Schumpeter | The tea business

Elixir for the mindful

Is tea the new coffee for Americans?

By E.W. | WASHINGTON, DC

A STAND at the entrance of a Teavana tea store heralds the arrival of Monkey Picked Oolong Tea. “According to legend, Buddhist monks trained monkeys to harvest the youngest leaves from the tops of wild tea trees,” the placard explains. Behind the checkout counter, the line-up of tins on Teavana’s “Wall of Tea” (pictured) reads like a hymn to exoticism: Maharaja Chai, Imperial Acai Blueberry, Sweet Asian Pear, Zingiber Ginger Coconut Rooibos. In recent years the specialty tea industry in North America has exploded. DavidsTea, a Canadian retailer founded in 2008, now has 130 stores across North America. Earlier this year Capital Teas, a regional chain based in Annapolis, Maryland, received a $5m investment to double the number of its store locations. And Starbucks, which acquired Teavana in 2012 for $620m, operates 366 Teavana outlets and plans to open 1,000 more within the next five years.

America and its northern neighbour now boast levels of tea consumption usually associated with the tea-drinking cultures of Britain, China, and India. According to Packaged Facts, a consumer-goods research firm, tea sales have risen by 32% since 2007. Tazo, also owned by Starbucks, remains the largest specialty tea brand in America, but other big chains—not to mention countless independent tea boutiques, lounges and startups—are also capitalising on tea’s new-found popularity. World Tea News forecasts the emergence of 8,000 tea-specific retail outlets in America by 2018 (in 2003 there were only 1,000). George Jage, founder of World Tea Expo, which held its 12th annual trade show in May, expects tea sales in America to surpass those of coffee by 2017.

Much of the growth in sales is expected to come from coffee retailers that are willing to expand their offerings to meet changing consumer demands. Tea is conspicuously marketed as the healthier alternative to coffee. Laden with antioxidants and containing 80% less caffeine, it promises to reduce the risk of heart disease, stroke, neurological decline—and even certain cancers. Some blends are used treat insomnia. Others, like Capital Teas’ Slimming Oolong Organic Tea and Detox Tea, are said to improve metabolism to “cleanse body and mind”.

The growth of the specialty tea industry goes hand-in-hand with the emergence of a class of consumers who are health conscious and interested in Eastern culture. Until 2013 Tazo’s tea boxes were labeled “Blessed by a certified tea shaman” and they continue to use new-age-style product labeling. Meanwhile, Teavana insists on balance, the importance of “a life well lived,” and the need to “step back from the frantic pace of the modern world.” Tea-drinking draws on a discourse of purification and renewal that complements popular spiritual practices like yoga and meditation. The Tea Gallerie in San Diego holds “Reiki-energy” healing workshops and regularly transforms its tea lounge into a yoga studio.

This is not to say that tea culture is somehow anti-modern. In fact, a new industry of hi-tech tea-brewing machines has sprung up to accommodate tea’s growing popularity. But tea drinking represents a different approach: if coffee is the elixir of efficiency and overstimulation, tea energises by pressing the pause button. It encourages reflection and reprieve. Partnering with Teavana, Oprah invites you to “Steep Your Soul.” There is an intimation of luxury well deserved—but a luxury that almost everyone can afford.

At the same time, brands are encouraging consumers to become connoisseurs of fine teas, just as they are of fine wines or coffees. Specialty teas are marketed as complex beverages steeped in history and ritual. Tea bars and restaurants offer tea ceremonies. Retailers sell accessories such as bamboo tea tools, cast-iron teapots, and tea-making sets that adhere to 12th-century Japanese tea-making practices. High-end teas like the Super Butterfly Wuyi Oolong sell out, even at a price of $220 for eight ounces (227 grammes). There is a pervasive belief that tea requires understanding and appreciation. Capital Teas proclaims its mission to “educate people… one cup at a time,” and Teavana offers books like “Culinary Teas” and “The Way of the Buddha.” Tea isn’t just a drink, in other words; it is an experience—one well suited to the modern culture of customisation. A manager at DavidsTea says that the retailer aspires to being far more than the Starbucks of tea. “I’ll give people a cup of tea and make their day.”

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