COP28 Declaration is Good News for Tea Smallholders | Sun Garden Tea Merges with QTrade Teas | It’s Easier Now to Attend Chinese Tea Tradeshows | Goodricke Group Achieves Carbon Neutral Tea Production
Tea News for the week ending Dec. 8
In the 1990s and early 2000s, curating a catalog of 200 direct-sourced teas, establishing a small chain of neighborhood tea shops, launching a formal tea school, and selling tea online to people worldwide was pretty ambitious. Twenty-five years later, Montreal-based Camellia Sinensis, having survived pandemic peril, has emerged with vigor in a configuration admired for its innovative approach to experiential retail. Camellia Sinensis even helped finance a factory in South India to produce tea on demand. Partner Kevin Gascoyne joins us during the company’s 25th Anniversary year to share valuable insights and a few missteps while traveling a long path to success.
UN: Bring the Vulnerable to ‘Front of the Line’ for Climate Funding
By Dan Bolton
A Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action adopted by 134 delegates to COP 28 UAE will provide $2.5 billion to address agriculture-related climate issues.
The declaration was accompanied by the announcement of several related initiatives, including a $200 million agriculture-related research partnership between the UAE and the Bill & Melinda Gates Foundation.
UAE Minister of Climate Change and Environment Mariam Mohammed Almheiri said, “Countries must put food systems and agriculture at the heart of their climate ambitions, addressing both global emissions and protecting the lives and livelihoods of farmers living on the front line of climate change.”
According to the UN Intergovernmental Panel on Climate Change, some 3.5 billion people, nearly half of humanity, live in areas highly vulnerable to climate change. OCHA climate team head Greg Puley told the conference’s participants on Monday that it was a “grave injustice” that people on the frontlines of the climate crisis who were least responsible for it, too often found themselves “at the back of the line” for climate funding.
Commentators and agriculture experts say COP 28 recognized the important link between food and climate in the declaration. Delegates affirming the statement represent 5.7 billion people, including 500 million farmers. The UN Conference of Parties resulted in the Paris Accords in 2015, signed by 200 countries that agreed to limit long-term global temperatures from increasing above 1.5C. Temperatures currently stand at 1.2C compared to pre-industrial times. Estimates suggest temperatures will increase by 2.4C to 2.7C by 2100. The window for keeping within the 1.5C limit is “rapidly narrowing,” according to the UN.
Unilever called for urgent climate action. The company, still a major player in tea, has a visible leadership role in investing in renewable energy, switching to low-carbon feedstocks as alternatives to fossil-fuel-based chemicals, and pledging to protect and regenerate 1.5 million hectares of land, forests, and oceans by 2030. The company said it is already sourcing 93% of its electricity from renewable sources.
“The world isn’t reducing emissions quickly enough to meet global targets and avoid climate breakdown,” writes Unilever, adding that it “calls on governments attending COP 28 to increase ambition and accelerate actions urgently, we can go further, faster in the race to net zero.”
COP 28 Advisor Edward Leo Davey told VOA that genuine implementation of the declaration “will represent a significant positive step forward in the lives of smallholder farmers.”
Farmers were encouraged to adopt sustainable practices, including organic farming and agroecology, to reduce harmful agrochemicals, conserve water resources, and protect soil health.
Episode 146 | COP28 Declaration is Good News for Tea Smallholders | Sun Garden Tea Merges with QTrade Teas | It’s Easier Now to Attend Chinese Tea Tradeshows | Goodricke Group Achieves Carbon Neutral Tea Production | PLUS Kevin Gascoyne. a partner at Montreal-based Camellia Sinensis shares valuable insights, innovations and a few missteps blazing a 25-year path to success. | Episode 146 |
Tea is well suited to experiential retail, a type of physical retail marketing that offers customers experiences beyond browsing. Tea retailers worldwide are experimenting with sophisticated sampling, live music, art, interactive displays, video walls depicting growers in the tea lands, and even making cameras available for customers to record and share experiences. Experiential tea retailers play an important role in converting commodity tea drinkers to informed enthusiasts.
Paper & Tea’s lofty ceilings and large windows have a captivating effect on passersby attracted to their brightly lit interiors, colorful displays, and a wide variety of fine teas to sample. Eduardo Molina, Head of Tea Experience at P&T, explains, “Our main idea, when somebody steps into one of our stores, is for customers to live an experience they will always remember — an experience they will share with others.” Molina is responsible for creating an alluring experience for every customer visit.
