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Starbucks opens its first tea bar as it bets on a $90bn global market

Americans love their coffee. A decent cup of tea, however, has been harder to find, though that is about to change. Starbucks has just opened its first Teavana tea bar in New York City, and in the next five years aims to do for tea what it has done for coffee. Who wouldn’t want a cut of a $90bn global market?

HOWARD SCHULTZ, the billionaire behind Starbucks, is watching his caffeine intake, and won’t drink coffee after 5pm. He’s more of a tea man these days, having taken a liking to the Maharaja Chai Oolong blend sold at Teavana, the mainly mall-based tea retailer Starbucks bought for $620-million last November.

Last week Schultz sipped a $4.95 cup of his new favourite at the first ever Teavana tea bar in New York City. Next up: a Seattle outpost, opening just before Thanksgiving.

Schultz says to expect 1,000 such tea bars — complete with zen decor, grey walls and dim lighting — in the next five years as Teavana aims to do for tea what its parent company has done for coffee.

The location of the first Teavana Fine Teas + Tea Bar couldn’t be more perfect: on Manhattan’s super-wealthy Upper East Side at 85th St and Madison Ave, steps from a branch of cult yoga outfitters, Lululemon (“you’ve got to give us some credit,” Schultz said laughingly of the canny real estate grab) and blocks from Central Park.

“Tea has been a part of Starbucks heritage since 1971,” says Schultz, claiming the new offering “elevates the tea experience in the same way we’ve done for coffee.”

Starbucks will slowly add tea bars to its 300 or so existing Teavana stores, which until now sold loose-leaf tea (two ounces of the Silver Needle blend goes for $17.98, for instance) plus gifts and accessories like ceramic teapots and stainless steel infusers. As well as drinks like Matcha Lattes, the new tea bars will sell food to appeal to a health-conscious customer (an egg-white frittata is $5.95).

Schultz is angling for a piece of a hot and iced tea market worth $90 billion worldwide, according to recent Euromonitor data, with Starbucks-saturated countries like Japan, China, Canada and the UK leading the trend. Globally, tea is the second-most consumed beverage besides water. While Americans still consume coffee at a far greater rate than tea, their taste for leaves versus beans is growing.

Data from the Tea Association USA says America’s interest in tea has grown by 16% over the past five years.

Starbucks, which dropped the word “coffee” from its logo more than two years ago, has been expanding beyond java, buying juice brand Evolution Fresh in 2011 and pastry company Bay Bread last year.

Schultz isn’t concerned about cannibalising his current business, however, noting that caffeine junkies who jones for a Starbucks to start their day are unlikely to be big tea drinkers. To that end, there’s no Starbucks branding in this first Teavana bar, nor will there be. There’s no coffee on offer, and the drinks are sold as either 12- or 16-ounce servings rather than “tall” or “grande”…..

Forbes: Read the full article

A nation rediscovers its old drinking habits

AS ANY foreigner can tell you, Americans love their coffee. It is a watered-down percolation compared with the eye-twitchingly strong varieties sold in little thimbles in many European cafés, but it is coffee nonetheless. A decent cup of tea, however, has been harder to find, though that is about to change.

With a shop on what seems like every urban corner, Starbucks is such a fixture in American life that you gauge a neighbourhood by how near you are to one of its coffee houses. Yet when it first started operating in 1971 it was known as “Starbucks Coffee, Tea and Spice”. In those very early days, 27 different kinds of loose-leaf teas were scooped from its store at Pike Place Market in Seattle. As it expanded it focused on coffee, retaining only a small offering of tea behind its counters.

Times were tough for tea aficionados parching for their favourite cuppa during the coffee boom, until 1997, when Teavana opened its first premises in Atlanta. It quickly grew, eventually selling a wide range of fine teas and tea paraphernalia in its 300 locations, though it mostly sells loose-leaf tea (you can also get a brew if you are prepared to wait).

Then in 2003 Argo Tea was founded in an up-market neighbourhood in Chicago and is to tea what Starbucks is to coffee. Dotted around the country its stores are temples for tea drinkers, even carrying tea-flavoured food…..

The Economist: Read the full article

Starbucks starts throwing a very big tea party

The company that helped create a coffee-drinking, caffeine-fueled culture across the US, launching thousands of stores and almost as many jokes, now hopes to open 1,000 tea bars over the next five years. The first one, on New York’s tony Upper East Side, opened on Thursday. It’s called Teavana Fine Teas + Tea Bar.

Starbucks’s Madison Avenue tea store offers 100 flavours, all proprietary to Teavana, including Strawberry Lemonade, Cococaramel Sea Salt, Yunnan Golden Pu-Erh, Spice of Life, and Slimful Chocolate Decadence Oolong.

The drinks menu is small—featuring specialty teas and tea lattes, iced teas, and what’s called craft tea infusions—so the uninitiated customer doesn’t get overwhelmed. Six tea flavors are featured, along with some samples. “Americans do everything to excess,” said a bewildered Australian tourist who had wandered into the store.

The Teavana bar offers food, too, but not like the fare Starbucks offers. It’s better. It’s also lighter, so as to not overwhelm the subtle tea flavours. And it’s more expensive: A mushroom and kale flatbread goes for $8.95; lemongrass ginger chicken rice balls cost $7.95. There’s also fresh salads, macaroons, and poached pear and blue cheese triangles.

Behind the counter, a tea brewing machine specially designed for Starbucks by a company called BKON, uses a process called reverse atmospheric infusion to quickly extract flavour from tea leaves. (Quickly, in this case, means about 90 seconds.)

More delicate teas are brewed the old-fashioned way, which can take up to five minutes. Starbucks’ new soda machine, the Fizzio, is behind the counter, too, for turning out sparkling teas. Some drinks include juice from one of Starbucks’s other acquisitions, Evolution Fresh. And customers can choose among various kinds of milk, as well as the amount of sweetener. (This is Teavana’s own brand, called PerfectTea Sugar)…..

Bloomberg BusinessWeek: Read the full article