What does the recent planned closure of four Starbucks’ Teavana tea bar concept outlets (three in NYC, one in Beverly Hills, CA and one in Seattle) and converting them to Starbucks say about the marketing efforts and style of Big Tea? Despite their avowed affirmation that this move does not change the company’s “commitment to tea,” is this an admission that they are not the right company to bring a reliable and rewarding tea experience in a sit-down environment, doing for tea what they did for coffee? (Whatever your opinion of the Teavana line of packaged teas, you will continue to be able to purchase them through 350 Teavana outlets.)
One could conjecture that enjoying a cup of tea at home on a regular basis or in your local Mom-and-Pop-owned-and-operated shop suits the quiet, contemplative spirit of tea and is totally at odds with imbibing in a corporate cookie-cutter environments such as Teavana’s, despite the couches and midcentury Modern fixtures. Sitting down with a cuppa in places with a soul in a unique, non-synthetic setting created in large part by an owner who presides over the business is a way to cement the bond between customer and owner, between tea enthusiast and tea connoisseur over the longer haul.
Brewing a good cup of tea takes focus and precision (in short, finesse) that is apt to be lacking in a large chain operation, an operation overseen by regional managers who in turn oversee the local, often impermanent operations team, with more or less success. And the comfort of interacting with the owner and same staff every time one frequents the spot cannot be underestimated. As consumers, we crave pleasantly predictable transactions—being served the same tea by the same tea brewer; a person-to-person interchange that translates into great service with the accent on true hospitality. Can you get that in a corporate store run from afar? Would love to hear your thoughts and experiences. But in the meantime, I hope you continue to patronize your local tea shops which fly the flag of independence and provide the simple but meaningful warmth and hospitality upon which this kind of entrepreneurship rests.
I don’t think it’s so much the corporate problem with presentation of tea etc (they finesse coffee pretty well). I think that the masses aren’t quite ready for tea presented in such a way.
Starbucks tend to be pretty noisy places and it just doesn’t work for tea.
Chef, why don’t you start a tea shop that embodies what you believe would work for tea. With your background and love for tea, you might be the one who finally hits that perfect retail mix! I’d love to visit it if you do!
Do you want to partner up to create the perfect tea shop featuring tea-infused sweets and savories?
Hello Chef,
I would love to discuss the retail specialty tea concept with you. Absolutely let’s put our heads and backgrounds together on this subject and see what happens. Tell me the best way to contact you and I will do so! Thank you for the invitation.
I have to agree with Robert. A more personal touch is something that most of us crave. Whether it’s a local favorite restaurant where the owner who greets me knows my name and my favorite foods (“Are you having your regular this evening?” or the tea shop that knows I’m a green tea lover and mentions that they just got in something I might want to try, this adds another dimension to my experience. I feel like family or an old friend. I feel like they know my likes and dislikes. There’s an immediate intimacy that is created that removes the general experience of being anonymous in the world. This adds to my tea ritual on a deeper level. In addition, the sound volume in a tea shop tends to be much quieter than a coffee shop for some reason.
Having been at the helm of both small and large specialty tea operations for more than a decade I’ve had a front row seat to this debate. I don’t believe it’s a matter of size, but of focus and execution. Success and failure hinges more on the scales of authentic vs. inauthentic and customer-focused vs. profit-focused than on large vs. small corporations. I’ve personally seen both types of companies succeed and fail on both fronts.
A large company has the advantage of resources, but those resources come with added bureaucracy and complexity. Large organizations are excellent at replicating and achieving scale, but often less suited for rapid, nimble innovation. Small companies can be flexible and creative, but don’t typically have the resources to execute at the same level.
At the end of the day, great tea experiences are delivered by highly engaged, passionate people. Those people are attracted to companies that are authentic and dedicated to quality products and quality customer service.
It wasn’t that long ago Starbucks lost their focus on authenticity and dedication to quality and service in the search for scale and profitability. In 2009 the company was worth around $7 billion dollars and Wall Street questioned whether the company would survive. Howard returned and oversaw a changing of the guard and a return to the core values the company was founded on. Today, Starbucks is worth approximately $90 billion and is considered the 5th most respected consumer brand in the world.
The landscape in Specialty Tea is changing rapidly, but customer interest outpacing competition and there has never been more opportunity. Heres to raising the bar and sharing great tea with the world!
Well said Charles. I do believe it’s harder to sustain passionate and engaged workers on a larger scale however. Depending upon the mission of the corporation however, that helps to determine the possibilities.
Charles, you really hit the nail on the head and that’s the Catch 22. I agree..there’s never been more opportunity.
Hope you will come back and respond to this part of an article in World Tea News, Charles..would like to hear your response. Not sure who is being quoted here:
http://bit.ly/23JvefA
A flawed concept
There is no example in the history of retail of a successful small footprint chain of stores deriving half of their revenue from retail sales and half from foodservice. It’s never been done. Starbucks tried and ended up 95%+ foodservice. Teavana tried and ended up 95%+ retail. Many others have also taken a stab at it, and what we find consistently is that the two models are almost universally at odds, explains one retail consultant.
“In a café you want to see the same people over and over through the week. In retail you want to see people once every month or so to re-stock, or even less frequently for gifting. In foodservice you want seating in the window. In retail you want merchandise in the window,” he said.
“Put simply, the attempt to maximize both retail and foodservice resulted in a mediocre execution of each,” he said.
The analysis is accurate. Teavana was trying to do something with the Tea Bars that had never been done before. Starbucks has a history of successfully changing the game and they were trying to do it again.
It’s hard for a publicly traded, high growth company to stick long term with innovation strategies that don’t pay off quickly. Starbucks stores perform at roughly twice the percentage profitability of the industry average. So even if Teavana stores were profitable by normal measures, it might not be worth it for Starbucks to invest in opening those vs. more coffee shops. In similar fashion the company is no longer expanding Seattle’s Best, they closed all 23 La Boulange stores and closed a handful of Evolution Fresh stores.
There are plenty of examples on the market of profitable tea cafes and profitable tea retail stores. The closure of the Tea Bars is a statement on the profitability of a combined foodservice and specialty retail model, and a statement on the relative profitably of investing in more Starbucks outlets vs. almost any other form of retail (except I suppose Apple stores or recreational cannabis. LOL)
Thanks so much for the insight, Charles. You have always said that the Starbucks of Tea would be Starbucks. We should most likely thank them for doing that market test for all of us.