Listen to the interview.
P&T is Not Just for Tea Drinkers
By Dan Bolton
Eduardo Molina, 37, is originally from Chile, a narrow coastal country whose people drink more tea than any country in South America. Eduardo embraced the tea-drinking culture, discovering his passion for tea working in hospitality at the Ritz Carlton Hotel in Santiago in 2007. He has since traveled extensively in the tea lands. “The culture and history of tea is fascinating,” he says. His special focus is training. “I love training people how to present, sell, and tell stories about tea,” says Eduardo. He has ten years of retail experience, including three years as the co-founder and tea sommelier of Adagio Teas in Chile. He taught at the Chilean Tea Academy and joined P&T in Berlin in May 2018 as product manager for new business development. As Head of Tea Experience, he is responsible for marketing the new properties and training staff. He leads the team that created the in-store experience at every location, including the company’s soon-to-open 31st store.
Dan Bolton: Why would someone operating a tea shop consider experiential retail? What benefits does it hold?
Eduardo Molina: It depends a lot on the kind of product that you are offering.
Not every product can be described as one of the best to put on a show, which is what we are trying to do in our stores.
When somebody steps into one of our stores, our main idea is to live an experience they will always remember — an experience they will share with others. We want them to say, “I had the most amazing experience.”
And that starts with welcoming. We hire “personalities,” so to speak —people who are easygoing, smiley, and full of good energy. Not necessarily tea-drinking people.
We are opening on the main streets in downtown locations where there is a lot of flow and a lot of people passing by, which is also a positive thing; it leads to the success of these openings.
We do have a lot of tea nerds joining our team, but for us, it’s not a requirement to drink tea. We know we will convert them anyway the same way we attract them. Yeah, it’s a given. Being inside of this environment will turn you into a tea drinker anyway.
Browsing is nothing new for someone who enters a store and tries on shoes, a T-shirt, or a sweater.
To be effective, you need to make a difference and that difference usually occurs with the body’s sensors. For example, when smelling something you haven’t smelled in a while, or when you smell something that reminds you of a moment you lived in the past, or when you taste something you have never tasted.
We play with those things as we welcome somebody in the store (or grab them from the street). We attract people with the whole design of our stores, which are very inviting, warm, and welcoming.
Our windows are very bright and positioned so that you can see inside the store, see what is happening, and awaken curiosity.
Once they are in, the process starts with a welcome tea we created.
So, we have something in every store right now. We have opened 28 in a year — 28 in six countries. So, it’s been crazy since almost every second week, there is an opening.
In the center of every store, there is the tea bar — I know, I know, having a place to taste tea is not a groundbreaking idea — but the way we present it can be described as “very deliberate.” We are a modern company. Paper and Tea is 12 years old. So, we’re not a 150-year-old company. We’re not a traditional tea house.
We are not a tiny house or a Japanese tea house. We are a European company run by young people. We want to create a contemporary concept. We want people to enjoy tea. We want people to bring tea to their lifestyle and make it part of their normal lives.
We want to make tea a part of their daily routine.
Paper & Tea Storefronts
P&T Amsterdam, Netherlands
P&T Utrecht, Netherlands
P&T Bonn, Germany
P&T Munich, Germany
Dan: I see your point about bright windows and an inviting storefront. Who is attracted to that? And why do you think they come into the store?
Eduardo: It’s someone who likes pretty things, somebody with a certain level of curiosity; we’re not a place only for tea drinkers. We believe we have the challenge of creating new tea drinkers. We want people to walk into the store, and even if you don’t drink tea, you will start because you feel that the atmosphere is so nice and want to be part of it.
I’ve seen a lot of people who say they don’t drink tea, but they buy a cup of tea, and they go home and say okay, I want to re-live the experience.
I want to do it with my friends because I’m surprised I want to do it with my family. So it’s also like a little chain effect. For every store that has opened, the escalation has been exponential.
Every week, more people come back because they heard about us from a friend or saw on social media that we were close by. It’s a very nice feeling that happens in the stores.
We have to recognize we are in the process of doing this.
People have come to me and said, ‘Paper and Tea is doing pretty well because you’re opening so many stores.’
It’s like, no, no, we’re not doing well. Yet. We have an idea. We have a commitment. We put ourselves to the challenge. And we believe that people have to experience tea. It doesn’t matter how beautiful our website is; you must experience, smell, and taste it. And that’s the reason why we’re opening stores.
