Ready-to-drink rooibos tea manufacturer Rooibee Red Tea announced a major branding revamp that includes a redesigned website, reworked packaging and a tweaked logo. The packaging design and website have adopted minimalist cues with a white background and colorful images of fruits taking center stage. The company also switched from a 12oz to 16oz bottle, bringing the design and bottle shape surprisingly close to those used by competitors Honest Tea and VitaminWater. Rooibee is seeking to realign the brand after a transitional period that saw the departure of longtime CEO Heather Howell and a short-lived stint by Bryon Evans. Accompanying the announcement, new CEO David Salmon shared plans for an aggressive national expansion in the premium grocery and convenience channels.
Starbucks announced a major pivot towards Asia by introducing Teavana tea beverages in 6,200 stores across the Asia-Pacific region. The coffee behemoth hopes this will lift global tea sales to $3 billion over the next five years despite having to challenge an entrenched tea culture in many of those countries, including China, India and Japan. A number of tea drinks were created especially for the Asian market, including black tea with ruby grapefruit and honey and iced shaken green tea with aloe, as well as matcha-based beverages. A range of 9 tea varieties in pyramid bags will complement the drinks line. Teavana teas aim to offer a modern tea experience and target Asia's growing middle class of younger, urban consumers open to new flavors and premium products.
Workers at Lipton's Virginia facility, which produces all the tea bags sold in North America, decided to unionize due to declining working conditions. According to data from the United Food and Commercial Workers International Union, about 200 workers participated in the vote to unionize, with 108 votes for and 79 against, well over the half-plus-one needed. Workers reportedly complained about shifts that lasted up to 12 hours a day for up to 13 days straight without a day off. Employees also highlighted declining benefits over the course of the last 10 years. Unilever, the parent company of Lipton Tea, announced a major $96 million expansion of the site three years ago with an expectation to double the staff.
Adagio Teas, a New Jersey-based gourmet tea supplier, has tapped into a local financing program to fund the expansion of operational capacity. The company secured a loan to purchase state-of-the-art blending equipment that allows to blend leaves, herbs and flavorings in large quantities. The funds were also used to create operational efficiencies at its 40,000-square-foot facility in Elmwood Park, NJ and increase workforce by a fifth in the past couple of years. Adagio Teas was founded 17 years ago in a basement flat and now boasts retail and wholesale operations in the US, Europe and South America with a portfolio of over 200 artisan teas sourced directly from origin. New Jersey's Small Business Fund offers creditworthy small, minority-owned or women-owned businesses assistance of up to $500,000, including an expedited approval process and fixed interest rates.
The share price of Hain Celestial, the parent company of Celestial Seasonings tea, has dropped precipitously in recent days due to a delay in publishing quarterly and annual results. The move was caused by information that some of its US distributors may have received concessions, triggering an accounting review. The company wants to check whether revenue associated with these concessions is accounted correctly. This sent the share price crashing by about 30% and has wiped out about $2 billion in market capitalization. Hain Celestial claims the issue will not affect the overall revenue for the year, which, having risen by 25% to $2.7 billion in 2015, is expected to rise by 10% this year.
Steaz, a manufacturer of green tea-based iced teas, has been acquired by an unidentified privately-held strategic buyer. The company, predominantly owned by an investment arm of Swiss food giant Nestlé, has been on sale for almost a year. While the financial details of the deal were not disclosed, the minimum bid was reportedly set at $30 million. According to the sales pitch, Steaz was expected to generate more than $17 million in annual sales in 2015 and increase its revenue by a compounded annual growth rate of 47% from 2013 to 2019 by expanding into new channels and launching new products. Nestlé purchased a nearly 75% stake in Steaz for $11 million in 2008 via Inventages Wealth Management.
Starbucks faces a declining tea market and increased scrutiny from health conscious consumers and regulators as it aims to bring a young and modern vision of tea to the UK. Especially black tea, the bedrock of the famous British tea time, has been in steady decline amid growing competition from other drinks and a stuffy image. This has dragged the entire tea category down 6% in value and 22% in volume over the past five years. With the introduction of a range of iced teas across Starbucks locations this summer, the company also faces more scrutiny from consumers moving away from sugary beverages and a government looking to introduce a sugar tax in 2018 to reduce obesity rates. However, green, herbal and specialty teas, all growing in popularity, may offer Teavana the required platform to disrupt an industry long dominated by traditional black tea. The company plans to introduce Teavana hot teas in the UK market this fall.
Tea production heavyweight Goodricke Group is in the process of acquiring two tea plantations in upper Assam to increase output in the region. The deal represents about 2 million kilograms of tea per year for a purchase price of approximately $15 million. Goodricke has been considering acquisitions in Assam for some time now in order to diversify production and because the region benefits from better price realization than others. The company oversees 17 gardens in India, with the majority located in the Dooars region, and several in Darjeeling, including Thurbo, Castleton and Margaret's Hope estates. Last year, Goodricke produced 22,000 tons of tea and expects to reach 25,000 tons this year, thanks to a combination of new plantations and organic growth.
Menno Tea, a bottled tea manufacturer, recently opened a farming cafe in Pennsylvania aimed at showcasing new mint drinks and mint farming practices. Menno Tea Mint Farming Cafe is inspired by mint-infused tea beverages that got the company off the ground in 2011 and that can now be found in over 600 locations across the east coast. The farming cafe is intended to be a consumer testing ground for various minty drinks before they hit production, including mint lattes and cold-brew mint tea. Outside the venue, six varieties of organic mint are grown on a two-acre plot that displays how the herbs taste and smell, and how they are cultivated. This initiative also hopes to encourage local farmers to take on mint production by providing root stock and starter packs, and to create partnerships between local growers in the future.
Teaspressa, a startup manufacturing ground teas, has revealed skyrocketing demand following its appearance on the TV show Shark Tank. Despite not clinching an investment on the show, the company's online sales rose 20 times and helped to get the company off the ground. Teaspressa offers ground tea blends that produce a concentrated drink akin to espresso coffee. The ground leaves can be used just like ground coffee with most coffee machines and can be enjoyed with a range of additions to create lattes and macchiatos. The company is planning to open a storefront next month and to ramp up wholesale production shortly thereafter.
Chinese confectionary manufacturer Zhaolong Foods has secured a patent to manufacture chewing gum enriched with antioxidants found in tea and has set its sights on the US market. The novel product, developed in partnership with Anhui Agricultural University, is based on microencapsulation technology to store natural tea polyphenols in thin coatings inside the gum and release them once chewed. The creators hope that the new product may be a way to introduce tea to other countries, specifically the US, where they plan to pitch the gum to Whole Foods and Teavana. The product is expected to hit specialty store shelves in October across China.
Steep Echo is pioneering a new type of tea experience with a range of herbal teas made with dried leaves from the olive tree. The new tea company, backed by Bel Lavoro olive plantation in Santa Barbaba, CA, starts out with 5 blends that aim to encourage the discovery of this new infusion thanks to familiar inclusions such as peppermint, vanilla, cinnamon, liquorice and many others. While it is a relatively new herb with limited long-term scientific studies about it, the leaves contain oleuropein, which is associated with a range of health benefits, including support for the cardiovascular and immune systems. Olive leaves produce a light cup when steeped for a short time and a heartier one if left for longer. The teas come in 12 pyramid teabags per box and an eco-friendly refill pack is also available.
Following a revised schedule from a brokerage firm and an amended filing from the company, the timing for the initial public offering of Long Island Iced Tea shares looks uncertain. The company was seeking to raise up to $10 million on the Nasdaq Capital Market despite recently posting dismal first quarter results, with a net loss of $1.4 million on net sales of $0.5 million. Renaissance Capital, a brokerage that tracks initial and other public offerings, pulled the offering from its weekly calendar on Monday afternoon, while Long Island Iced Tea filed an amended government document that removed one of the underwriters of the deal. The company's stock dropped 1.6% to close at $7.33 in over-the-counter trading on Monday, but has recovered since.
Canadian specialty tea retailer Davids Tea reported a healthy jump in revenue and earnings when announcing the first quarterly results of 2016. During the period, sales were up by 24.3% overall and comparable store sales, excluding new store openings, increased by 4.9%. Net income was C$1.5 million compared a loss of C$93.2 million in same quarter last year, which was associated with IPO costs. The company added 5 new stores this past quarter and expects to open 11 more in the next three months and about 20 in the two subsequent quarters. Davids Tea expects annual sales to reach C$215-220 million in fiscal 2016 with net income just below C$15 million.
Bell Publishing, a UK-based publishing house, announced the acquisition of Tea & Coffee Trade Journal from Lockwood Publications. The deal involves not only the trade magazine, but also other assets belonging to the company, including UKERS' Tea & Coffee Global Directory & Buyers' Guide and the annual trade exhibition Tea & Coffee World Cup, which was last held this May in Krakow, Poland. The purchase seems like a good fit with Bell's other publications in the confectionary, dairy, food and packaging sectors, as well as expertise with trade shows. Lockwood Publications will retain ownership of its tobacco-related titles and trade show. The financial details of the deal were not disclosed.
Tregothnan, England's first tea plantation, reported biggest yield ever due to unusually warm weather this past winter. December 2015 was the warmest on record and exceeded seasonal averages by several degrees. The tea bushes also benefited from a constantly humid climate and lack of frost, resulting in record crop. According to the estate, plucking could have started as early as January, as opposed to April. Tregothnan, located in Cornwall, was the first estate to grow ornamental tea plants outdoors 200 years ago and became the first commercial tea plantation in England in 2005. The estate owners claim the region benefits from a similar micro climate to the foothills of the Himalayas.
Unilever has earmarked $50 million to set up a tea processing facility and develop two tea estates in Rwanda. Acting via its Rwandan subsidiary, the owner of the Lipton tea brand plans to develop 4,000 acres of tea plantations and to create 2,000 local jobs, including support for small-scale producers. Once in operation, the facility is expected to produce 6,000 tons of tea annually. Last year, the African country produced 25,700 tons of tea with estimated earnings of $72 million. Besides coffee, tea remains one of Rwanda's main agricultural exports.
In lieu of the usual tea room concept, JoJo Tea, a boutique specialty tea company, is opening a tea tasting room to offer a complete tea service experience. JoJo Tasting Room will advocate a more in-depth approach to tea and tea preparation in a serene setting. The eight-seat venue, located in Miami, will have a rotation of six seatings per evening, each limited to 45 minutes. There will be a choice of different tastings, including introductory and Chinese gong fu tea ceremony, with prices starting at $20 per person. Specialty teas and accessories will be available for purchase on site.
Unilever's purchase of the Australian specialty tea chain T2 turned out to cost less than expected to due lower performance-based payouts to previous owners. According to the company, T2's recent performance reversed certain contingent considerations due to co-founders Maryanne Shearer and Bruce Crome, who sold the business in September 2013. Unilever paid $58.6 million cash upfront and another $3.4 million the following year, while contingent considerations were valued at $31.8 million, although it did not reveal how much it had saved. The company has been on a massive international expansion push ever since, opening several stores in the UK and the US, and planning hundreds more in the years ahead.
