Love the Leaf
Why and how coffee shops should do tea
by James Norwood Pratt

With more than $12 billion in total sales in 2006, the specialty coffee business sold coffee at approximately 15,500 coffeehouses or cafés, 3,600 kiosks, 2,900 carts and 1,900 roaster/retailer locations, according to SCAA data. The overwhelming majority of these enterprises, with the possible exception of roaster/retailers, could gain even more earnings by developing a tea program.

Tea, dear coffee colleagues? Aren't tea and coffee supposed to be rivals? Only in urban myth—the truth is that soft drinks are the main rival of both coffee and tea in the United States, and the good news is that soft drinks are losing ground. Although the coffee boom is old news—not that it's showing signs of slackening—of late tea is attracting more and more attention in media and public consciousness. The reasons for this are the same reasons coffee purveyors would now be wise to enter the tea market deliberately and knowledgeably.

REASON #1: IT'S THE MONEY
Recently, I made the long drive from Santa Fe, N.M., to Albuquerque, leaving before dawn without consuming any tea. I was rescued by my friends Ahmed and Reem Rahim, who had somehow gotten their estimable Numi teabags into the airport coffee establishment. I welcomed the opportunity to pay the exorbitant $1.75 charged for two teabags with a paper cup and hot water, and I noticed that nothing else the shop sold while I was there was nearly as profitable as the excellent Yunnan Breakfast I sat drinking.

REASON #2: IT'S NOT FOR EVERYBODY
I love tea, but I enjoy coffee, too—just less and less frequently. As baby boomers like me get older, coffee may cease to be our friend or frequent companion. We don't swear it off, but God knows we taper off significantly. Growing multitudes of Americans are turning to tea, and coffeehouses that don't offer tea simply lose our business. The tea lover demographic also includes youngsters—the group responsible for launching the white tea fad. They pack places like Teany, the shop started by rock celebrity Moby on Rivington Street in New York's Lower East Side. Young and old together are driving approximately 25 percent annual growth in overall specialty tea sales. Ignore us and miss out.

REASON #3: IT'S NOT HARD
Tea is nothing but hot water and dried leaf—don't be intimidated. Tea lovers would much prefer a tea that's well prepared, however humble, to any tea that's poorly prepared, however great. Keep it simple. Use water that's on boil and uncontaminated, and there's not much else you need to know to make money selling black tea. Just a few alterations to this method go into steeping green and white tea—and they are far less complicated than grinding and tamping espresso and steaming milk. Like chocolate bars, a small selection of quality tea bags, sachets and RTDs will add appreciably to your bottom line. For greater profit, don't just serve tea but sell it the way you do your whole coffee beans. Packaged lines like Numi, Taylors of Harrogate, Adagio, Harney & Sons and others are known for quality tea and faithful customers. Consider this the least you can do to perpetuate the coffee trade's old tradition and treat tea as an orphan product—a term of lament I first heard in 1980 from Mike Spillane, CEO of the G.S. Haly Co. Do no more than this, our American experience seems to show, and tea will still repay its cost many times over.

REASON #4: THINK CHAI—IT PAYS
The spiced milk tea that fuels India has come to the United States and settled into a growing share of this country's market for hot beverages. Partly thanks to Steve Smith, the now-departed CEO of Tazo, a Starbucks subsidiary, chai has become a category unto itself in America—neither coffee nor tea but with some of the appeal of each. Credit also goes to Heather MacMillan, who launched her pioneering RTD Oregon Chai brand around 1991, and to importer Devan Shah of International Tea Importers (ITI), which provided authentic Nilgiri tea as the base for all our first chais.

ITI currently wholesales two-dozen distinct and separate versions of chai, from masala and decaf to herbal, chocolate, coconut and kashmiri, omitting many like tulsi and white. Many coffeehouses—Starbucks foremost amongst them—offer a similar array of chai selections. It is a sort of crossover drink because chai, though tea-based, is not tea as such any more than it could be called coffee—it has become a free-standing category in its own right. Millions of consumers can't be wrong.

REASON #5: PERCHANCE TO DREAM ...
To dream the impossible dream is not necessary, as companies like Peet's Coffee & Tea prove. Aside from the coffee for which it is famous, Peet's is also the model tea retailer, providing consistently superior teas, both by the cup and by the pound. Why sell another's brand if you can have your own and maximize profits? The success of Peet's with tea is largely attributable to tea buyer (since circa 1985) Eliot Jordan, who has written:

"...No big-guy marketing budget can hold a candle to your enthusiastic, knowledgeable employees sharing a few ideas and answering questions from your customers. Your responsibilities are to get your staff excited about what they sell and to keep yourself constantly educated about the tea world. One way to do this is by tasting teas with your staff. As soon as you receive a new tea, sit down with your employees and sample it, asking them for their impressions ... this way, when they describe that tea to customers, they're speaking from experience, not second-hand information."

THE POWER OF INTEGRATION Consumer sophistication is on the rise, and what we drink shows it. We want it to be healthful and fun—we don't want it to be stressful, we don't want to feel stupid and we don't want to feel cheap. Another thing: We enjoy meeting other people congruent with our income and probable educational background in a social setting over what we drink. Your business is clearly such a gathering spot.

Cafés great and small must no longer consider tea an orphan product, but an integral ingredient in long-term success.

James Norwood Pratt is a widely read author on the subject of tea, with numerous columns, articles and interviews in overseas tea periodicals and books that have been translated into French, German, Czech and Chinese.

 

Comments on this article may be sent to comments@freshcup.com.