We want to be on every corner to have the chance to make you live the experience of drinking or preparing tea or talking to you.
And that’s why we’re opening so many stores in strategic locations.
Dan: Talk a bit about how you operate a store. You must invest in training staff skilled in tea and in helping customers understand how tea works so that they have interesting stories to share when they leave the store.
Eduardo: Exactly, absolutely. Tea is a product that offers the possibility to create this moment and make people leave these unique experiences. But it’s also a very complex product. To make those experiences possible, you need knowledgeable people who understand the product and the nuances.
We have roughly 80 different teas, 60% pure teas, and 40% blends. We have teas from 12 different origins and many different regions within those origins, so there is a certain degree of complexity. We manage it through a lot of training.
We see our stores as more than just a shop where you go in and buy tea; for us, it’s a space where you can have these experiences. We look for people who have worked in hotels and restaurants. Maybe they don’t have selling experience, but we need this blend of people who may be very good at communication and selling. We need people who move very confidently behind the bar because the whole preparation will only impress if it’s done with confidence — and if you know what you’re doing, if you know the steps, and if you do it naturally.
Dan: Will you explain how changes in customer behavior have helped make this concept work?
Eduardo: I’m not German, so I’ve been trying to get to know German consumers. As you say, they have a very specific taste for herbals and fruit blends. Everything that happened with Corona brought a different consideration regarding what I’m drinking, what I’m eating, and what I’m consuming. Consumers ask, Is it healthy? Where’s it coming from? More and more, these kinds of questions are relevant for consumers.
We are listening, observing, and asking, ‘What kind of customer is coming into the store? What questions do they have? It’s super interesting because Paper and Tea, from a year ago, we had only five stores in Germany.
The customers we were targeting then were customers with a big interest in certain teas. They were looking for something specific for something unique.
Our concept has changed and evolved a little bit. And now, because we want to talk to more people, and talk to people who don’t know tea because we want to bring them in here. We currently have stores in Austria, Switzerland, Belgium, and Denmark. Their past dealings with German retailers were influenced by the fact Germany was one of the biggest Darjeeling buyers. They are, and I wouldn’t say they are over that, but now the Germans are also willing to try new varieties along with the Europeans. One of our stores’ most beloved varieties is Japanese green tea. We have a very nice selection of Japanese green teas, including Matcha, which you mentioned is very popular in the stores. Usually, when visiting the store, I get to prepare maybe 10 or 15 matchas, so we put up a big show at the bar. And then we show everybody how to improve it. Actually, the whole matcha market has exploded here for us. I am not a wholesale tea buyer for Paper and Tea anymore, but while I was doing it before expansion a year ago, we would sell out in a quarter of what we planned to buy for the whole year. It was crazy and extremely hard to plan. Germans are still big herbal drinkers, but they are very curious and are willing to explore new things thanks to tourism. I mentioned that Japanese green teas are very popular, but customers are seeking the benefits of drinking something healthy, that’s a big concern. And so that’s also a big priority for us as well. We are not a pharmacy, and we’re not a drugstore, but to be responsible for what we serve, we offer third-party certified teas and carefully explain how the teas are made.
Dan: So, let’s talk about the downsides. There must be additional costs. How do you recover the added expense?
Eduardo: So there is a lot of time invested in training. A lot of resources must be invested for a store to fully run. And be confident that the store can function independently without somebody being there.
Rotation (turnover) is pretty big. So sometimes it happens that you invested in training, and then people don’t stay. It’s part of the business. We know how it is. So we always try to be one step ahead and make the best conditions for workers.
We are basically building the plane while we’re flying, we’re still creating new concepts, and there are still a lot of standards to be established, which can be seen, of course, as a downside. But on the other hand, for somebody who has the energy to create something from scratch, it’s also very, very motivational.
If you visit the “old” new stores, I say that because it’s the first one we started opening a year ago, and you visit a store that opened last week. You notice the difference because, in every store, we were learning. There has been a lot of trial and error. And I think that has given us an extremely good experience. And now we feel like we’re each time we’re closer to how it’s supposed to be, we’re not quite there. We’re excited that we’re not quite there yet because it would get boring.
Dan: Teabag prices can’t cover the cost of the kind of service, the more expensive locations, and the training. Merchandise certainly plays a part. How much do you have to charge to make it work?
