Fresh Cup Magazine

The Charm of Chai
Tea's Most Comforting Concoction Continues to Secure a Place
on Café Menus Across North America
By Allen Kinast

A few years back, when chai was the new big beverage thing in the United States, everyone, it seemed, had his or her "first-cup-of-chai" story. Typically, such chai tales were set in some remote corner of India or Nepal, only hours after the narrator summited his or her first 20,000-foot peak or took an elephant ride around the Taj Mahal. At times, these reminiscences could border on the apocryphal, as the storytellers recalled with amazing clarity the shoe size of the chaiwallah who first handed them a cup of that spicy, milky tea.

   These days, the buzz may have waned, and the people who cart around their "first-cup-of-chai" stories are a dime a dozen. But what has replaced the exotic folklore is a solid beverage category that continues to grow throughout coffee shops and tearooms across North America. In fact, according to Sage Group International's fourth edition of the U.S. Tea Is "Hot" Report, 2003 sales of chai in the U.S. are projected to reach upwards of $90 million.

   Personally, I think it's a shame. Not the fact that chai is a drink that's here to stay. What I'm really sore about is that I never got to tell my "first-cup-of-chai" story. Because my chai story, unlike all those other tall tales, is a veritable made-for-TV movie. See, chai actually saved my life.

   But before we get to that, let's look at what's new on the chai scene. I recently spoke with several owners of coffee shops and teahouses in the United States and Canada to see how chai is working as part of their businesses today. What emerges is a beverage category that differs greatly from business to business.

   Miriam Novalle, owner of New York City's T Salon, was there at the beginning of the chai craze. In fact, according to her, she was a big reason the craze got its start in the first place. Part of the vanguard of tea shop owners who began blending a unique variety of chais in the early '90s, Novalle agrees that while the chatter about chai may have ebbed some, she still feels that "chai is a wonderful addition to the offerings. It's become a recognizable category, and that's a really good thing."

   Novalle put chai on T Salon's menu back in 1991. Since then, she has constantly developed new chai offerings, and T Salon currently has several noteworthy chais on a menu featuring more than 450 different tea blends. There's Vanilla Chai, Lemon Chai, Mandarin Chai, and Novalle's current favorite, "Chelsea Chai" (named after T Salon's "hood"), an intoxicating blend of teas, cardamom, ginger, a hint of chocolate, and a few other secret ingredients that, even with my most charming journalistic fawning, I was unable to extract from her.

   For Novalle, the chance to pair unexpected teas and spices is what makes creating chai so interesting. Novalle's philosophy may be playful-she jokingly proclaims that her chais have sometimes included "whatever was running around the kitchen sink"-but her ultimate aim is to take her chai to a new level of flavor experience.

   At T Salon, several food items have proven popular pairings with chai. A triple-decker smoked salmon sandwich with dill, sprouts, cucumbers, and peppered cream cheese is a big hit with the chai crowd. Novalle has also noticed that customers lean toward fruit and nut scones with their chai.

   While T Salon's Chelsea Chai has also been turned into sorbet and ice cream flavors, it's most daring pairings have been for a Mexican restaurant that mixed it with tequila, and a Japanese restaurant that blended it into a chai sake. In Novalle's own tearoom, chai has been successfully blended with butter to create a "boutique spread," and chai's aromatic charms have even been put into the service of candles and incense.

   What sort of customer comes in for chai at T Salon? "It's all over the board," says Novalle. "Everyday we get anywhere from 50 to 100 people asking what sort of chai we have." Novalle especially enjoys working with customers who got their first taste of chai at one of the more commercial coffeehouses. "It's a great opportunity for me and my crew to educate them with lots of passion and understanding," she says. "They walk away new converts."

   An equally enthusiastic attitude about chai can be found in Brendan Waye, founder of the Canadian-based Steeps Chai. With teahouses in both Edmonton and Calgary and a thriving wholesale spin-off that currently produces more than 8000 liters of chai a month, Waye's business is chai. (Accordingly, he has an extremely good "first-cup-of-chai" story.) Chai, served as lattes and sold in loose form, accounts for 45 percent of Steeps' sales, and Waye believes the drink's popularity is still on the rise.

