What Does the Closing of Teavana Shops Mean for Loose Leaf Tea in the US?
Wednesday, October 04, 2017 By Elliot Raynsford
Loose leaf teas and tea blends are less processed than those in teabags. Cutting any plant material hastens its degradation – as seen with the browning of a sliced apple – so the ingredients are more intact. That means they retain subtle flavor nuances such as fruity, spicy, earthy, or grassy. And that results in a more unique taste profile for that particular tea.
On hearing of the closing of all Teavana stores, one might think that it reflects the lack of interest in premium, loose leaf teas in the United States. A closer look, however, proves otherwise.
Take a look at Starbucks. While Teavana stores are closing, Starbucks’ in-store tea sales have increased 40% over the time that they have owned Teavana. The coffee giant is projecting $1.6 billion in global Teavana sales over the year to come, and they are looking to expand the sector.
Or walk the aisles at upscale grocery stores, where loose leaf teas now command significant shelf space. Even more traditional grocery stores now have a dedicated area for loose leaf tea. Some retail grocery stores, such as Safeway, even have a selection of loose leaf teas in bulk bins.
Wholesale purveyors of loose leaf teas have seen double digit growth in this category for the last few years, and the growth continues. So no, loose leaf tea is not going away.
What didn’t work for Teavana stores? Three things: malls, price point, and artificial ingredients.
1. Malls. We know that mall traffic is considerably down, and it’s simply not the first choice for Millennial shoppers. Teavana is not alone in its decision: retailers such as Sears and Gap are closing many of their mall stores. The ease and choice available to online shoppers has moved billions of dollars of sales away from brick and mortar stores.
2. Price Point. Due to its high price point, Teavana purchases are often either a gift or a rare indulgence. Hot gifting trends change over time, with the focus shifting to something new and different. And a rare indulgence tea purchase is unlikely to sustain a store.
3. Artificial Ingredients. Millennials prefer foods and beverages made with natural ingredients – and Teavana relied on artificial flavors to create many of their tasty brews. In the long run, that did not wear well with many of their loose leaf tea drinkers.
Why did I mention Millennials in that last point? Because Teavana’s fans are largely Millennial. These discerning buyers desire key elements that loose leaf tea has to offer: high quality, healthy experience, and a strong variety from which to choose. That made Teavana a great gift idea – but the lofty price puts it out of range for everyday enjoyment.
Looking forward, what are we likely to see? Brands with high quality, all natural, loose leaf teas at a price point that allows for regular consumption will win the hearts of Millennial tea drinkers. That is exactly why one of America’s original herbal tea brands, Good Earth Tea, recently launched an extensive line of artisanal loose leaf teas – available online, so that tea drinkers can shop whenever the inspiration strikes. Best known for its Sweet & Spicy tea that has been one of the most popular herbal teas in the US since the 1990s, Good Earth’s premium loose leaf teas were created to satisfy a new generation’s taste for tea – at a reasonable price point. In short, the future of loose leaf tea is bright! Those who have gotten a taste of the difference that high quality loose leaf tea offers are unlikely to turn back. And more tea drinkers are going to discover the experience. The closing of Teavana stores doesn’t signal the end of loose leaf tea; it’s a signal to tea brands that we need to provide excellent teas that can be purchased online – at a price that allows for daily enjoyment.
about the author
Elliot Raynsford, Master Blender, Good Earth Tea
Elliot Raynsford is the Master Blender at Good Earth Tea, where he is known as the “Willy Wonka” of tea. With a degree in Physiology-Anatomy from UC Berkeley, Raynsford spearheaded the creation of “Sweet & Spicy” Tea, the tea that launched Good Earth as one of the original American herbal tea brands in the early 90s. Since then, he has worked with Good Earth to develop a wide range of tea blends, including the newly launched Good Earth premium line of loose leaf teas made from the world’s finest leaves, buds, and ingredients.