Eduardo: I have to admit, I’m not the person who sets the prices. There are a lot of pricing strategies, but as you say, what we charge is not the price of the tea. What we charge covers the whole experience. When you go to a Michelin-star restaurant, it’s not the little piece of avocado you get but the way it’s presented, how it’s served, how it was kept before; it’s the whole experience you’re paying for.
We want to talk to everybody about tea. We want to bring new people into the world of tea. So, within our assortment, we have different lines and categories. There are teas that are, of course, more affordable for beginners. We call these Master Blends. The price of a tin depends on the tea variety, but roughly between 70 and 100 grams cost 15 Euros.
So I don’t know how much that is in dollars.
Dan: It’s pretty much one-to-one right now. (EUR1.00=USD1.09) What’s the price of your most expensive tea?
Grown in Korea’s Hadong Mountains, this black specialty tea relies on a unique double oxidation, rounded off by intensive roasting, for its sweetly smoky umami flavors. The resulting tea’s strong character and special aroma make it particularly suited for fine cuisine. € 59 | $65 for 60 g
Eduardo: I think right now that might be a Korean black tea that we have. And that would be roughly, I would say, a Euro per gram. A tin of 60 grams is roughly 60 euros. And that would be the top.
But we’re working on some other things that might be remarkable.
Paper and Tea’s First Location
Specialty tea elitists founded Paper & Tea (P&T) in 2012. Instead of locating their first storefront along Berlin’s busy Ku’damm (Kurfürstendamm), they chose Bleibtreustrasse in the quiet, affluent Charlottenburg neighborhood. Charlottenburg, established in 1705, was an independent city until 1920 and is known for its elegant, historic architecture and high-end boutiques.
P&T was never “staid” in the British connotation, manifesting in stores like the fabled Fortnum & Mason (founded 1707). Nor did P&T feature the popular apothecary-like retail “walls of tea” consisting of large tins from which tea was weighed and dispensed. The selection of paper products (notebooks, art prints, greeting cards, and pencils) conveyed a premium shopping experience.
P&T’s Berlin staff differentiated the store in a crowded market by brilliantly curating handcrafted teas from distant tea lands. The tea was displayed on shallow trays in small glass boxes, inviting consumers to sniff the aroma and study the dry leaf before sampling.
Reviewer Aarti Mehta-Kroll, in the publication Slow Travel Berlin, wrote in 2013 that the one-year-old P&T was one of Berlin’s “classiest tea houses,” likening the décor to that of a natural history museum.
She wrote that “ethically produced ceramics from Japan and Taiwan” are displayed on brightly lit minimalist shelves.
Notes describe each tea’s origin and unique characteristics. Tea is sold in 9, 20, 45, and 95-gram portions at prices that range from 8 to 60 Euros for 100 grams. “Korean teas are amongst the more expensive ones as they are mainly produced for local markets and are difficult to import,” she writes.
“In addition to the pure teas, one can also find a selection of hand-flavored teas by local suppliers using natural ingredients. A third unique offering is the infusions: lavender, mint, green rooibos, and ginger,” she wrote.
P&T’s catalog presented a winning combination, then and now.
BIZ INSIGHT — There are fine tea shops in every major city in Germany, with 3,804 tea companies in total. Berlin accounts for 8% market share (303 companies). Hamburg follows with 208 companies and a 5% market share. Consumers purchase 12.4% of the country’s tea at local and chain shops, including TeeGschewendner and Tee Ronnefeldt. Food retailers and discount stores hold a 57.5% market share, according to Deutscher Tee & Kräutertee Verband. In contrast, in the US, 80% of tea is purchased at grocery outlets, and only 7% of tea is sold at specialist tea retailers, according to German-based Statista market research. — Dan
Photos courtesy Eduardo Molina and Paper and Tea, Berlin
Share this post Episode 144 | Paper & Tea’s lofty ceilings and large windows have a captivating effect on passersby attracted to their brightly lit interiors, colorful displays, and a wide variety of fine teas to sample. Eduardo Molina, Head of Tea Experience at P&T, explains, “Our main idea, when somebody steps into one of our stores, is for customers to live an experience they will always remember — an experience they will share with others.”
Running a teahouse involves support systems that weren’t there even 10 years ago. Today, systems are better integrated to talk to each other or export reports to use in spreadsheets for analysis. Inventory in the point of sale (POS) system integrating with your online website is super helpful. There were several presentations at the World Tea Conference + Expo recently in Las Vegas, Nevada that brings these aspects together to make for efficient tools in this post-pandemic tea world.