Stash Tea has begun legal proceedings against cannabis vendor Stash Cannabis for "concerted and systemic infringement of trademarks" owned by the company. Previously, Stash Tea sent multiple letters to the dispensary seeking to stop the use of the name arguing that its trademark extends to the sale of dried plants and tea. The lawsuit claims Stash Cannabis damages and dilutes the brand by misappropriating and using the likenesses of Stash Tea's trademarks in connection with the sale of marijuana and related products. Stash Tea is seeking an injunction, as well as compensation for legal costs and damages, including Stash Cannabis' profits, that may amount to $3,000 - $4,000 per day.
Davids Tea, the Canadian specialty tea chain, is facing questions about its labor practices in the US over the alleged use of on-call shifts. The company was officially contacted by New York Attorney General to explain the use of a scheduling practice that requires employees to call before a shift to find out whether they are required to work. These on-call shifts are often seen as unfair to employees, since they make it difficult for them to arrange reliable childcare or other pursuits while adding to stress and strain on family life. Eight other US jurisdictions are also seeking clarification from the Canadian company that has so far not responded to requests for comment. On a recent investor call Davids Tea executives acknowledged working to offset wage pressures in the US and Canada. The stock price is down about 10% since the news broke.
Long Island Iced Tea Corp., a manufacturer of ready-to-drink iced teas, submitted a registration for a proposed public offering of common stock. The company is looking to raise $11.5 million on the Nasdaq Capital Market, which caters to small capitalization companies. Its stock is currently traded over the counter under the symbol LTEA and fell by more than 10% following the announcement. The company currently employs about 20 employees and operates out of a 5,000-square-foot facility in Long Island, NY. Long Island Iced Tea reported sales of $1.9 million with an 8.8 percent increase over the prior year. It plans to use proceeds from the stock offering for general corporate purposes.
Starbucks is planning a major marketing push to accompany the introduction of its Teavana brand in Starbucks locations across the UK. First product to launch will be the Shaken Iced Tea, a range of fruit flavored beverages infused with black, green and herbal teas. The campaign will focus on the bright, playful character of the iced teas and will mainly target young consumers via a multitude of channels, including in-store sampling and promotions, as well as out-of-home and online activity. Starbucks expects to introduce Teavana's hot tea and tea lattes categories in its locations later this year.
French specialty tea retailer Le Palais des Thés is shutting down both of its Manhattan locations, highlighting the challenges of operating a profitable tea store in New York City. The company, which oversees over 40 locations worldwide, cites different consumption habits this side of the Atlantic, where shoppers prefer specialty supermarkets and are less inclined to shop around store to store. Instead, the company announced plans to focus on getting on the shelves of specialty retailers like Le District and Dean & DeLuca. The French chain also aims to gain a larger presence in restaurants and online thanks to dishes that integrate tea and other product innovations. Le Palais des Thés has 27 shops in France and another 10 planned to open this year. It also boasts 15 international locations in Europe and Japan, with about a third of all shops operated by franchisees. Annual sales reached €25 million in 2015.
David Segal, the co-founder and namesake of David's Tea, resigned from his role as brand ambassador of the Canadian specialty tea chain. According to a filing with the US Securities and Exchange Commission, Segal left the company last week to pursue other entrepreneurial interests despite remaining the third-largest shareholder in the company, with nearly 10 percent of the outstanding shares. Having co-founded David's Tea in 2008, Segal spearheaded the brand's store and packaging design, as well as product development, before taking part in the company's IPO last year. David's Tea currently operates 156 stores in Canada and 37 in the US, with another 39 locations planned across the two countries this year. The company anticipates sales in the $175 - $177 million range for fiscal 2015.
ChugaChaga, a startup from Albany, NY, successfully completed a Kickstarter campaign in a bid to raise awareness about their project of making iced tea from a fungus. The company raised well over the goal of $15,000 in a campaign that was aimed at gauging the public's interest for a tea made with chaga, a fungus that grows on birch trees and has multiple health benefits, including antioxidants and prebiotics. The total cost of launching the brand will be close to $500,000, with funding coming from various sources, including venture capital. ChugaChaga plans to offer three versions of the drink: classic, peach and sugar-free. The drinks are expected to hit store shelves in March for $5 per bottle.
Ron Rubin, executive chairman of The Republic of Tea, is more concerned about positioning the company for the decades ahead than offloading it for a profit. Despite an estimated valuation as high as $125 million and sustained interest from private equity firms and investment banks, Rubin remains committed to keeping the company independent and "a generational business" with plans to hand over the control of the operations to his son Todd. Rubin is also seeking to keep the company debt-free with all growth taking place organically and to focus on the US market in spite of numerous possibilities to expand abroad. The Republic of Tea reported annual sales of $25 million and over 10,000 trade clients.
The Dutch food group Wessanen announced a deal to acquire Piramide Thee, a local tea company, in a bid to expand its portfolio of organic beverage brands. Piramide is a well established brand in the Netherlands and one of the leaders in the health food stores channel. The company offers a wide variety of organic teas, including ranges of functional, children's and everyday teas. According to Wessanen, the purchase of Piramide will complement its existing portfolio of teas that includes brands such as Zonnatura, Clipper, Alter Eco, Bonneterre and Bjorg. Wessanen mainly operates in France, Germany, the Benelux and the UK and reported sales of over €433 million in 2014.
A consumer documentary in the UK suggests that some of the most beloved artisan brands may not be as small-scale as they appear and may actually be backed by large corporations. Teapigs is one of the brands at the center of the report that has been revealed to be an offshoot of the international conglomerate Tata, which owns the supermarket tea brand Tetley. The documentary warns shoppers that some companies use various marketing tactics to portray themselves as local and small-scale. In Teapigs' case, journalists noted rustic-looking packaging and a website that "flaunts their little guy status" despite being funded by one of the biggest tea companies from the very start.
Teabox, the Indian specialty tea retailer, has secured angel investment funding from Ratan Tata, the former CEO of Tata Group. Ratan Tata, who oversaw the acquisition of Tetley Group by Tata Tea in 2000, has invested an undisclosed amount in Teabox , which aims to become the first global premium tea brand from India. Teabox sources teas from estates in Darjeeling, Assam, Nilgiris and Nepal, and ships them directly to customers around the world. So far, the company has shipped over 60,000 kilograms of tea leaves in its 3-year run. Ratan Tata is one of India’s most prolific angel investors and will help guide the company thanks to his experience and business acumen.
Starbucks announced plans to drop the stagnating experiment of Teavana tea bars meant to emulate the success of their coffee houses. The company, which planned hundreds of such locations just a few years ago, has now seemingly abandoned the idea of standalone tea bars due to their poor performance, but vowed to expand the to-go tea offer in Starbucks locations nationwide. Three Teavana Tea Bar outlets in New York City will be converted to Starbucks this spring, whereas the one in Beverly Hills, CA will be permanently closed. A fifth location in Seattle will remain open as a testing ground for new concepts. The move highlights Starbucks' challenge of promoting its smaller brands, with 23 stand-alone cafes of La Boulange having been closed last year.
Starbucks and Tata Global Beverages have teamed up to bring the Teavana brand to India. The joint venture, called Tata Starbucks, is looking to introduce the tea chain to a massive number of India's seasoned tea drinkers despite concerns about price sensitivity and supply chain complexities. According to the company, the Indian business may one day rival some of its biggest markets, although regional challenges remain and may require greater customization and adaptation to local palates. A high churn rate was also singled out as a critical challenge of the beverage business in India and something that the company needed to address.
Some of the UK's leading tea brands announced a halt in purchases from the Assam Company, which was implicated in last year's BBC report about dangerous working conditions. Twinings, Taylors of Harrogate and Fortnum & Mason stopped buying tea from a group of estates that was found to breach rules by allowing workers to spray agrochemicals without proper personal protective equipment. The Rainforest Alliance and The Ethical Tea Partnership, both involved in the certification of the estates, have now stripped the Assam Company of its certification and have admitted flaws in the audit process. As a result of the BBC investigation, the organizations also announced stricter qualifying criteria, including the provision of adequate housing, water supply and sanitation to plantation workers.
Shrugging off talk of a Chinese slowdown, Starbucks CEO Howard Schultz remained upbeat about the country's long-term prospects and announced plans to open thousands of new locations. While coffee culture has exploded in China recently, it remains a country of tea drinkers and this move may also pave the way for greater exposure of Teavana's brand within its stores. The company's fourth quarter revenue from Asia Pacific region totaled $652 million and more than doubled versus last year, although same store sales grew at 6% compared to analysts’ estimates of 9.6%.
Following a host of acquisitions in 2015, including JAB's marquee deal for Keurig, financial experts predict that Dunkin Brands may be ready to make a splurge in 2016. According to The Street, Davids Tea may be the preferred target due to a low share price, which is down about 50% from IPO highs. The acquisition would also give Dunkin access to the growing US premium tea market and allow to add popular teas to its menu, as well as to launch ready-to-drink and capsule offerings with current partners. Strategically, the deal would make Dunkin better positioned against Starbucks, which purchased Teavana for $620 million in 2012.
PepsiCo recently unveiled a new line of vending machines focusing on healthy, or healthier, food and beverage options with its tea brands playing a prominent role. The company aims to station several thousands of Hello Goodness machines in healthcare, recreational, transportation, governmental, workplace and educational facilities around the country. The machines will be fitted with real-time reporting and cashless payments. The move reflects a strategic pivot towards healthier brands within PepsiCo's portfolio, including Pure Leaf tea and Lipton iced teas, which are expected to be featured prominently as alternatives to soft drinks.
Davids Tea raised annual projections after a successful third quarter that saw the Canadian tea retailer post solid sales growth despite widening losses. The company continued to expand at a quick pace buoyed by 18 store openings across the US and Canada during the quarter, posting $26.5 million in sales, which is 32% higher than the same quarter last year. In turn, annual sales estimates were revised slightly upwards to between $128 million and $130 million. However, company losses quadrupled to over $600,000 compared to the same period last year and gross margins narrowed to 49.6% from 52.4%. Same store sales, a key industry metric that looks at existing store sales and online activity, rose 6.3%, which is in line with previous quarters. The company's shares are trading slightly higher as a result.
JAB Holding announced the acquisition of domestic beverage system manufacturer Keurig Green Mountain yesterday, creating one of the biggest players in the international hot beverage industry. The company thereby secures the leading position in US single-serve coffee market, the industry's fastest-growing segment, with an eye on maximizing economies of scale and brand synergies. JAB Holding has now spent more than $30 billion in the past four years acquiring major coffee brands such as DE Master Blenders, Jacobs, Caribou Coffee and Peet’s Coffee & Tea, as well as specialty tea manufacturer Mighty Leaf. The $13.9 billion deal is a cash transaction with a payout of $92 per share, which is 78% above Keurig's closing stock price on Friday.
Teforia, a startup that recently unveiled an innovative domestic tea brewer, has raised just over $5 million in seed funding from several venture capital firms. This follows a successful pre-order campaign that saw the company sell out its first batch of 500 brewers at a reduced price of $650, compared to the expected retail price of $1300. Teforia brewer stands out with a unique system able to adjust brewing settings to each tea variety for optimal flavor extraction. The challenge for the company is convincing tea drinkers to shell out several times more than for other domestic hot beverage systems. The investment, coming from firms like Upfront Ventures, Lemnos Labs and PreAngel, will be used for research and development purposes.
