Holiday season and tea retail - Cynthia Fazekas

Cynthia Fazekas, Adagio's US Sales Manager, shares her thoughts on retail and consumer trends for the holiday season and gives some tips to stay ahead of the game in the tea business.

The current year is drawing to a close with the crucial Christmas season upon us. What are some of the trends you have witnessed this year what impact will these may have for the trade in the future?

Emphasis seems to be on quality but affordable teas, and practically reigns supreme in tea wares. Tea shoppers are buying by price point and are seeking less exotics, more tried and true favorites preferable in smartly priced gift sets. They seem to want good looking items, not too expensive and certainly not frivolous.

Gourmet items that the gift receiver might not otherwise splurge on for themselves are trending. Plus the "good health" aspect of tea shows care and concern.

With the US being in the midst of a severe economic crisis this year, how has the broader economic environment affected the tea industry and, more specifically, the retailers that you deal with on a daily basis?

In the current economic environment, we are seeing that retailers are carrying less stock initially, preferring to order more frequently than to risk sitting on product should the season fall flat. We will likely see more "emergency" and last minute orders.

Also, we've seen promos starting earlier than in previous years, as retailers expect consumers to more carefully ration their holiday budgets and want to capture the potential sale as early as possible.

As shoppers opt for more affordable and pragmatic choices, what are some of the traditional products that tend to do well now and might there be any exotic items that may have been overlooked? And given the current context of "smart" shopping, what are some of practical tips you would give to retailers in terms of tea selection and presentation?

Comfort teas such as English and Irish Breakfast blends and dessert-like flavored teas do well, especially paired with modestly price tea gadgets or brew ware.

Smaller amounts of exotic teas could have more impact, especially novelties like hand tied blooming teas that can be sold "by-the-bloom." A small pack of a single estate high elevation variety is also an option, as something unique and intriguing is sure to attract connoisseur customer attention.

As you note, retailers are more carefully apportioning their stock levels. What are some of the pitfalls to avoid in this approach and how should one ideally manage the process?

Pitfalls to avoid are underestimating customer turnout and product needs. This could result in lost opportunities, as once the customer leaves because you did not have a product they wanted, the odds of them returning when the item is back in stock decrease dramatically.

More frequent orders of small shipment could lead to additional shipping/handling charges that eat a bit more of the bottom line. Overstock issues can easily be handled by January sales events. Plus tea still mostly is a cool weather beverage and sells well all winter!

Economic worries will continue impacting sales for some time and businesses are still adjusting to the current situation as we head into 2010. Which business models and practices may find it the most difficult to survive in this environment and which ones have the ability to counter the trend?

Those that emphasize value and service will likely survive and perhaps even excel. Businesses that have not learned to trim their excess or have taken on too much debt will likely fall victim to the economic trend.

The online platform has a bright future in my opinion. People feel increasingly comfortable shopping online and appreciate the convenience associated with ordering from home or office. Smart and relevant use of vast possibilities that the web offers remains a challenge for many businesses.

Looking at the broader tea industry in the years ahead, what will be the (new) market drivers that will lift the sector and expand its reach once the economic situation improves?

My belief is that market drivers will be those that place the emphasis on the customer, their needs and individuality, while still exposing a jaded consumer to the new, exciting and exotic - all while remaining practical!

In terms of categories, it will be intriguing to see the RTD sector develop, as many multinational companies have taken a keen interest in it and are providing funding and distribution opportunities. It remains to be seen how convenience will shape product quality and taste.

Cynthia has an extensive experience in the US gourmet tea industry, consulting businesses large and small on all issues relating to tea for many years. She is currently managing Adagio's US sales. Her day always starts with a cup of Golden Yunnan tea.