How’s your organizational and financial skills? How about marketing and social media? All of it can seem daunting those first several years, but there are tools and folks who have already walked the multitude of paths in all these areas. For example, some tea business owners are driving growth in the tea industry through intent-based advertising and experiential retail.
Several Expo presentations covered the topic in detail.
“Operating Your Teashop with the Help of Technology”, a presentation given by Alfonso Wright and Jamila Wright of Brooklyn Tea covered many areas for efficiency – human resources management including payroll and scheduling, POS for sales reports and efficiency markers, website sales, inventory integration, delivery app authentication, and staff communication.
Automated inventory systems, some of which are free, some with monthly service fees (with better deals on an annual package) are helpful. We’ll explore the possibilities of full-scale operations, and the alternative piecemeal approach of exporting sales data to spreadsheets and analyzing the details yourself.
Across the board, you can spend hundreds of dollars per month on a system like Homebase that helps with payroll, scheduling and staff communication, with labor cost controls. Systems talk amongst themselves with inventories connecting, in the case for Brooklyn Tea Clover for the POS and Shopify for the website sales, which all provides you peace of mind, and performs details that you no longer need to do manually. The cream of the crop, we’d say, for a growing, profitable business. There’s the monthly fee on these systems, but there’s also the cost of the hardware (ipad, register, cash drawer, card readers) and depending on your budget, going with the full-scale operation out of the starting gates might be more than you need.
The Do-It-Yourself, cheaper alternative for those starting out (and for us even at year 10 during the pandemic) was Square as a POS and as our online webstore, with a percentage per transaction fee, no monthly fee, and we had a ticketing system that worked well enough as long as the Post-it Notes stuck to the tea brewer’s counter. There are systems now that print tickets in the kitchen for orders, making this somewhat easier. We had a spreadsheet that was loosely modified weekly on sales of specific tea inventories that we’d enter manually, and we had staff performing biweekly tea inventories by counting kilos and packets of each of our 100+ teas during slower times on the floor. A lot more involved for sure, but a monthly or bimonthly inventory still is something that needs to happen to help with future ordering of tea and supplies. With Shopventory, inventories are coordinated between your POS and website tool with less need for regular inventory by staff.
Staff communications and scheduling come together in Homebase as it integrates sales data, staffing, payroll, and data from credit cards on whether they are repeat customers and where they are coming from based on their credit card’s zip code. Homebase takes the emotions out of labor tracking and whether someone is clocking in on time or not, and can lead to reports where merit based incentives are determined by those reports. Using Clover for staff to clock in and Homebase to connect with payroll data you’ll get a nice projection of what payroll will be and scheduling suggestions.
We used a simpler, cheaper method with MyTimeStation for staff to clock in with biweekly exportable report on staff hours, exporting to a Google spreadsheet set up with predetermined automatic calculations. The MyTimeStation and Google Spreadsheet makes this a fairly simple process, and MyTimeStation is available as an ipad as well as iphone app that staff running errands can clock-in on remotely, and it’s free for 10 staff or less. Using GroupME for group texting for call-outs and shift swaps, we had a communication tool for immediate action requests.
On-boarding, which Homebase provides as part of their system at their highest monthly rate, includes employment forms and introductory processes and videos. Alfonso mentioned setting up Google Forms for onboarding processes, with integrated videos – a great solution that just takes time to produce, but so easy to update and share with staff through Google Drive.
Once you have those figures from your POS – what’s popular and selling, what has the highest or lowest profit margin – then you can turn to what to market to your customers. “Intent-Based Marketing” a presentation by Mackenzie Bailey of Steeped Content takes the information from our POS reports as top sellers – what customers are buying – and takes the effort behind the daily sales into what our marketing decisions on social media and web advertising should look like, with the data on zip codes from credit card payments showing where customers live allows you to focus your marketing in these areas on Google, Facebook, or your local weekly newspaper. A blog post focused on SEO search results for your site, and the product customers are buying through your POS, creates repeat interest and follow-up purchases.
Free or per-transaction system like Square, Google Workspace and Calendar, and MyTimeStation, are a good place to start, then move to the fee-based systems as budgets allow like Shopify, Clover, Homebase and Shopventory is a sure way grow a business smart and within budget when starting out, or even a few years in.
Ellen Kanner owned and operated a traditional true-to-origin teahouse in Portland, Maine with her husband for 12 years before moving the operation online while continuing to offer their longtime customers loose leaf tea and teaware, their Tea Tasting in a Box®, and tea tasting events and trips, while setting up tea programs at restaurants and cafés. She has traveled to origin for tea to South Korea, Japan, India, Taiwan, Nepal, and Sri Lanka, as well as to Portugal. You can see more at www.dobrateame.com.