Hakkasan Group, an international operator of upscale Chinese restaurants, announced plans to open two luxury dim sum tea houses under its Yauatcha brand in the US. Yauatcha restaurants, launched in London more than a decade ago and now with 4 locations in India, pair fine Chinese dining and dim sums with a comprehensive selection of specialty teas, inspired by founder Alan Yau. The new sites will be located in malls in Houston and Honolulu, and will serve as testing grounds to adapt the concept to the US audience and before a larger expansion. According to the company, the Yauatcha brand was chosen as more casual, approachable and therefore more scalable. Hakkasan group has been expanding aggressively in recent years, with revenue increasing almost 600 percent since 2012.
Whittard of Chelsea, a UK tea retail chain, is looking at establishing a physical and online presence in China following growing interest from Chinese tourists and online shoppers. The company reported increased sales from Chinese tourists, as well as a significant number of website visits from mainland China. The trend of the English traditional teatime is thought to be behind this rise in popularity, as afternoon tea becomes a lifestyle phenomenon in China, especially among younger generations. Earl Grey and herbal blends are particularly popular with Chinese consumers. Whittard has undergone major restructuring in recent years, which involved the closure of dozens of loss-making stores. It reported a £1.3 million pre-tax loss last year on a turnover of £28.6 million.
David Bromwich has set his sights on the ambitious goal of developing a unique flavor profile for teas grown in the US. Similarly to teas hailing from India, China or Japan, which all have distinctive organoleptic features, Bromwich is experimenting with various types of teas from different US plantations to impart a style unique to the US. To achieve this goal, he's invested in a new processing plant and sought help from tea consultants to experiment with different growing conditions and processing techniques of rolling, frying and withering leaves. He hopes that working with small-scale farmers from states such as Hawaii, Mississippi and South Carolina will enable him to unlock unique American features that will stand out in the marketplace. Bromwich picked up first and second place awards at this year's inaugural Tea of the United States Awards competition.
Village Tea Co. has been acquired by Affinity Beverage Group almost exactly a year after a majority interest in the company was purchased by Accel Brands, a beverage holding company. Affinity Beverage is led by Accel Brands and Village Tea senior management and seeks full control of the company's future to build a health and wellness lifestyle brand beyond tea. Affinity CEO Janon Costley will remain in his role as CEO of Village Tea, while Affinity advisory board member and Village Tea founder Martin Ekechukwu will continue in his role as Brand Manager and President. Accel divested from the tea market to focus on its core wine and spirits business.
Capital Teas recently opened its 15th and most expensive retail location in Annapolis, MA that reflects the company's growing ambitions in tea retail. Thanks to private equity funding and growing same-store sales, Capital Teas expects to double the amount of stores by the end of 2016. Revenue is forecast to reach $5 million in 2015 and $10 million next year, as the company plans to add more than a dozen locations on the East Coast. The new store, located in Westfield Annapolis mall, features a 16-foot hand-carved rendering of the Maryland statehouse and cost $400,000 to build. Capital Teas is also experimenting beyond loose tea with trails of kombucha fermented tea and a line of tea-infused cosmetics.
Seth Goldman, the co-founder and "TeaEO" of Honest Tea, is transitioning out of his active role in the company to become executive chairman of a food startup. As Coca-Cola integrates Honest Tea further into its brand portfolio, Goldman, who still owns less than 10% of the company he started almost 20 years ago, will remain in a part-time position at Coca-Cola and work in the Venture and Emerging Brands unit. Goldman helped guide Honest Tea to $170 million in annual sales by positioning it as an alternative to sugary sodas with a commitment to social responsibility. The company is expected to sell 300 million bottles of drinks this year. Goldman will take up the position of executive chairman of Beyond Meat, a California startup for plant-based products that aim to mimic the taste and protein value of meat.
Bethenny Frankel, star on Real Housewives of New York and creator of Skinnygirl drinks, has filed a lawsuit against the operators of SkinnyGirl Tea over the use of the term. Frankel's company SG Marks claims the competing brand gained an unfair advantage and effectively "piggybacked" on its success by using the same brand name and similar branding for its range of detox teas. The lawsuit requests the removal of the term Skinnygirl from all products and seeks undisclosed monetary damages. The website of SkinnyGirl Tea, as well as the corresponding social media accounts, have since been removed or suspended.
Bridge Over Troubled Waters, a nonprofit organization, is suing the tea chain Argo Tea over breach of contract and refusal to pay rent on a real estate property in Boston, MA. According to the lawsuit, the nonprofit signed a lease with Argo Tea in January to open a retail store and cafe near Boston Common, which also stipulated that necessary permits would need to be obtained for the store. The lawsuit claims Argo Tea made no effort to obtain those permits and unilaterally abandoned its plans to open the cafe without informing Bridge Over Troubled Waters. The motion seeks more than $1.5 million in damages for the mission of helping runaway and homeless youth.
Kinnettles Farm in Angus, Scotland's only single estate tea farm, introduced its first commercial tea harvest. Despite a very low yield of just a few pounds, the owner is proud of years of research and experimentation that went into it, and expects a bigger crop next year. Having noticed similarities in climate with England’s most famous Tregothnan tea estate in Cornwall, Susie Walker-Munro embarked on a project that involved a lot of experimentation with tea plants, soil, water and processing. This lead to a total of 2 kilograms for the 2015 harvest, which is sold at Edinburgh's PekoeTea shops for £50 for a 20-gram tin. The company’s hope is to bring prices down dramatically as yields increase.
World Tea Media, the organizer of the World Tea Expo, has been acquired by information services company Penton. World Tea Media accompanied the rise of specialty tea in the US and has become the leading annual trade event. It later added World Tea Expo East and the North American Tea Championship to its portfolio of events, in addition to a digital industry news platform. The company was previously purchased by F+W Media in January 2012. Headquartered in New York, Penton hopes its knowhow in accelerating emerging consumer market segments can leverage World Tea Media's market-leading position and information platform.
Teavana abruptly closed one of its first tea bars after less than 2 years in business. The bar, located on N. Southport Avenue in Chicago, was heralded as a new concept in 2013 more akin to a bar than a tea shop, featuring signature tea lattes, breakfast food and flatbread sandwiches. At the time, Teavana had plans to open 1,000 locations within 10 years. A company representative confirmed that the bar was closed after "evaluating the stores' portfolio", which suggests the concept may not have proven as successful as initially hoped for. Following the closure, only five such bars remain in the US, in New York, Seattle and Beverly Hills. Chicago is now home to just one Teavana store, located on N. Michigan Avenue.
Stir Drinks, a UK tea startup, aims to combine the everyday ritual of tea with improved digestive health. The new tea brand, launched by several veterans of the beverage trade, hopes that its Daily Cultures range will promote a more convenient consumption of probiotic cultures. The three products in the line, a breakfast, green and peppermint tea, contain a patented taste-neutral and heat resistant bacteria, which the company claims are up to 10 times more effective than some dairy cultures in yogurts. Stir Drinks plans further product innovations ahead as it hopes to expand to the US and international markets.
Following years of litigation between owners, Arizona Beverage Corp. is regaining lost ground with a wealth of new products and initiatives. The manufacturer of iconic AriZona iced teas is looking to make up lost market share to competitors like Lipton, Snapple and Pure Leaf, who have made inroads as the legal battle over the valuation of the company dragged on over 7 years. Since the settlement, AriZona has launched a pricier iced tea made with real sugar, a tea steeped in oak chips and a coconut based malt beverage called Coco Nutz. Now, AriZona is looking to introduce Crazy Cowboy lager beer, a category that may generate 25% of business by 2020 according to owner Vultaggio. It has also revamped its website for the first time in a decade and has plans to enter African and Asian markets. However, some things are likely to remain the same at AriZona, including the 99-cent price tag of the iconic iced tea and its refusal to use traditional media for advertising.
The Coffee Bean & Tea Leaf, a specialty coffee and tea chain with over 1,000 locations worldwide, announced major expansion plans in China. The company signed an exclusive development agreement with E-LAND, a South Korean retail conglomerate, to open over 700 locations in the years to come. E-LAND operates 7,300 fashion, retail and entertainment outlets and has been recently expanding into food and drink. For Coffee Bean & Tea Leaf, this is a big step in establishing a meaningful presence in one of Asia's main markets, where its rival Starbucks already benefits from a significant stronghold with 1,700 locations. Following the opening of its first units in Japan earlier this year, the company plans to open the first store in China in the fourth quarter of 2015.
Teatulia was named one of 25 Most Innovative Consumer Brands for 2015 by CircleUp in collaboration with Forbes. The Denver-based company was singled out for its socially and ecologically sustainable business practices, namely sourcing organic tea from own organic tea garden and establishing a social cooperative in Bangladesh. Teatulia directs funds from sales of tea in the US to education, health and cattle-sharing projects within the tea-growing communities in Bangladesh. The company was selected from over 340 nominations submitted by the public.
T2, an Australian specialty tea retailer, is looking beyond London as it prepares to open its first store outside of the British capital. In line with previously announced plans to open hundreds of stores worldwide, the company, backed by Unilever, which purchased it in 2013, has so far set up five stores in Greater London area and is now planning to open a new one in Cheltenham, a wealthy spa resort town in Gloucestershire. According to T2, the mix of affluent residents and students reflects its target and makes a great combination for one its stores. The location, which offers over 200 varieties of gourmet tea and will open this September, will have three areas: a retail space, a smell table and a tasting bar.
In pursuit of a new level of direct trade, Verdant Tea, a specialty tea retailer from Minneapolis, will relocate its operations to China starting this summer. The owners plan to massively expand the offer of teas sourced directly from small farmers and sent straight from China to guarantee maximum freshness. Verdant Tea will move as much of the company's operations over there, including packing and order processing, which should cut total transit times and eliminate warehousing. The retailer will also be partnering with a local tea farmer to open a tasting room and tea shop.
The status of Chicago as the hotbed of the US tea industry gained further credibility with Dunkin Donuts announcing plans to test a selection of higher quality teas in the Windy City. As a response to Starbucks and other competitors improving their tea offer, Dunkin Donuts plans to trial five varieties of black and herbal teas (chamomile, hibiscus and mint) from October with the hope of bringing them to a nationwide audience later on. The company sees tea as the natural extension of its breakfast-focused business and a way to attract higher-end consumers who may have previously preferred Starbucks.
East West Tea, the company behind Yogi Tea, is planning a new storage and production facility in Eugene, OR, which would double its footprint and consolidate several locations into one. The company is deciding whether to build a plant and offices totaling 150,000 or 200,000 square feet, and plans to have the space ready by 2017. The facility will house the majority of its US workforce, which currently stands at 103 employees and is expected to grow by 40 positions by 2018. The three locations that now serve as office, factory and warehouse would be closed down as a result. East West Tea also has locations in Hamburg, Germany and a tea packaging plant in Imola, Italy. Court documents reveal that Yogi Tea had sales of $27 million in 2009.
Peet's Coffee introduced a range of iced teas under the Mighty Leaf brand, which is to become the umbrella brand for all of its tea products. Mighty Leaf iced teas are freshly brewed in small batches across Peet's locations and cover black, green and herbal categories. Priced between $1.85 and $3.85, the range of drinks and infusions replaces Peet's former iced tea and tea cooler beverages. While Mighty Leaf operates as a separate entity, the brand will now unite all of Peet's tea products, some of which will be rebranded in the months ahead. Peet's acquired Mighty Leaf Tea last year to gain a foothold in the specialty tea market. Earlier this year, Peet's brought in a former PepsiCo and Diageo executive to oversee the company's operations.