   Steeps serves three types of chai: Authentic Blend; the caffeine-free Herbal Chai; and Peppermint Green Tea Chai, which features sencha green tea and organic peppermint leaves. In addition, Steeps has brought out a Chai Smoothie designed for blenders and granita machines. It features brewed chai, sweetener and an extra dash of vanilla for a cool and refreshing iced drink. Another recent offering is Chai Sprinkles, an intensely aromatic blend of allspice, cinnamon, cardamom, black pepper, and ginger that emphasize the chai-ness of any latte offering.

   How has chai become such a crucial part of Steeps' success? Waye credits the drink's great margins (per unit cost is about 90 cents for a drink that retails in Canada for $4.25 for a 16-ounce serving) and an intensive sampling program. "Every customer who comes through the doors gets a sample of chai handed to them, and at least 60 percent of them order a chai latte right on the spot," he says. "It's truly the number one way to reach the customer."

   Waye has also cultivated several sponsorships aimed at outdoor enthusiasts. Steeps is a major sponsor of the Calgary Mountain Slide Show festival, which attracts 2000 of Canada's best climbers annually. The company also sponsors its own Adventure Racing team, whose clothing proudly bears the slogan "Powered by Steeps Chai."

   Recognizing that women between the ages of 30 and 55 are his biggest chai consumers, Waye also exhibits at several Women's Shows that travel to Edmonton and Calgary each year, where he passes out free samples to thousands of professional women. It's a strategy that works. "Our business spikes significantly after these shows," says Waye.

   While businesses like T Salon and Steeps are actively experimenting with the chai category, how does the beverage figure into operations with less focus on chai? For Jhanne Jasmine, co-owner of Portland, Oregon's The TeaZone, chai should deliver "a nice punch of spice and tea flavors." In business for nearly four years, The TeaZone shares a block with art galleries and trendy cafés that dot this part of the city's revitalized Pearl District. It's an ideal location for selling high-quality tea beverages to people who have the means and the mood for the serious pleasure chai can deliver.

   The TeaZone offers a traditional black tea chai and a more unconventional herbal chai; both are loose-leaf-based and freshly brewed. Customers typically choose the type of dairy or non-dairy addition they want. "Generally, they're looking for the body that milk gives," says Jasmine. Sweetness comes in the form of honey added to a customer's preference.

   Both chais have full flavors, but the herbal chai is particularly popular. The secret? "A rooibos base gives our non-caffeinated chai a solid body," Jasmine explains. "When my customers learn that it's rooibos, they're sold. Generally they've already heard rooibos' positive antioxidant story, and the fact that our herbal chai is organic also helps."

   Chai represents about 20 percent of The TeaZone's overall beverage sales. The chai smoothie, which was added to the menu last summer, has earned a number of loyal drinkers, and for good reason. This drink has all the complex flavors of a hot chai, but it also leaves a hint of rosewater in its finish that is refreshing and unexpected. Jasmine expects the popularity of the chai smoothie to increase again as the weather warms up, although Portland's mild winters make it a viable year-round menu option.

   Jasmine's overall attitude about marketing chai is refreshingly old-school. While she does mention chai in the ads she places in local newspapers, Jasmine firmly believes that word-of-mouth is the most effective marketing. "Our chai drinkers will actually drive across town to have our chai," she says. "That's saying a lot in a town where you can buy chai on almost any street corner."

   Across the country, Gerry Epstein has been running Grove Avenue Coffee and Tea in Richmond, Va., for the past three years. Like The TeaZone, Grove Avenue is situated in one of the city's more fashionable historical districts. Epstein is a guy who sees non-convention as a virtue. He's been known to run out and grab customers walking along the street with a competitor's cup and challenge them "to a trade-straight up."

   Grove Avenue Coffee and Tea carries Big Train Spiced Chai Tea, which the company purchases in 3.5-pound bulk bags. Epstein is delighted with the quality this chai delivers, and those spontaneous on-the-street trades of his chai lattes for his competitors' cups usually result in new customers who often return again and again. In addition to prepared chai drinks, Epstein also sells chai to his customers in a 12-ounce retail-sized bag. He estimates that seven percent of his sales derive from chai, with sales of the drink peaking during the winter.

   In a move of pure gastronomic decadence, Grove Avenue now features a "Chai Steamer"-a scoop of locally produced chai ice cream, steamed with the espresso machine wand along with half-and-half and some dry mix chai to boost the flavor. With the ice cream weighing in at 18 percent butterfat, this concoction is reserved for customers in desperate need of a full-blown comfort drink.

