munsch_wholefoods_tea_aisle

This article was originally published on T Ching in July of 2013.

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!