Royal Cup, a coffee importer, roaster and distributor, announced the acquisition of Teasy Teas, a specialty tea retailer. The move is aimed at diversifying the company's premium tea offer and strengthening its position in this growing market segment. According to Royal Cup, one of the main goals was to stay relevant to the millennial generation, which has a particular affinity to tea. Teasy Teas was founded in 2004 by Marshall Malone, who oversaw company’s growth and expansion until now, as well as its relocation from New England to Alabama. He will stay on at Royal Cup as tea category manager. Teasy Tea offers over 50 varieties of tea and services 6,000 customers.
While London is famous for thousands of traditional pubs, it may also host the first ever pub solely dedicated to tea. Brew, which is currently in crowdfunding stage and has already raised two-thirds of required capital, plans to bring high tea to London's high street. The idea is centered on serving loose tea and other tea-based beverages in a pub environment, including tea cocktails, such as "earl grey and tonic" and "Oolong martini", and accompanying snacks matched to the taste of the tea. The company plans to open the first tea pub in south London and one in east London later on.
Fuze iced tea is hoping an 80's movie star will help revive lackluster sales. Mr. T, star of "The A-Team" series and "Rocky III", will feature prominently in a series of short videos with a fun, light tone. The brand, owned by Coca-Cola, is concentrating on digital media preferred by millennial consumers, with videos running on digital platforms such as YouTube, Spotify and Xbox. The campaign will also include a variety of social content, out-of-home ads and sampling. According to market research by IRI, sales of Fuze iced tea were $125 million last year, down by 18% compared to the previous period. The company spent $10 million in 2013 and 2014 on traditional media, much less than Coca-Cola's other iced tea brand Gold Peak, which spent close to $20 million.
Starbucks announced strategic changes for its Teavana brand, which include shifting focus to expand the brand in Starbucks stores, as opposed to growing the number of tea outlets in malls. When Starbucks purchased Teavana back in 2012, the coffee giant had plans for 500 stores by 2015, although only 360 currently exist. This discrepancy is due to Starbucks opting to heavily promote Teavana's products in its own stores by phasing out its Tazo brand and the company confirmed plans to build on the success. Starbucks also chose to pursue this route in select international markets to grab a larger a slice of the $125 billion global tea industry. Finally, Starbucks announced a reshuffling of the line of reporting for managers of its Teavana division, with the company’s global chief marketing officer overseeing operations from now on.
In its first quarter as a public company, Davids Tea posted an operating loss of over $75 million, with the costs of the IPO and the weakness in the Canadian dollar cited as main driving factors. Sales grew by 29% to just under $30m over the quarter, although comparable sales for stores open at least a year grew just 6.3%. Gross profit as a percentage of sales decreased to 53.3% from 56.6% due to weaker Canadian dollar and higher supply chain costs. Davids Tea opened 7 new stores in the quarter to bring the total for the year to 35 and 161 overall. Reflecting investor dissatisfaction, the company's share price took a significant hit, trading at around $20 on Nasdaq, about 30% lower than it did last week. Proceeds from the IPO were about $55m.
Zealong Tea, New Zealand's only commercial tea company, has found a receptive audience in China thanks to the pristine environment where it is cultivated. Specializing in green and oolong teas, Zealong Tea opened a shop in Beijing this year, where tea is particularly valued and premium varieties can fetch thousands of dollars per pound. According to the company, its products are particularly prized because there are no chemical sprays, fertilizers or additives used in production. The company currently cultivates 48 hectares of tea plants and produces about 20 ton of tea annually.
Dr Pepper Snapple Group is giving the Snapple brand a makeover in time for the iced tea season, with a new logo and look, as well as an ad campaign highlighting its New York heritage. The brand refresh features a hand drawn sun graphic within the logo and a tagline "Born in New York, Made for Everyone" intended to highlight the company's New York City roots, where it was founded in 1972. The new visual identity is intended to support the next phase of Snapple's expansion, as it moves beyond the East and West coasts into Middle America and international markets. The new look will apply on all of the company's products effective immediately.
The manufacturers of Inko's iced tea are being sued over allegations that it is mislabeled as "all natural" since it contains ascorbic acid. The lawsuit, filed in US District Court in New York, claims that ascorbic acid, which is widely used as a preservative in bottled beverages, constitutes a "“non-natural, highly chemically processed ingredient." According to the lawsuit, ascorbic acid is labeled as vitamin C on the packaging, yet is not extracted from the citrus fruits. It is therefore "industrially synthesized via complex chemical synthetic routes and thus cannot be considered 'minimally processed". The plaintiffs are seeking more than $5 million in damages plus court costs and attorneys fees.
In the first day of trading on the Nasdaq stock exchange last Friday, shares of Davids Tea surged as much as 43%. Trading under the ticker symbol DTEA, the shares were initially priced at $19, just above the company's estimate of between $17 and $18. By close of trading on Friday, Davids Tea shares were exchanging for $27 and are currently priced just below $30. The company sold about 5.1 million shares, with about 2 million shares coming from cofounders David and Herschel Segal. Davids Tea operates 136 tea shops across Canada and 24 in the US, and hopes the IPO will fund a new expansion push to take on Starbucks' Teavana. There are plans for 10-15 US store openings this year alone. According to the latest SEC filing, sales grew 31.5% to around $114 million in 2014.
Inca Tea, a startup launched just over a year ago, has found a new niche in the tea industry in the form of purple corn-based tea. The founder, Ryan Florio, discovered the beverage during a trip to Peru in 2012. There is some research showing that purple corn tea may help with ailments like inflammation and diabetes, but Folio decided to focus on its naturally sweet taste. A year after inception, the blends are sold in about 300 local stores and about a dozen foodservice outlets, as well as in Inca Tea's own cafe in Cleveland Hopkins International Airport. A second airport cafe is already in the works in Boston, and the company plans to add three to five cafes in cities such as Baltimore and Pittsburgh next year. The company made about $140,000 in sales in the first four months of 2015.
Following public outrage and declining sales, Keurig Green Mountain announced plans to scale back its controversial DRM strategy. Using exclusive Keurig-approved coffee pods is a key feature of the second-generation home brewer and My K-Cup, a reusable pod that could be filled with virtually any coffee grounds, was discontinued. The strategy was intended to replicate the printer-and-ink model at the expense of consumers brewing own coffee in reusable pods. Now, the company was forced to reverse course in light of customer complaints on Facebook and Amazon, as well as last quarter's sales figures, with revenue from brewers and accessories down 23%. The CEO Brian Kelly admitted that the company was "wrong" and said that Keurig would bring the My K-Cup reusable filter back in time for the holidays.
Wendy's, the third largest burger chain in the US, is set to add an organic iced tea made by Coca-Cola's Honest Tea to its permanent menu. With organic ingredients being pricier and harder to source in large quantities, this would be a major milestone for an organic product to be featured in the fast-food industry and beyond the specialty market. According to the Organic Trade Association, more than 80% of families in the US consume some sort of organic products on a regular basis and sales reflect this trend: they totaled $36 billion last year and grew by 11%. The mango and pineapple flavored iced tea blend, called Honest Tropical Green Tea, will retail at $1.69 for 20oz and comes at a premium compared to the regular sweet tea, which costs $1.39. Wendy's hopes that especially the millenials will be more than willing to shell out more for an organic alternative.
Adagio Teas recently expanded its Latin American operations by establishing a retail presence in Chile. Mirroring its US activities, where the artisan tea company operates an e-commerce platform alongside several stores in the Chicago area, Adagio Teas opened two outlets in the capital Santiago together with a local web store. Both sites are located in upscale shopping malls and feature over 100 varieties of loose teas sourced directly from origin, as well as many popular tea accessories. Going forward, the company plans to open about two stores per year in Santiago and other big cities in a bid to tap into Chile's high per capita consumption and its deep-rooted tea culture. Wholesale services for local trade clients are also expected to become available in the near future.
Mighty Leaf Tea announced the appointment a former PepsiCo and Diageo executive Sheila Stanziale as chief executive officer. It's a major leadership change orchestrated by the new owners Peet's Coffee and Next World Group, a private investment firm, which purchased the tea company in August 2014. Having previously worked at Nabisco, General Mills, Kraft, PepsiCo, Diageo-Guinness and Hain-Celestial, she will oversee Mighty Leaf's global operations and report to its board of directors. In a similar tie-up to Starbucks and Teavana, the company also revealed that its hot, iced, and bagged teas would be available at all Peet’s retail locations. Finally, Mighty Leaf announced the rollout of several new products in the coming months, including an extension of its teabag range.
Founders of AriZona iced tea brand have finally reached an out of court settlement in the ongoing ownership saga of the billion-dollar brand. The terms of the settlement between Domenick Vultaggio and John Ferolito were not disclosed, but did receive a preliminary approval from a New York state court judge. The settlement was described as a "compromise" in the best interest of both parties by Ferolito's lawyer. The long-running legal feud centered on the valuation of the iced tea manufacturer, with estimates ranging from $447 million to $3.2 billion from opposing sides. In October 2014, a judge ruled that the company was worth approximately $2 billion, setting Ferolito up for a roughly $1 billion payout.
In a heavyweight battle of bottled iced teas, PepsiCo's Pure Leaf is dominating Coca-Cola's Golden Peak and Honest Tea on the US market. With consumers turning away from carbonated sodas, the stakes are higher than ever in the category, where sales have more than doubled in the last 10 years, reaching $5.3 billion in the US and about $50 billion globally in 2014. PepsiCo is the absolute market leader with 40% of the iced tea market, compared to Coke's 5.5%. Sales of Pure Leaf, relaunched in 2012 under a partnership with Lipton, jumped by 49% last year. The fact that it is brewed with real tea leaves, as opposed to Golden Peak, which is made from concentrate, may be one factor for its success.
For this year's Earth Day on April 22, Bigelow Tea focuses on its green track record and sustainability credentials. With a turnover of roughly $150 million and an annual production capacity of 1.7 billion teabags, the company is a leader in sustainability practices in areas such as tea plantation conservation, recyclable packaging and renewable energy. According to Bigelow Tea, recent packaging innovations save over 500,000 pounds of packaging material per year. 85% of all packaging material is also compostable, biodegradable or recyclable. In addition to this, the company's Fairfield, CT plant boasts rooftop solar panels, LED lights and waterless urinals.
Ajiri Tea has carved out a niche market its products thanks to a novel approach to social sustainability. The company offers Kenyan coffee and tea packaged in bespoke packaging material and hand-decorated by local women. This allows Ajiri Tea to employ 63 women in Kenya, most of whom make $40 to $200 a month, compared to an average of $1 a day of pickers on tea farms. The products are then distributed through 500 retailers in the United States, Europe and Australia, with profits directed back to the Ajiri Foundation, which provides fudning for school fees and expenses for 29 orphans in the region, as well as to improve the quality of life of each worker. The company, currently bringing in $225,000 in annual sales and growing at a 30% rate, hopes to raise $40,000 via Kickstarter to fund a packaging upgrade, enabling it to expand into foodservice.