Without explanation, Iran’s Ministry of Agriculture has stopped registering contracts with Indian suppliers to export tea, rice, and other commodities. Registration is required before Indian goods can be offloaded in Iran.
Beginning in late November, Indian tea traders and traders exporting basmati rice noticed unusual delays in the routine registration of shipping contracts. Iranian officials did not announce or explain the delays, which led to speculation that the disruption was tied to ongoing street protests, a widening trade imbalance, or possibly ongoing discussions to resume oil exports from Iran to India.
Masih Keshavarz, speaking for Iran’s Rice Suppliers Commission, told IRIB News, “the ban will be lifted as soon as bilateral trade is balanced out or registers growth.”
The Business Standard reported that a fifth of India’s tea exports are shipped to Iran. Indian exporters told the newspaper, “the disruption in trade has been triggered by anti-hijab protests in Iran. Asa result, Iranian buyers, have been defaulting on payment obligations.”
Negotiations between the two countries to resume oil shipments are ongoing. India halted in 2019 due to EU and US economic sanctions designed to convince Iran to cease work on developing a nuclear arsenal.
Anshuman Kanoria, chairman of the Indian Tea Traders Association, said India’s Commerce Ministry, the Tea Board of India, India’s Foreign Trade office, and the Indian Embassy in Tehran are seeking an explanation. He writes that it is “futile to speculate on unconfirmed guesses.”
Previously registered shipments continue to arrive at Iranian ports.
| China Eases COVID Restrictions
China has eased travel restrictions and will permit people to enter public buildings without showing negative test results (except schools, hospitals, and nursing homes). Residents can travel freely within the country, but international travelers must still endure an eight-day quarantine on arrival. The country remains closed to tourists. The immediate impact of lifting restrictions will be a surge in infections due to a low vaccination rate.
| World Bank Report Reveals Investment Opportunities for Expanding India’s Cold Chain
Cold storage capacity in India has grown steadily. Still, a gap of 3.27 million metric tons for long-term storage of fresh produce remains, according to a World Bank report on investment opportunities presented at a government-hosted conference on developing India’s cooling sector.
The integrated development of the cold supply chain across India is severely lacking. The National Centre for Cold Chain Development (NCCD) estimates that close to $11.75 billion is required to develop the physical infrastructure and transport-related elements, presenting an investment opportunity to modernize the retail end of the cold chain requiring $1.3 to $1.9 billion.
Building out that infrastructure will spur the consumption of chilled ready-to-drink tea and make it practical to sell refrigerated concentrates and store perishable green teas.
| PLUS THIRST has completed its initial assessment of human rights in the global tea sector and is now seeking to understand the root causes. THIRST founder and CEO Sabita Banerji says the non-profit will conduct confidential surveys of tea producers during the New Year. In this episode, she discusses the process with South Asia Correspondent Aravinda Anantharaman.
Andrew McNeill, Business Development Director at Seven Cups Fine Chinese Tea, says that stay-at-home tea drinkers exploring specialty teas are eager to share the experience of tea discovery face-to-face. In December, the 20-year-old tea merchant and tea house relocated to a 2200 sq. ft. combination tea shop, tearoom, warehouse, and online fulfillment center.
Caption: Kai Steerman, left, enjoys a tasting led by Zhuping Hodge
Listen to the Interview
Seven Cups Tea House Carefully Crafts a Cultural Experience
Seven Cups Fine Chinese Tea is typical of well-established shops that survived the pandemic. The direct-trade retailer is 20 years old, located in a second-tier city, and generates revenue online and in-store from packaged sales, tea service, and wholesale supply to coffee shops, cafes, hotels, and restaurants.
Packaged tea has fared well since 2019. A spike in sales has jammed tea cupboards with direct-from-origin and exotic teas purchased online. The growing consumer preference for better-tasting tea favors retailers with quality selections, including herbal infusions. Retailers are remodeling to promote in-shop sampling as it encourages social interaction and repeat business among enthusiasts eager to explore new origins and styles as they learn from experts.
Seven Cups founder Austin Hodge says, “The business model of our tea house has always been to provide an authentic and high quality product and customer experience. We see the opportunity to expand our tea house is a validation of this model. We firmly believe that high quality tea isn’t just compelling to a niche market of connoisseurs, it’s readily enjoyed by everyday, working class people.”
