Tea Retailing: A Brave New World

The emerging specialty tea industry is opening up plenty of opportunity for retail and foodservice tea ventures across North America. Beyond the race to see who builds the first multi-unit tea chains, hundreds of new entrepreneurs are entering the tea business with storefronts and merchandising of every imaginable scheme and style. Like the gold rush of the mid-1800's there are fortunes to be made, but all that glitters is not golden and there are as many hurdles as opportunities awaiting an eager tea industry. The tea industry shimmers and entices entrepreneurs with a romance and appeal that is heady. The fact is that tea retailing - café, salon, shop or bar - requires adequate capital, plenty of planning and endless determination. There will be plenty of successes along with a few failures as the specialty tea industry unfolds over the next few years. Here are a few success keys for new and existing tea enterprises to ponder as they forge ahead in the brave new world of specialty tea retailing.

All that glitters isn't gold, unless it's a Turmeric Latte
All that glitters isn't gold, unless it's a Turmeric Latte

Professional Staff
Finding staff passionate enough about tea to stay on for moderate wages - until the tea retail wave allows greater pay scales - and learn the complexity of specialty tea will be another challenge. There are plenty of people eager to work in the merging specialty tea industry, but fewer who can stay on for the years it takes to learn tea 'inside and out' and attain true mastery. The key here is to provide even the smallest benefits - performance bonuses, deep product discounts, flexible schedules - to help make the difference in lower pay scales that many independent retailers offer shorter term employees. Ongoing training is another crucial part of staff retention and optimization. Having your team 'cup' all of the tea offerings - not just their favorites - helps them in turn, describe and sell teas to your customers in a professional and competent manner.

Customer Loyalty
As specialty tea shows up in more mainstream sales channels, retailers will be forced to learn the key lesson afforded by America's health food retailers as their hard earned market share spilled into supermarkets, drug stores and catalogues. By reminding consumers of the extra measure of product knowledge and service specialty tea retailers provide over other suppliers - mass market outlets for tea - a vital loyalty edge and wedge is secured. The mantra that 'share of market equals share of mind' is paramount to reminding customers of the value and satisfaction derived from dedicated outlets. The retail winners will educate and motivate the millions of new tea consumers heading into their shops. The success key will be to secure customer loyalty through superior service and incentives. Many independent bookstores, vitamin shops and coffee cafes have thrived in spite of intense competition from bigger ventures, mostly due to a never-ending focus on direct customer service, discounts and other programs that lock-in loyalty. In fact, the specialty coffee industry has proven that a flood of high-powered competition in a given neighborhood does not mean the end of small businesses, but often times a boost for independents. For now smaller tea ventures pretty much have an open field with little direct competition. As the specialty retail and foodservice industry matures, dedicated tea chains will create stress - much of it unwarranted - with independent operators already in place. Relax and focus on cementing customer loyalty.

Location is King, Queen and Tea Castle
On the one hand the marketplace for new tea cafes, salons, bars and rooms is wide open with plenty of available retail space in thousands of great cities. As the marketplace is still in the early phases of life cycle, locations that might otherwise be perfect in a high paced or mature marketplace may turn out to be fatal. In other words, let the renter be aware of being lulled into places and spaces that may be off the beaten path or simply not viable for a successful tea operation. Emerging markets tend to create the illusion that everything "is coming up roses"- in this case the tea is "hot" everywhere - and thereby cloud the objective judgments of rookie entrepreneurs. Kiosk, corners and short-term leases may be the ideal solution for new tea operations that have tight budgets or limited experience. Trust your gut and go for the spaces that feel right and have a successful history.

Competition is Healthy
Another dilemma for US specialty tea cafes, bars and tearooms is the fact the specialty coffee venues are increasingly adding better teas to their menus, while their counterparts in tea avoid selling coffee. This is not to suggest that tea outlets should add coffee to their menus, but rather be aware of the situation and once again, realize that the marketplace for finer specialty teas is expanding. Sales of specialty tea within coffee outlets will actually stimulate the entire tea market, but it's vital to procure and serve the finest teas possible. Additionally, the addition of diverse menu offerings - iced teas, exotic foods, blender drinks in some locales - will further attract customers who might otherwise opt to sip and relax elsewhere.

Products that Deliver
As the specialty tea industry matures, an endless stream of new products is being showcased for retailers and consumers. Retailers have many more product choices than ever (not just new colors and sizes) with new brewing, storage and serving accoutrements. This exciting glut of new tea accessories are crowding store shelves and squeeze the buying time of management. While most are superb, some new items have not been field tested to see if they truly deliver results for consumers. As tea consumers become more sophisticated and discerning, the pressure will increase to refine the products so that esthetics and function are comparable. Teapots that look spectacular but drip or have lids that fall-off when tilted, infusers that wear out quickly and tea kettles that have unwieldy handles, are but a few of the examples where consumers and retailers will make or break the success of new items. Retailers need to open dialogues with manufacturers of tea accessories and explain what has worked well, what has not everything in between. Manufacturers will need to escalate their field research and learn what retailers like, want and the finer nuances of finer tea service.

Properly Brewed Teas
It may sound obvious, perhaps even trite, but some tea retailers are so focused on the bigger picture tasks of daily operations that the basics of brewing and serving tea are lost or ignored. A periodic reexamination of in-store tea quality is paramount to total success. This is also an area where owner-manager personal bias is frequently to blame when it comes to determining the ultimate way a given business should prepare and serve their tea offerings. Beyond the ever important water temperatures and quality dried tea are the crucial decisions about amount of tea for a given teapot, how to convey proper steeping times and keeping brewed tea liquor suitably warm after steeping.

Brian Keating is a veteran tea and natural foods retailer, product developer and consultant. For over a decade he has also published the Tea Is "Hot" Report, the Ultimate Tea Business Reference Guidebook -