Canada's DavidsTea filed a registration with the US Securities and Exchange Commission for an IPO with an initial estimate of $75 million. The company operates almost 160 stores in Canada and the US, with further 40-50 store openings in North America planned for this year alone. Following the IPO, as many as 300 additional locations could see the light of day in the US and another 100 in Canada. According to SEC filings, the company's goal is to "create an inviting atmosphere and stand in stark contrast to common perceptions of tea as a more traditional product." In its latest fiscal year, sales grew by 31% to about $114 million with a net profit of about $9 million, following two consecutive annual losses. DavidsTea plans to list on the Nasdaq stock exchange with the ticker symbol DTEA.
Cool Japan Fund, a public-private fund supporting Japanese business and culture overseas, announced plans to invest more than $2 million to develop upmarket green tea cafes in California. The green tea cafes, which are yet to be named, are expected to serve beverages such as "sparkling green tea" and "matcha expresso." The first outlet should open later this year and 50 more are planned in the next decade. Cool Japan Fund will own 49.9% of Green Tea World USA, which will operate the cafes in cities such as Los Angeles, San Francisco and San Jose, with the remaining 50.1% in the hands of a consortium of Japanese companies. Cool Japan Fund invests in producers of Japanese culture such as animation, comic books, movies, fashion and food, to help promote them overseas.
Raizana Tea is looking to expand online and brick-and-mortar operations as sales of herbal blends take off. The company, run by a married couple out of Fresno, CA, has been selling locally-blended teas online since 2009 and has amassed a devoted following online and among trade clients. It currently boasts an average of 700 online orders per month and wholesale accounts in several states. The company now plans to expand beyond the current retail location, which also serves as its production base. The owners found a new retail space in Fresno, which is expected to sell healthy foods alongside herbal blends, whereas the former location will be used predominantly for production purposes.
Rooibee Tea, a manufacturer of rooibos-based bottled teas, wrapped up raising $2 million intended to expand and improve its product lineup. The initiative, which took almost a year to achieve, saw the company raise about $1.5 million from private investors and $500,000 from a crowdfunding website. Funds will be used to add two new flavors to Rooibee's current range of three kids' teas. They will also enable to transition all products to BPA-free plastic bottles. Rooibee also announced the addition of investors Charles Schnatter and Benton Keith to the board of directors.
Teabox, an India-based online tea company, completed a fresh round of funding worth $6 million to grow its e-commerce platform and expand operations in new markets. Teabox offers Indian and Nepalese premium teas directly from source, having established storage and fulfillment facilities near the plantations. The company currently works with over 200 plantations and delivers teas to 75 countries. Future plans include fulfillment centers in China, Japan, Korea and the US in order to speed up deliveries and provide local customer support. Since its inception three years ago, Teabox has sold over 40 tons of tea, with orders growing tenfold last year alone. JAFCO Asia led this Series A round, with participation from previous investors Accel and new investors Keystone Group and Dragoneer Investment Group.
South Africa, known for its rooibos herb and wines, is home to a new winemaking technique that combines both. It is hailed as a revolutionary method to brew wine, beer and cider, eliminating the need for sulphur dioxide, which is a known allergen. According to research, rooibos and honeybush herbs, which are naturally caffeine-free and low in tannins, contain powerful antioxidants that may help preserve wine naturally. Audacia winery, which holds the patent in 83 jurisdictions, uses indigenous rooibos and honeybush wood chips in the wine making process instead of the traditional oak. The company already exports the wine to China and hopes the rest of the world will follow suit.
A young tea startup has set its sights on the lucrative tea pod market thanks to the hands-on approach of its owner. Chris Savage, a former Northrup Grumman engineer, started the company from his own kitchen and raised $7000 via a crowd funding website to get the project off the ground. He went on to build the pod manufacturing machine himself and started fulfilling orders in 2013. True Honey Teas grossed $60,000 in its first full year of business, but expects that number to rise to $300,000 this year thanks to listings on Amazon Prime and presence at 3 Northern Virginia Whole Foods stores. True Honey Teas offers 14 varieties of tea pods containing organic teas.
The Dubai unit of Lipton, operated by Unilever, is set to become the biggest tea production facility in the world. Benefiting from Dubai's tax free zone and strategic location between tea producing and consuming countries, Lipton Jebel Ali Factory produces the equivalent of 2 million cups of tea an hour, or almost 20 billion a year. Production volume grew by 50% over the last five years, from 22,000 tons in 2009 to 33,000 tons at the end of 2014, making it the biggest branded tea facility in the world. The factory sources its tea from 15 different countries, with the biggest suppliers being Kenya, India and Vietnam, and exports to 50 different countries.
Canadian specialty tea retailer DavidsTea is eyeing a stock market floatation later this year, according to people familiar with the matter. The company assigned lead roles to Goldman Sachs, JPMorgan Chase and Bank of America in preparing for a potential public offering. Based in Montreal, privately owned DavidsTea was founded in 2008 by David Segal and his cousin Herschel Segal, who oversaw rapid expansion across Canada and in the US. The retailer currently operates over 100 locations in both countries, with multiple shops in San Francisco, New York, Chicago and Boston areas. DavidsTea is a direct competitor of Teavana, purchased by Starbucks for $620 million in 2012.
Fuze Tea and Gold Peak are the two latest additions to Coca-Cola's portfolio of billion-dollar brands, reflecting increased consumer health awareness and growing preference for iced teas over soft drinks. Gold Peak reached a billion dollars in sales in eight years following its launch and benefits from one of the highest consumer conversion rates in the category. Fuze Tea took even less time, reaching one billion in three years thanks to a vacancy left by Nestea, whose distribution agreement was transferred from Coke to Nestle. Fuze comes in more than 30 varieties and is sold in 40 markets worldwide. According to IRI, a market research firm, US multi-outlet sales of ready-to-drink iced tea grew by 6% to $3.2 billion in 2014.
Japanese ready-to-drink tea manufacturer Ito En is pivoting towards coffee with the recent announcement to purchase the US coffee manufacturer Distant Lands Coffee. Based in Tyler, TX, Distant Lands sells green and roasted coffee under its own brand, as well as private label. Last year, the company reported sales of $161 million with an operating profit of $668,000. The move is expected to strengthen Ito En's existing portfolio of coffee brands thanks to Distant Lands' supply, production and sales infrastructure. The Japanese tea company will also leverage Distant Lands’ pod-based products and strong foodservice business. Ito En's US sales will total around $88 million this fiscal year, with 9% growth.
Chinook USA, manufacturers and marketers of Uncle Si's iced tea, are suing the stars of Duck Dynasty for failing to appropriately promote the brand. The complaint, brought forward after Chinook USA filed for bankruptcy, alleges that stars of the reality TV series Duck Dynasty and members of the Robertson family failed to promote the products on national TV and made conflicting licensing agreements with other beverage companies. To secure the endorsement, Chinook USA was supposed to pay a personal endorsement fee of $1 million. It claims it spent more than $4.5 million to launch Uncle Si's iced tea.
Starbucks is phasing out Tazo teas from its outlets and will only sell them in third-party stores from now on. The world's biggest coffee chain will replace mass-market quality Tazo products with a more premium offering from Teavana, a specialty tea retail chain it purchased for $620 million in 2012. According to the company, the move reflects the growing popularity of tea in the US. Tazo will remain in its portfolio, with products confined to grocery stores and large supermarket chains such as Target and Wall-Mart. Starbucks acquired the brand for $8.1 million in 1999. Current sales are estimated to be around $1 billion.
Two tea companies with similar nomenclature will settle their differences in court over the use of the word "queen". Queen Mary Tea, which operates the Queen Mary Tea Room in Seattle, filed a lawsuit against The Queens' Tea, a tea company from Salt Lake City, claiming it infringed on its trademark. However, the term is used in a slightly different context by The Queens' Tea, which was founded by a same-sex couple and refers to an effeminate homosexual. The plaintiff also alleges to have suffered a hate campaign for being supposedly anti-LGBT. The Queens' Tea has ceased online trading until a federal judge rules on the matter in the months ahead.
Long Island Brand Beverages, the manufacturer of Long Island Iced Tea, and Cullen Agricultural Holding jointly announced that they have entered into a definitive merger agreement. The merger was spurred by favorable market and consumer trends in the US ready-to-drink market, in addition to strong brand awareness of Long Island Iced Tea, which is mainly available in grocery stores across the Northeast. According to IBISWorld, sales of ready-to-drink tea should reach $5.3 billion in 2014. The deal involves former members of Long Island Brand Beverages retaining approximately 63% of the new company, with the rest of the shares going to Cullen shareholders. It is subject to regulatory approval and expected to be finalized in early 2015.
Ringtons tea, a British company specializing in doorstep delivery service, has signed two distribution agreements as part of its foray into the US tea market. The deal will see the 107-year-old brand distributed to consumer and wholesale markets on the East and West coasts. Ringtons reported significant growth last year, with sales reaching £47.3 million, or over $70 million, and profits growing by 26% to £4 million. The company, which employs about 500 staff across more than 20 sites in the UK, made significant investment in IT and production to meet rising demand from export markets. With deals already in place in Japan and Australia, Ringtons is turning its attention to the lucrative US market, worth more than $2 billion.
Lemon City Tea, a start-up tea company hailing from Miami, FL, aims to infuse tea time with the flair of South Beach. Each tea variety features a creative name, story and playlist associated with Miami's Latin American, Caribbean, and South Floridian influences. Lemon City Tea works with local bars and restaurants on innovative tea solutions, such as tea-based cocktails and cold-brewed teas for foodservice. The company also funds a community outreach program to promote the creation of vibrant third places. Its teas are available in several Miami locations and online, where loose leaf blends retail for $11-12 for 4oz.
Portola Coffee Lab, the operator of Seventh Tea Bar in Costa Mesa, CA, announced plans to close the location by year's end. Seventh Tea Bar, which serves loose leaf tea and a variety of sweet and savory snacks, did not attract the expected number of shoppers and failed to turn a profit since opening in January 2013. This despite its prime location and a $15,000 state-of-the-art Steampunk tea brewing machine. However, Portola Coffee Lab has not given up on the brand and plans to relocate the tea operation to Orange County or Los Angeles to target more discerning consumers.
Capital Teas plans to double the number of outlets in 2015, using the $5 million cash injection from a private investment firm for aggressive expansion. The Annapolis-based tea retailer received $2.5 million this year, which helped fund several new store, bar and micro-store openings. Next year, Capital Teas aims to add up to a dozen new stores thanks to the second installment of $2.5 million, with locations planned in Baltimore / Washington International Thurgood Marshall Airport, L'Enfant Plaza subway station in Washington, DC and in Princeton, NJ. The type and size of each new store will reflect the local space and demographics.
Verdant Tea, a specialty tea retailer, decided to concentrate efforts on its core business of sourcing small farm teas by opening a new tea house and brewery in Minneapolis and getting rid of a restaurant. The new space will also house Verdant's online retail operations and serve as a brewing and bottling facility for its ready-to-drink beverages, including kombucha and sodas. In an effort to refocus the business on tea, the owners plan to sell the existing location, which has a full food menu and a liquor license, by December 1.
London's high-end grocery store Fortnum & Mason reported record revenue and profits on the back of double-digit growth in tea sales and store expansion. Sales jumped by 14% to £74.4 million, while profits doubled to £3.8 million. The company said hamper sales had increased by 18% during the year and tea sales by 13%. The tea selection features many fine teas in signature caddies, especially prized by tourists. It also opened its second store, first in over 300 years, in London's St Pancras train station, and subsequently two more in Dubai and Heathrow airport. Fortnum just recently introduced the world's first tea grown in Scotland.