“When you enter a traditional teahouse, in China or Tucson, you step into a cultural experience that separates you from your daily problems. It’s a teahouse tradition for tea drinkers to be treated with respect and dignity, whatever their outside problems might be,”says Hodge.
Dan Bolton: Every successful retailer has plans to expand to a new 2200 sq. ft. location. What led Seven Cups to relocate?
Andrew McNeill: So, for us, it was realizing that we were hitting a point where we were at capacity. We realized about five years ago that we had to start making a plan. We were sharing a strip mall with several other popular businesses, and it’s great to have the exposure to being next to other popular businesses. But if people can’t park there, it’s a problem. And being there for 20 years, we realized that if people hadn’t found us yet, in this location, they probably weren’t gonna find us.
We were fortunate in that we had enough of a unique draw in our local area, where people sought us out from far away. We weren’t dependent on foot traffic to drive business and awareness. But that said, after moving to a location with better visibility, we’ve already seen an enormous response.
You can do everything right with your social media, tending to your tribe, and getting the word out in your community; these are all great and worthy things to do. But finding the right location that’s going to be visible and accessible to your customers can’t be substituted.
So, location still does matter.
Dan: Did you decide to buy or lease?
Andrew: We moved from being a renter to a buyer. And, of course, the advantages of being a renter versus an owner will depend on where a business operates. In our case in Tucson, we saw pretty strong advantages to being an owner, especially with rents increasing; given the economic climate in the last three years, it was clear at the time. Things are shifting now, as they always are, but it was time to move in terms of favorable lending conditions and property valuations.
That said, we spent a long time finding this place. It was a unicorn location. We knew we were looking for something unusual. In our case, a big part of what we wanted was to consolidate the wholesale and online fulfillment with the tea house. There are obvious advantages and efficiencies in getting your operation under one roof. The challenge there, of course, is that there are very few tea house-restaurant-retail spaces and slash warehouse-office spaces in one building. You must build to suit, to create something like that.
Ultimately, the property that Austin found was an off-market building, a market space that had been abandoned since the 80s. It was not listed. Our realtor did us a real favor by proposing an offer to the owners.
Starting negotiations that way, we were fortunate to find a space that could be reshaped into exactly what we needed.
Dan: COVID created new consumer behaviors leading shops to adapt. Your business does an amazing job educating customers and introducing them to suppliers and producing regions. Will you talk briefly about how this new shop accommodates online buyers and how you approach teaching with sampling?
Andrew: I think we’re still in the midst of that change. During COVID, we’ve accumulated a lot of stuff. And our consumer experiences have been focused on the home and consumption in the home, the individual, and the family.
And so we’ve gone from buying stuff to buying experiences. When you’re building out a retail space, it’s very important to focus on the experience and the experience of the product. This is something that, for us, historically, has been the case in our tea room, in the decades past, is been only a small part of our business, but it’s been an integral part of our business. Because what it is and what it provides is that experience, it’s a guided experience in an environment conducive to it.
When people experience the possibility of what tea can taste like and what satisfaction it can provide when brewed with intentional and beautiful surroundings, this ultimately drives a whole customer lifecycle that we wouldn’t have otherwise.
Regarding parts of our business, the tearoom is just about 10 or 15% of revenue. So, it’s not a significant part. But the marketing power of providing this experience for folks, that face-to-face interaction with your customer, and the feedback given back to us as a business is invaluable.
We certainly missed that during COVID. And we’ve seen that people coming out of the pandemic haze are interested in having that interaction from the consumer side. So, we’re happy to be in the fortunate position of opening a new Tea House experience when people are just becoming more comfortable coming out and seeking such experiences. Of course, it’s got to be great; it’s got to satisfy those expectations both in terms of the educational experience and the sensory experience.
Dan: Tell us about the tasting experience.
Andrew: Tasting is a central part of the experience; there’s a tearoom, but there are also individual tasting tables. So, these tables are not a place where people would sit down with their own tea, but where they would sit down with the shop owners or some of the staff to have a conversation and chat about tea. And, of course, that conversation is an organic educational experience where people can come up with their own questions. That drives the discussions and the whole experience of tasting this tea and understanding what’s behind it. Of course, it helps us that education flows the other way because we understand how consumers enjoy this tea. We’ve built out places in the new store for people to have those conversations in different parts of the building.
Dan: How many tasting tables are there in the store?
