable time, money, and effort sourcing teas, developing a customer base, improving packaging, and possibly creating a tea bag or bottled tea line, their teas have “arrived” if they have made it onto a shelf at Whole Foods. However, the joy of arrival is short-lived because as soon as the packages of tea arrive on the shelves, the clock begins ticking. If sales do not meet expectations, a company’s teas are likely to depart quickly.
Whole Foods is used as an example here, but the same applies to other similar grocery or gourmet food store chains that offer more adventurous tea offerings. They are the tipping point that provides an opportunity for customers to venture beyond tea offerings they are more familiar with, such as Lipton, Tetley, Red Rose, Bigelow, and Celestial Seasonings. For growing specialty tea companies hoping to gain wider exposure, gaining entry into upscale grocery or gourmet food stores can easily erode their first love of tea. Manageable details executed with passion are transformed into larger operational and supply chain challenges as they try to take their teas to the level of an identifiable consumer brand. Sourcing the few pounds of tea that a small tea company purchases to package and ship to order is a distinctly different business model from buying hundreds of pounds of tea, and then inspecting, packaging, warehousing, and shipping that tea through distribution centers in order to maintain sales and shelf space. Many small companies find the adjustment overwhelming and are unable to scale up their business quickly enough to capture an increased market share.
Here are some random thoughts I had while walking down the Whole Foods tea aisle recently:
- How much of the tea offering is reverse engineered? The packaging has to fit within the shelf space allotted and the price has ideally to be below $9.99
- Two medium-sized tea companies whose teas used to be in this Whole Foods are gone. Not sold-out, gone
- Tazo’s new teas and packaging design are on the shelves
- Even with a wide selection, you are hard pressed to find loose-leaf teas
- One small tea company has been demoted to the bottom shelf with three package faceouts; the writing is on the wall
Only a few years ago, the width of the tea section in the coffee and tea aisle in most grocery stores was 3 to 4 feet, tops. This tea section is almost 12 feet wide – progress!
I’ve definitely noticed a change in the tea selection at Whole Foods. When I first became interested in tea, they had a large tea offering. Rishi and Adagio were both given large display racks and they also had a decent selection of teaware. It seems a bit counter intuitive because I would think that their target customer is the type of person who wold be interested in loose leaf tea.
I understand that there are many issues that influence what shelf a product is on and of course whether that product is sold at all at a particular store. I agree that Whole Foods is the place to be for a tea company. The growth, as you mention, has been huge. I too am disappointed to see that whole leaf teas haven’t kept up the pace. I’m never sure if that’s due to customer preferences or other factors. I would like to know if any tea shops, who offer both whole leaf and tea bag teas have noticed any differences in terms of growth, over the last year. The problem is that those making the effort to go to a tea shop to purchase their teas are probably a different type of consumer than those who are buying their tea at the general market.
I wonder what kind of response you would get from the Whole Food’s manager if you inquired about the absence of the medium size tea company’s presence – or absence. Let us know if you do so.
What a dilemma! How does a tea company remain true to the notion that smaller is better AND achieve the industry benchmark at Whole Foods? Your post poses the essential question, “How does a brand stay on the shelf after arriving?” Why doesn’t Whole Foods have tea tasting booths, like they do for a featured cheese or dip? In our small town, the health food store within-a-store has designated several shelf-feet to teas, bulk and bags, Blends mostly, I suspect the people buying these teas are similar to the lad who buys a bottle of wine for a special date, and what isn’t consumed goes stale over the next few months.
Years ago, my ex-partner and I were offered space near Peet’s coffee in Bristol Farms after doing a demo there before their buyer and others, a truly, very, very upscale small chain in So Cal. We just weren’t ready to take on anything that large but wanted to see if we were on the right track with our product line. You’ve brought up some great points on the problem with being ‘small’ and wanting even small to medium sized chain accounts, especially in the food/beverage business…money/funding being the elephant in the room.
Just as wine doesn’t sell itself, except by the color and design of a label and perhaps the varietal if that information is clearly shown on the label, tea needs shelf talkers, people talking, demos, tastings, educated representatives of the tea company making noise about their products….if lines have been discontinued at your local Whole Foods store it’s probably in large part due to the fact that service personnel, stock clerks, whomever, was talking about the products, giving potential consumers a way to differentiate one tea from the other. If it comes down to people buying a tea otherwise unfamiliar to them, based on the perceived “prettiness” of the label and packaging, then we are not making much progress in marketing tea to the unitiated (or even to those who know about these things).
Michelle, there is an expectation that if you are a new product, in a Whole Foods that you are going to be actively in the store sampling and talking up that your product is now available in a particular Whole Foods store or region. If you can work the “local” marketing angle, even better. That said, at the end of the week the sales report comes out and you live and die by the numbers. Even more difficult than getting into a location initially is trying to get a second chance when your product has been pulled from the shelves.