London's luxury department store Fortnum & Mason is about to launch the world's first tea produced in the Scottish Highlands. Dalreoch tea comes from a small plantation in the Strathbraan Valley in Perthshire and retails for £200 for 100 grams, which equals to £10 per cup, making it the second most expensive tea ever sold at Fortnum & Mason. The tea will come in two white varieties: natural, similar to white peony, and smoked, with a more nutty character. The launch follows a recent trend of small-scale teas produced in the Western Hemisphere, in countries such as the US, UK and Canada.
AccelPath, a beverage holding company, announced the acquisition of a 70% stake in Village Tea Company Distribution, the parent company of the Village Tea Company brand. Headquartered in National Harbor, MD, Village Tea Company specializes in bulk and packaged loose-leaf teas and tea accessories. The company's founder, Martin Ekechukwu, will continue in his role as president and creative director, whereas Janon Costley will remain in place as CEO. According to AccelPath, Village Tea Company is well positioned to benefit from the growing US tea market and its immediate focus will be on leveraging existing distribution channels in grocery and hospitality. Financial details of the deal were not disclosed.
This week, Capital Teas celebrated the grand openings of two micro-shops in mall locations in Towson and Columbia, MD. The kiosks offer a full-service tea bar with hot and cold beverages, as well as a selection of leaf teas. They will also feature seasonal blends and a "sniffing wall" to familiarize shoppers with the scent of different tea types. Since 2007, Capital Teas opened a total of 12 locations in Maryland, Virginia, Pennsylvania, and Washington, DC. It opened 6 outlets just this year, after securing a $5 million outside investment.
A new smartphone application allows customers of Argo Tea to pre-order and pay for any item on the menu. The app was created to speed up existing customer experience and to bypass the queues of new customers who may need more time to make up their minds at the counter. The software enables customers to pre-order drinks at a number of participating locations in Chicago, New York and Boston, and offers scan-to-pay options. It also acts as a platform for Argo Tea's new loyalty program, with rewards ranging from free Wi-Fi to free drinks. The company currently operates 40 locations across the US and the Middle East.
Tealet, an online specialty tea company, is one of the first tea companies to accept payments by Bitcoin, a popular cryptocurrency. Tealet seeks to bridge the gap between tea growers and tea consumers by selling their teas directly from origin, without middlemen. Integrating Bitcoin into the e-commerce website allows farmers in producing countries to avoid bank charges and currency conversion fees, which can eat up a sizeable portion of their earnings. On the consumer end, paying in cryptocurrency avoids credit card transaction fees of 3% and translates into an equivalent discount for shoppers. Tealet also incentivizes the use Bitcoin within the company itself and offers 20% of a salary to be paid in Bitcoin, with a corresponding amount matched by the company.
Runa Tea, a manufacturer of guayusa-based drinks, secured a $5.75 million investment from Meta Brand Capital, a private equity fund. Runa Tea specializes in loose leaves and bottled beverages made from guayusa, an Amazonian tree of the holly genus, whose leaves contain caffeine and antioxidants. The company works with more than 3,000 indigenous farming families in a Fair Trade relationship. Having previously worked with Runa, MetaBrand Capital saw an opportunity to support a company that shares its values of sustainability and purpose, according to the CEO of the firm. Runa Tea was founded by two college classmates in 2009 and is currently based in Brooklyn, NY.
In a long-running dispute over the value of AriZona iced tea brand, a New York state judge ruled that the privately held company behind it was worth about $2 billion when the lawsuit to dissolve the company was filed back in 2010. The dispute centered around the valuation of a 50 percent stake in AriZona, with estimates ranging from $447 million to $3.2 billion from opposing sides. The estranged co-owner, John Ferrolito, is now expected to pocket about $1 billion for his 50 percent stake in the business, although the court would consider the risk of insolvency in setting terms and conditions of the payout. AriZona commands about a quarter of the US iced tea market, ahead of Snapple and Lipton.
Tavalon Tea, a specialty tea supplier from South Hackensack, NJ, is teaming up with a couple of local chefs to find novel ways of pairing food with tea. The company is joining forces with chefs Thomas Ciszak and Todd Villani to create a five-course dinner menu infused with an array of hot and cold-brewed specialty teas. Dishes include Jasmine green tea with peppermint amuse and duck pastrami paired with a blend of earl grey and lapsang souchong teas. The dinner will take place at Terre a Terre restaurant on October 22.
The East India Company, a trading company associated with colonial Britain and revived in 2005 as a specialty tea and fine food brand, announced aggressive expansion plans in the Middle East after securing major outside investment. It already has flagship stores in United Arab Emirates, Qatar and Kuwait, and expects to operate up to 20 fine food stores and several high tea lounges within 5 years. This after securing a major outside investment from United Arab Emirates-based retailer Emke Group, which operates a network of supermarkets and shopping malls. The deal involves the acquisition of a 10 percent stake in The East India Company and 40% in one of its key subsidiaries, East India Fine Foods Ltd.
Capital Teas is developing a mobile-based payment and loyalty program in the form of an app intended to streamline payments and enhance customer rewards. The company teamed up with LevelUp to create a mobile payment solution that will be placed in the smartphone's operating system among a growing number of mobile payment options by companies such as Apple and Google. The app will also offer a data-driven loyalty program and real-time monitoring of the effectiveness of each marketing campaign. It is expected to be introduced in November.
Tea Guys, a specialty tea importer, blender and wholesaler, opened a new facility in Whately, MA to increase production and storage capacity. The new 10,000-square-foot facility, about three times larger than the previous one, will house more inventory and new tea bagging machines with a capacity of 3,000 teabags per hour. The new space will also allow Tea Guys to expand into other areas of the tea market, such as Keurig K-Cups, cold brew teas, pyramid-shaped tea bags and tea concentrates. The increased productivity is expected to double the number of full-time employees from 10 to 20 over the next six months.
Whittard of Chelsea, one of UK's largest tea retailers, posted a healthy rise in annual sales and profits, as the franchise continues its turnaround following a major restructuring six years ago. Annual profits jumped from £1,4 million a year ago to £2 million, while overall tea sales rose by 16%. International sales, originating from retail operations in 35 countries, grew by 30%. The company was sold to a private equity firm after filing for bankruptcy protection in 2008. Since then, the number of stores in the core UK market was trimmed from 130 to 55, as Whittard refocused efforts on the international market.
Since last week, Williamsburg is home to a bar serving drinks made with matcha powdered green tea, which is a first for New York and the entire country. MatchaBar offers drinks made with the fine-ground Japanese tea, including hot and iced matcha teas, iced specialty drinks and various other concoctions, as well as a selection of healthy snacks. The cafe also retails matcha powder and a range of corresponding tea accessories. According to the manager, one of the main goals of MatchaBar is to educate drinkers and to showcase the correct way to prepare the beverage, which needs to be mixed with an electric mixer or a traditional wooden whisk.
Snapple, one of the leading iced tea brands in the US, will now be available Down Under thanks to an agreement signed between Dr Pepper Snapple Group and Stuart Alexander. Stuart Alexander, an Australian food and drink distributor, will act as an exclusive marketing and distribution partner in Australia, with as series of sampling events in retails stores and city centers already planned. Several major retailers have reportedly signed up to stock the products. The launch is likely to be only the beginning of the group's expansion in Australia, with other brands to follow suit.
A New York court heard final arguments in a case that will decide the fate of AriZona iced tea, the country's biggest iced tea brand. The dispute centers on the price of a 50 percent stake in the company, which is valued very differently by its feuding co-owners. Domenick Vultaggio's lead lawyer warned that assigning a high valuation could tip AriZona into insolvency and imperil its thousand workers. Ferolito's attorney claimed that a sale was inevitable and that the company had many strategic suitors, including Tata Global Beverages, Nestlé and Coca-Cola, willing to pay much more than what the company is worth on paper.
Honest Tea will become the first brand in Coca-Cola's portfolio to be available in K-Cups for existing Keurig hot-brewing machines. This follows Coke's acquisition of a 10 percent stake in Keurig Green Mountain for about $1.25 billion, as well as a ten-year agreement between the two companies to develop products for Keurig's at-home beverage system called Keurig Cold. Honest Tea K-Cups, which will initially be available in unsweetened Just Green and Just Black flavors, are intended to be brewed in the regular Keurig machines over ice, as opposed to Keurig Cold machines, which are expected to be announced later on this year.
The first commercial tea plantation in Canada is getting ready for its first harvest and Canada's first locally-grown tea. Teafarm, located in Cowichan Valley on Vancouver Island, British Columbia, has about 200 tea bushes under cultivation on the 11-acre estate. The bushes were planted four years ago and will begin maturing early next year, with initial harvest planned for spring. At first, farmers were unsure how dry summers and snowy winters would impact the plants, but have since found that extreme weather conditions may positively impact flavor. They still have to decide which type of tea they will create from the plucking. Canadians drink about 9.7 billion cups a year, according to Statistics Canada.
DavidsTea, a specialty tea retail chain originating from Toronto, Canada, opened its sixth Bay Area location in downtown Palo Alto, CA, a few blocks away from the Stanford University complex. It is the company's southern-most US store to date and will be geared specifically towards students from nearby Stanford University. To that end, the store has a slightly different layout to accommodate studying, with seating somewhat separated in the back of the shop instead of being integrated with the tea bar. The outlet sells a variety of loose teas, as well as a range of hot and iced teas to go.
Coca-Cola purchased a sizeable 17% stake in Monster Beverage, an energy drink manufacturer, and is expected to take control of its non-energy brands, including the iced tea brand Peace Tea. The deal, worth $2.15 billion, will see both companies swap their portfolios: Monster will take over Coke's energy drinks NOS and Full Throttle, while Coca-Cola will oversee Monster's non-energy drinks, such as Hansen's Natural Sodas, Peace Iced Tea and Hubert's Lemonade. Peace Tea is a direct competitor of AriZona iced teas and is expected to benefit from Coke's extensive distribution and marketing prowess.
The Two Leaves Tea Company, formerly known as Two Leaves and a Bud, is changing its name back following customer complaints and confusion. The original name was changed a couple of years ago because it was deemed too long, but, according to the company's founder, the decision has now been reversed after customers were dissatisfied with the new nomenclature. Others thought that someone had copied the company. The new name will involve a change on the packaging, which should appear later on this summer. Two Leaves and a Bud, founded in 2004, operates from a small headquarters in Basalt, CO.
The CEO of Nestlé Waters USA blamed Coca-Cola for mismanaging the Nestea brand and treating it like a line extension of soft drinks. Speaking at a recent investor seminar, Tim Brown affirmed Nestlé's commitment to Nestea and highlighted past failings by Coca-Cola, a former production and distribution partner, to treat Nestea as a tea, not a soft drink brand. Nestea has been performing poorly against its competitors in the US and was pulled from the Chinese market earlier this year because of lackluster performance. In response, it has recently undergone a reformulation, shedding 40% of the calories in the process. The products also benefited from a revamp of packaging, graphics and advertising.
Unilever unveiled plans to study the environmental and economic feasibility of applying biological or non-pesticide methods for the protection of tea crops in India. As part of the company's Sustainable Living Plan, a commitment to produce all raw materials using sustainable practices by 2020, a non-for-profit organization will evaluate current practices of crop protection. It will then design protocols for pilot field trials to investigate novel approaches for biological, non-pesticide management of pests together with industry partners.