Andrew: So we have three different tea tables. The tea room itself is about 700 square feet, which is about the same as we had in our old space. The added space gives us a little more flexibility on where we placed the retail section of the business. In the old store retail sort of ran through the tea room, so you could be having your tea experience in the tea room and people would be walking in back of you along the walls looking at teapots. Here it’s a little more of a private experience. There’s a clear separation between the retail area, which takes up about 500 sq. ft. and the tea room. And so people feel a little more comfortable with getting up close and personal with teapots and jars of tea, while having conversations with our staff over the retail items.
Simultaneously it makes the tea experience when you’re sitting down all that more special and private and focused.
“People want to have an intentional, amazing, profound experience every time. If you create that brush with the sublime with your products, service, and relationship with your customer, you’re really in tune with what folks want.”
— Andrew McNeill
Dan: Let’s talk about innovations in the back end of the store.
Andrew: Wholesale is not the profit leader of our business. It comes along with online retail, the tea house, part of a broad revenue mix. So, for us, that makes consolidation more important because we’re all serving multiple roles. You can have conversations not only with different people but with different people as they’re serving different roles. It is also very valuable in terms of efficiencies for building out the wholesale part. A free-standing building enabled us to build the ventilation and cooling system to suit tea storage. It’s of utmost importance to take care and preserve the quality of the tea from season to season. We’re a vendor that focuses on one lot per year. We do not blend 2021 tea with teas from 2022. Selling is seasonal, dated by year, so you must ensure the tea is holding up. As tea ages, people are going to know that it’s aging. We make sure that we’re doing our best to preserve its quality. A freestanding building also means there are no intrusions of smells that will contaminate, there’s no flavor creep from, say, other products that are around. It also gives us the advantage in terms of compliance to have one FDA-inspected facility instead of two, same for health department inspections locally. Being able to focus on getting things just right was one of our build-to-suit goals
Dan: Online you offer an interesting version of sampling option.
Andrew: As fresh tea arrives; we offer graded samplers. This is an experiential product. This year we did five different grades of Longjing (Dragon Well) from the same factory. These teas are grown in the same garden, harvested during the same season, and processed by the same tea maker. You can taste the differences from the earliest pluck of their premiere, early spring Ji Pin (ultra grade) Da Fo Longjing (2022), and compare as the season progresses, tasting how the leaf changes and how differences in plucking and processing change as the harvest progresses. You can brew each tea separately for casual drinking or compare different teas side by side to calibrate your taste buds.
Tasting tables in foreground, retail display at right, tea room in rear.
Dan: Younger people coming to tea are seeking distinctive taste. I tell people it’s as simple as this; your grandmother drinks tea — her grandsons and daughters taste tea. She seeks consistency in a brand that spans 50 years of her life. Her grandchildren are looking for something novel, identifying flavor notes and asking, where was it grown? How was this tea made? Why does it taste this way?
Andrew: Yeah, they are looking for an experience every time. I think that’s an excellent way of putting it and describing the generational shift. Many younger consumers are not drinking a whole lot of tea. We have a subscription service, and people said, “this is great, my only complaint is I’m getting too much tea.’
People want to have an intentional, amazing, profound experience every time. If you create that brush with the sublime with your products, service, and relationship with your customer, then you’re really in tune with what folks want.
There’s a sophistication with the consumer now since people can learn so much so fast about the supply chain. They will ask those questions to satisfy their own moral, philosophical demands for an ethically managed supply chain, but also to satisfy the sort of epicurean desires of being able to taste the terroir, the provenance of this product.
With people coming in who have a high degree of knowledge, what they’re looking for is not only answers to those questions but a conversation around those questions. So it’s not just being able to provide that information but being able to have a conversation around that information.
Because people are used to having this conversation, say on social media and over long distances over the internet, and getting this information directly from growers when they come into their local tea shop, they want to be able to continue sharing their own preferences and learn more about your own sourcing approach and just delighting in a conversation about something that both of you love.
Discover the wonders of Chinese tea as you taste a selection of high-quality teas featuring different origins and processing methods. Learn about different types of tea and their traditional health benefits. Great for parties and special events (baby showers, client/employee events, birthday parties, graduation parties, cultural experience days, etc.). Light snacks will be served with tea (1 snack per person included in the price).
Cost: $18 per seat (minimum 6 seats, maximum 30 seats per event, no child pricing), 18% minimum gratuity not included Length: up to 90 minutes.