   Like many other café owners, Epstein doesn't see an exclusive demographic when it comes to chai sales, although Grove Avenue's proximity to college campuses is likely the reason chai is extremely popular with the local 15- to 23-year-old crowd. Epstein feels chai's popularity is still increasing, but his primary goal as a business owner is, as he puts it, "to keep students interested." Toward that end, you'll often find him out on the street, sampling chai and getting "face-to-face with my next repeat customer."

   Of course, when reporting on chai's presence in the beverage market, one would be remiss not to acknowledge the amazing growth of Oregon Chai. The Portland, Ore.-based company's prepackaged chai concentrates are a market leader for both foodservice and grocery segments throughout America. The company's Original Chai Tea Latte concentrate is a sort of Americanized version of chai, sweet and intense in its flavors. In recent years, Oregon Chai has expanded its product offerings to include a caffeine-free chai, several flavored and seasonal chais, and a "slightly sweet" version of the original brand (developed in response to extensive surveys of retail customers). Coffeehouses across the country have gravitated to this West Coast brand of chai for its name recognition, its minimal preparation requirements (just mix the concentrate with milk and heat it up), and its track record for quickly and conveniently adding an incremental revenue stream to an existing coffee- or teahouse operation.

   Nancy's Coffee, which has 30 coffee bars in shopping malls throughout the northeastern U.S., added Oregon Chai to its menu six years ago. According to Roxanne Quinn, the company's buyer, "We heard about Oregon Chai and thought it might be a great way to get the traditional tea drinker to branch out and come into our shops." Quinn readily admits that while many Nancy's Coffee customers tend to not be very experimental, her chai drinkers tend to be more adventurous. "The average chai drinker at Nancy's is a mother with kids, between 18 and 45, who wants something more organic, more soothing," she says. "Typically, she's heard something about the positive health benefits of tea." Quinn thinks her chai enthusiasts bring a different rationale to their drink purchase. Whereas the coffee customers often regard their purchases as a necessary energy boost, "our chai customers see it as a reward drink, a moment of relaxation in their busy day," she says.

   Last fall, Nancy's Coffee began offering a Chai-der, a chai and apple cider mix served either steamed or cold. This seasonal drink has proved to be extremely popular addition to the menu, as have other playful concoctions, such as a hot Caramel Chai Latte. Quinn is impressed by Oregon Chai's commitment to helping with sampling. "Non-coffee drinkers sometimes think chai will have the bitterness they associate with coffee, and sampling is great way to overcome that fear," she says.

   From premixed chai concentrates to hand-picked loose-leaf brews, chai seems to have staying power. For the new owner of a coffee or tea establishment trying to decide how chai might fit into her or his business, I think the words of The TeaZone's Jhanne Jasmine ring true: "Think in terms of practicality for your business. It's easy to get stretched too thin from an operational standpoint, and then neither you nor the customer will be happy."

   Perhaps you're still wondering: How did chai save my life? Without further ado, here's my life-saving "first-cup-of-chai" story.

   My girlfriend and I were scheduled for a walking tour in Royal Chitwan National Park in Nepal, a game park that's packed with dangerous animals like rhinoceros, tigers, crocodiles, and elephants. Back in 1992, Chitwan was one of those curious places where tourists could stroll around the savannah under the direction of guides equipped with nothing more than a walking stick and an unhealthy dose of machismo.

   Our guide for the day, in customary fashion, had steered us to his mother's teahouse just outside the park's gate before we got going. There, mom poured us a milky concoction called chai, while her son proceeded to frighten us with warnings of what we would most likely come across on our walk. Between sips of the marvelous spicy tea, he demonstrated important survival tips, such as how to zigzag away from a charging rhino. Fascinated, we decided to have more chai.

   Hours passed. The terrifying stories just kept coming, as did the chai. Suddenly it was lunchtime-somosas and chai for everyone! Six cups of chai and a few trips to the loo later, the prospect of walking in the woods with free-roaming carnivores had become downright silly. We weren't going anywhere. Our guide was OK with our decision, and his mother happily tallied up our bill.

   We would eventually stump up and venture into Chitwan on the backs of well-trained pachyderms. We did spot a few rhinos, though they knew better than to charge our elephants, so we kept the zigzagging to a minimum. In the end, we were happy that our previous day's guide had led us to nothing more exciting than a good cup of chai.

Allen Kinast is a freelance writer in Portland, Oregon.