Peet's Coffee & Tea plans to close several underperforming locations in Michigan and Ohio, some of which opened less than a year ago. The company reported that five of its seven locations in Michigan, which previously housed Caribou Coffee and were rebranded less than a year ago, would close in the near future. According to the company, those five locations and seven in Ohio "have not performed to our expectations and didn’t have a promising future outlook." Despite the setback, the company remains on course to open several outlets in Washington DC and Chicago.
Peet's Coffee & Tea announced the acquisition of the specialty tea manufacturer Mighty Leaf Tea in partnership with Next World Group, a private investment firm. Mighty Leaf distributes its products primarily through specialty retailers, foodservice distributors and hospitality providers across the US. As a result, Peet's will gain a strong foothold in the premium tea market, which has been growing rapidly in recent years, whereas Mighty Leaf will be able to leverage Peet’s resources, capabilities and a network of more than 200 outlets. According to a press release, Mighty Leaf will continue to operate independently and Peet's, owned by a German private investment firm, will continue to produce and market its own signature tea brand across its foodservice and retail channels.
Latest quarterly numbers from Starbucks showcased its ability to draw in customers for things other than coffee, namely tea. Quarterly like-for-like sales rose by 6% thanks to a wider range of novel tea-based beverages under the Teavana brand. These include iced teas and Oprah Chai, a blend designed by Oprah Winfrey back in March. La Boulange bakery items such as breakfast and lunch sandwiches also helped reach record quarterly revenues. Some innovations that the company is pushing include sodas, high-end coffee from its own farm in Costa Rica and a 24-hour store, which recently opened in Beijing.
Starbucks decided to move the headquarters of Teavana from Atlanta, GA to its hometown of Seattle, WA. The relocation will affect 99 employees, who will either move to the Starbucks building in Seattle's SoDo neighborhood starting October 1 or in a year or two. Some positions will be eliminated, so layoffs are also expected. According to Teavana's president, a key challenge will be to retain Teavana's brand identity within a building used to house a coffee company until now. Apart from the relocation, Teavana is also focused on expansion into the grocery category and is exploring the Chinese market, where Starbucks already has a major presence.
Forever Brands unveiled plans for a new chain of bubble tea bars. The parent company of Forever Yogurt, a chain of frozen yogurt franchises, is set to open the first store of the new chain, called Bee & Tea, on July 24. According to the CEO of Forever Brands, expansion in the frozen yogurt market is getting tougher, so the company was looking for new opportunities elsewhere. Bee & Tea will serve black or green teas flavored with up to 30 flavors and a choice of several toppings. Seven additional locations are set to open in Illinois and Wisconsin in the next three months. Many of them will be co-branded stores housing both Bee & Tea and Forever Yogurt.
Brooklyn Bagel, a company specializing in freshly made bagels, is turning its focus towards the coffee and tea market with a new store called 60 Beans. The new location, inspired by the managers' passion for coffee, will serve a variety of coffees and teas, as well as snacks and other items. There are also plans to serve wine and craft beer in the evenings. Brooklyn Bagel, which was recently chosen as the best bagel vendor in New York by BuzzFeed, operates 4 locations in New York. 60 Beans is expected to open the first week of August.
Panda Express, a restaurant chain serving American Chinese cuisine, opened a new type of concept restaurant in California last week, featuring customizable food options and a tea bar. The tea bar offers a variety of beverage options: teas with fruit pieces, milk teas, blended iced teas and regular tea. Tea drinks can also be customized with chewy tapoica balls and sweeteners. Snacks menu includes locally produced cakes and pastries. Panda Express hopes the concept store will highlight elements that can be integrated into existing outlets and will pave the way for more such concept spaces in the future. The company currently has close to 1,700 locations.
Kusmi Tea, a specialty tea manufacturer from Paris, opened its first standalone store in Paris Charles de Gaulle airport. The shop, opened in partnership with airport retailer Lagardère Services, sports white walls to contrast with company's colorful packaging, as well as Parisian design elements. The product range is aimed at travellers, with many assortments and gift boxes on display. The outlet also houses products by the sister brand Løv Organic. Kusmi Tea opened its first store in 1917 on Avenue Niel in Paris. Today, the company operates over 40 stores and smaller retail spaces, most of them in Paris and the rest of France, and a handful in London, Milan, Berlin, Vienna and New York.
Despite the cold winter and excess rainfall, tea bushes in Mississippi's first tea farm are thriving this summer and thousands more are being planted in order to bring back the American tea growing tradition. The Great Mississippi Tea Company, previously known as FiLoLi Tea Farm, currently grows 250 one-gallon plants and 10 three-gallon plants, but is undertaking a bigger propagation program with thousands of additional plants added to the plantation. The company thereby hopes to bring back the glory days of the US tea industry that thrived briefly in late 19th and early 20th centuries. The plantation is also participating in a worldwide study on tea cultivars to identify best-suited growth and cultivation methods for the climate of Mississippi.
Venture For America, an organization that connects college graduates with tech companies, invested $45,000 in Zest Tea, a startup tea company specializing in caffeine-enriched tea and founded by an alumni. The seed investment, donated by UBS Americas, is expected to lead to a larger investment round in the near future, according to the owner of Zest Tea. The company also raised $10,000 through a crowdfunding campaign last year. Zest Tea remains focused on supplying tea to the tech startup market and already has 2U, Swipely and Teespring as clients, but plans to find a way to retail shelves by the end of the year.
Crimson Cup Coffee & Tea is to invest $1.1 million into a second facility in Ohio over the next three years. The specialty coffee and tea retailer is looking to build a larger manufacturing plant that will also house a research and development center in Columbus, OH. Crimson Cup, which works with 350 independent businesses to distribute coffee and tea across nearly 30 states, plans to double its workforce in the process from 20 to 40.
Milo's Tea announced plans to invest over $13 million in its operations in Bessemer, AL. The iced tea manufacturer will expand and improve the current manufacturing facility, as well as purchase an adjoining 3.3 acre site with a 25,000-square-foot building for additional cold storage and future growth. Milo's Tea hopes the expansion will meet the growing demand from clients in 38 states and should create 29 new jobs in the area. The company previously scrapped a $4.6 million expansion plan at the end of 2013, which would have created 24 jobs.
John Harney, founder of Harney & Sons Fine Teas, passed away last week at the age of 83. Harney started the company, which recently celebrated its 30th birthday, in 1983 at age 53. According to his son Michael, he pioneered loose teas when Americans were primarily consuming instant beverages. Prior to starting the company, Harney served in the US Marine Corps and attended the Cornell University School of Hotel Administration. He is survived by his wife, Elyse, five children and nine grandchildren. Harney & Sons Fine Teas currently operates a 90,000 square feet warehouse in Millerton, NY and employs over 160 people.
English Tealeaves, a specialty tea retailer, is now offering consulting services for new and existing tea rooms and cafés. Tealeaves Consultant Services provides a complete plan for setting up a tea café, from inception to full operation with training assistance and consulting at different levels. Services cover all aspects of opening and managing a tea room - from concept review and advice on suppliers to on-premise training and quarterly performance review. By sharing the failures and successes of English Tealeaves, a tea shop based in Parker, CO since 2002, the founders hope to help save other owners in start-up and operational costs, and shorten project implementation times.
A California federal court dismissed a majority of claims in a proposed class action accusing Honest Tea of dishonesty in marketing its Honey Green Tea. The lawsuit alleges that Honey Green Tea iced tea contains a quarter less antioxidants than claimed on the label and is thereby misleading consumers. A US District Judge now found that the plaintiff's state law claims are preempted by the Federal Food Drug and Cosmetic Act. However, the court upheld claims based on the company's use of "honest", citing that such claims are complex and the usage of the word "honest" in the company's branding campaign could be misleading to consumers.
India's Luxmi tea group has acquired Darjeeling's only remaining family owned estate. The owner of the estate, Rajah Banerjee, who's great-grandfather founded the plantation and set up the world's first tea factory in 1859, sold off a 90% stake in the company, but will remain the face of the plantation and will continue to manage its operations. Luxmi group, which owns numerous estates in Assam, Tripura, Dooars and Terai regions of India and produces over 15 million kilograms of tea per year, plans to capitalize on the rich legacy of the estate and expand the brand at home and abroad. The deal is valued in excess of $3 million. Makaibari produces more than 100,000 kilograms of tea annually.
Samovar Tea will open a new store in San Francisco later this week, with a stripped down tea menu and high tech brewing devices as the main highlights. The company's fourth outlet, located in the Mission District, is designed in a simple, utilitarian style. The tea menu is also understated, offering a single variety of each type of tea and not more than 10 in total, as well as a limited range of scones. However, the store features a cutting-edge brewing system controlled by tablet computers, with customized settings for each tea variety. It also accepts payments in online currency bitcoin. Samovar Tea was launched in 2001 and currently operates 4 retail stores and an online business, employing about 100 people.
Unilever teamed up with a genetics research firm to look into ways of improving tea crops using genomic selection. The owner of Lipton, PG Tips and Brooke Bond tea brands recently launched a pilot project in Kenya that should pave the way for more resilient tea bushes. In the first stage, the project hopes to capture and sequence the broad genetic diversity of the tea bush, otherwise known as camelia sinensis. The second objective is to create a more desirable crop by integrating traits like drought and pest resistance, as well as high yield from individual tea strains. Unilever is the world's leading tea manufacturer and buys on average around 12 percent of global supply, mostly from Kenya and other African countries.
Davids Tea recently hired a coffee veteran in a bid to retaliate against Starbucks-owned Teavana on its home turf in Canada. Sylvain Toutant, who previously was president of coffee distributor Keurig Canada, head of Keurig's UK operations and CEO of coffee distributor Van Houtte, was appointed as president and CEO with immediate effect. The move is seen as a response to a recent announcement by Starbucks to bring the Teavana line of teas into its close to 1,400 Starbucks coffee outlets across Canada. Davids Tea currently operates 127 locations in Canada and the US. The Tea Association of Canada estimates annual grocery tea sales of C$423 million and annual food service tea sales of C$760 million.
Owners of AriZona iced tea are looking for a court to determine the valuation of the company, with very different estimates presented by both sides. John Ferolito's camp says AriZona should be valued at $4 billion, which is how much Tata Global Beverages, Nestlé and Coca-Cola were prepared to pay for the company. Tata and Nestlé are reportedly still interested in purchasing the popular iced tea brand. However, Domenick Vultaggio's side disputes this valuation and claims the company is worth just $426 million. The company and its subsidiaries have 1,000 employees and annual sales of $1 billion.
The American Tea Room, a specialty tea retailer based in Los Angeles, CA, announced plans to open a second retail outlet in downtown Los Angeles' Arts District. The space will feature a tasting room and an oasis garden tea lounge, but will also serve as corporate offices and online headquarters to support its growing online business. According to the CEO, the American Tea Room recently welcomed new investors with significant capital with the aim of expanding the company and the brand. He also hinted at additional locations to open in Los Angeles, Orange County and New York by 2015. The second retail unit will now undergo construction and is expected to open in November.
Since taking a 10% stake in Keurig Green Mountain back in February, Coco-Cola has been carving out a new market for its products thanks to Keurig Cold, a cold beverage maker. Keurig Cold, developed together with Coca-Cola, offers a new channel for Coke's portfolio of soft drinks, iced teas and juices, and represents a valuable added platform at a time when many consumers are turning away from conventional soft drinks. For example, the leader in at-home carbonation market, SodaStream, sold close to 4.4 million soda maker units in 2013. Furthermore, Keurig Cold may benefit from Coca-Cola's global brand appeal to expand its presence internationally, especially with ready-to-drink coffee and tea offerings, which are very popular in Asia.
The Makaibari Tea Estate struck a deal with the organizers of the soccer World Cup in Brazil to serve its tea during the tournament this summer. Players, guests and VIPs will be offered leaves from one of the most famous gardens in Darjeeling, including first flush and Silver Tip teas. Established in 1859 and spanning over 670 hectares, the Makaibari tea estate is also one of the world's oldest tea factories. The products will be supplied through Hampstead Tea, a UK-based company that sources many varieties from the estate. They will be served at cafeterias, VIP and official boxes in stadiums during the World Cup from June 12 to July 13. The Makaibari estate already supplied the 2008 Beijing Olympics with tea from the Darjeeling region of India.
Unilever has big plans for the T2 brand, an Australian premium tea retail chain purchased last year. T2, based in Melbourne, opened its first international location in London just last month, but the parent company is already planning hundreds of outlets in major cities around the world. According to Kevin Havelock, Unilever's president for refreshment, the food and beverage giant sees T2 as a way to introduce tea to a new generation of young urban consumers who are currently more likely to drink coffee. However, T2 is likely to remain a retail chain and its products won't end up on supermarket shelves, where Unilever's Lipton dominates, despite increased competition in the premium tea sector. T2 currently operates 40 tea shops in Australia. Last year's turnover was $57 million.
Herbert Hyman, who founded The Coffee Bean & Tea Leaf company with his wife more than 40 years ago, passed away recently at the age of 82. Hyman was instrumental in broadening the understanding and popularity of gourmet coffee in the US, along with Alfred H. Peet, who founded Peet's Coffee and Tea. They paved the way for the US coffee revolution and companies such as Starbucks that followed. Jim Stewart, who started Seattle's Best Coffee after learning to roast at the original Coffee Bean location, described Hyman as a "grandfather of specialty coffee in the US". The company currently operates over 900 locations in 29 countries.
The third Teavana Fine Teas + Tea Bar opens for business this week in Chicago, IL. Teavana, owned and operated by Starbucks, is admittedly taking its time perfecting the concept of a high-end tea store and bar before a nationwide rollout. The store opening in Chicago pits Teavana against local tea retail chain Argo Tea, which has 16 locations in the area, as well as Adagio Teas and DavidsTea, which have 3 outlets each in and around Chicago. Industry experts say the US tea market is ripe for a revolution, with most tea shops operated as small businesses and only several independent chains throughout the country. Hundreds of Teavana locations are expected to pop up in the years ahead, with at least two more announced for this year: a second one in New York City and one in Los Angeles.
Rainy weather across parts of Britain turned out to benefit the Tregothnan Estate, UK's only tea plantation located on the Atlantic coast in Cornwall, which expects record output this year. The floods, gales and driving rain that wreaked havoc across the UK this winter have actually generated ideal tea growing conditions with plenty of humidity, according to the garden director. Tregothnan harvested over 10 tons of tea last year from around 16,000 tea bushes and expects to easily outdo the quantity this year. The plantation produces 26 different varieties, some of which are exported to Asia.
Honest Tea, a premium iced tea brand owned by Coca-Cola, racked up $112 million in sales last year, taking advantage of a wide distribution network and product diversification. Sales jumped by 27% compared to 2012, with sustained growth of its PET products and a 56 percent leap in sales of its Honest Kids juice pouches. The company also announced a new line of multi-serve soft drinks developed in coordination with Whole Foods. The "Refresher" range of 5 lemonades and limeades, available from this month in Whole Foods nationwide, will also feature an updated company logo, which will be rolled out across other ranges in the next couple of years.
Peet's Coffee & Tea set its sights on DC in 2014 with a store opening this week in Washington. The 1,380-square-foot store, which used to house Caribou Coffee, will serve as the brand's flagship in Washington, with 22 additional stores to open in the months ahead. Most of them will occupy previous Caribou Coffee locations, which the parent company, Jon. A. Benckiser, purchased in a deal worth $340 million in 2012. According to the company, the goal for the new store is to create a familiar and intuitive space, while differentiating itself from national chains. Peet's, which currently operates 233 cafes, plans to open at least 60 more in 2014.
Cooper Tea, a Louisville-based iced tea manufacturer, is reportedly raising investment funds towards a range of ready-to-drink teas and lemonades. These would be sold under the Third Street brand, a company that Cooper Tea merged with back in 2011. The project consists of 9 varieties of teas and lemonades that were requested by Whole Foods because of their organic and Fair Trade ingredients. According to a regulatory filing with the SEC, so far the firm has raised at least $300,000 of a planned $1.5 million equity capital round. The company founder says this was a "friends and family" round from existing shareholders and new investors.
Capital Teas, a specialty tea retailer based in Annapolis, MD, secured a $5 million investment from Pear Tree Partners. The funds will be used to expand the number of retail locations, grow online sales and increase wholesale business to local hotels and restaurants. Capital Teas currently operates 6 outlets and expects to open 6 more this year. The company plans to develop the concept of tea bar boutique, where customers can drink hot tea and nibble snacks while browsing newspapers or surfing the web. The couple that founded the company in 2007 will retain control of Capital Teas and hopes the company will become profitable this year.
Keurig Green Mountain, formerly known as Green Mountain Coffee Roasters, is undergoing important changes to stay ahead of the rapidly expanding single-cup category. Beyond name change, the company recently announced a new manufacturing and distribution partnership with Peet's Coffee & Tea and thereby dumped Starbucks as its sole provider of specialty coffee in K-cups. Following Coca-Cola's $1.25 billion purchase of a 10% stake in the company earlier this year, Keurig Green Mountain is reportedly working on a cold beverage dispensing system dubbed Keurig Cold to integrate Coke's portfolio of carbonated beverages. The company also plans to introduce a next-generation capsule brewer in fall.
Harney & Sons Fine Teas marks 30 years and celebrates three generations in the specialty tea industry. The company went from a small operation in John Harney's basement to a fully-fledged tea manufacturer that currently offers over 300 varieties and employs more than 170 people. To mark the anniversary, the family-owned company launched a special blend in honor of their founder, combining some of his favorite varieties. Earlier this year, Harney & Sons introduced a range of specialty teas in individual serving capsules. The company's blending and packaging facilities are headquartered in Millerton, NY. Harney & Sons Fine Teas also operates two tearooms in the state.
McLeod Russel, the world's largest black tea producer, is set to enter the green tea market by acquiring a tea processing factory in Vietnam. This marks an important strategic shift for the tea giant, traditionally centered on black tea production, particularly in the region of Assam in India. While black tea is popular in the West, many Asian countries predominantly consume green tea, which also fetches higher prices compared to black tea. That said, green tea prices are sensitive to the quality of the leaves and processing. According to the company, the new site, which cost $820,000 to acquire, will only serve to process green leaves, with production to follow in the future.
Keurig maker Green Mountain Coffee Roasters plans to make its new range of single-serve machines work exclusively with own licensed pods. Court documents reveal that Keurig is seeking to secure the lucrative refill market via a DRM-style technique in a similar fashion to printer manufacturers. This follows the Keurig K-Cup pod patent expiration in 2013, which opened the doors for other manufacturers to produce their own pods. While the technology behind the new DRM-like feature remains under wraps, the move is seen as a work around for the expired patent and is likely to be in place by 2015. The lawsuit, filed by TreeHouse Foods, also alleges that the company has been brokering exclusionary agreements with its suppliers to try to block third-party manufacturers from the market.
Tata Global Beverages, owners of Tetley supermarket tea brand, responded to allegations that one of its Assam plantations pays workers below minimum wage. A documentary by The Guardian newspaper claims that such conditions have created a breeding ground for the slave trade. Tata pushed back saying that tea pickers' wages are set not by a single plantation, but by an industry-wide wage settlement, involving the government, the workers' union and the tea association. The company also insists that free accommodation and schooling makes up the lower wages and that it has never used that Assam plantation to source tea for any of its brands. The World Bank, a minority investor in the plantation, is currently investigating the on-site working conditions.
The new advertising campaign for Lipton tea, launched during the Academy Awards ceremony, combines hot and iced categories under a single global positioning. For the first time, Unilever's hot and iced tea brands are united in a single multi-million dollar brand campaign, headlined by the characters from Muppets. Under the "be more tea" slogan, the ads aim to give the brand a playful, fun and irreverent tone, instilling a more relaxed, zen-like attitude to daily life. The global revamp is expected to cost more than $40 million, roughly double what Unilever spent last year. It is in line with the wider overhaul of how Unilever plans to market its global brands in the future, with a bigger focus on targeted digital platforms.
Fourth quarter results from Coca-Cola confirm the continuing decline of its core soft drinks market and highlight a solid performance by its portfolio of ready-to-drink tea brands. Subdued demand for sugary soft drinks and adverse currency translations resulted in a 4% dip in net revenue for the quarter and 2% for the full year. However, the company's RTD tea line-up bucked the trend and recorded an impressive 11% growth for the year, lead by brands such as Gold Peak, Honest Tea and Fuze Tea. The numbers reflect solid growth in the broader ready-to-drink tea market in the US, which is expected to generate sales of $5.3 billion in 2014 and grow by an annual rate of 6% until 2018.
Peet's Coffee & Tea announced the opening of its new flagship store in San Francisco. The 2,500-square-foot store features plenty of natural materials and a bar designed to highlight how the beverages are made. The contemporary and minimalist design is intended to reflect its North Californian roots and a new brand identity for the locations of the coffee chain, which was acquired by a private investment fund in 2012. The flagship venue will also serve as a blueprint for other stores across the US, starting with Washington DC, where Peet's plans to roll out a set of new stores this spring.
The Specialty Food Association selected Ron Rubin of The Republic of Tea as the winner of 2014 Leadership Award. Rubin was chosen from 66 nominees for going "above and beyond" in advancing food standards in society and society itself by creating social, economic and environmental impact through innovation and vision. He purchased The Republic of Tea in 1994, which now offers over 300 varieties of loose teas and has been named one of the "Best Places to Work" by Outside Magazine two years in a row. The Republic of Tea and Ron Rubin himself support organizations such as Susan G. Komen for the Cure, the Prostate Cancer Foundation, Action to Hunger, Room to Read, Sunny Hills Services and The Ethical Tea Partnership.
Reily Foods announced the acquisition of the New England Tea & Coffee, one of the country's largest independent coffee roasters. New England Tea & Coffee, based in Malden, MA, is New England's largest independent coffee roaster and manufactures bagged coffees, flavored coffees and single serve cups. The company, founded in 1916, employs more than 200 people and its beverages are brewed in over 5,000 foodservice locations across the US. While the terms of the deal were not disclosed, New England Tea & Coffee is expected to continue all production and distribution activities as usual. The company will complement Reily Foods' portfolio of coffee and tea brands that include Luzianne Coffee, Luzianne Tea, French Market Coffee, CDM Coffee, and JFG Coffee.
ITO EN, the manufacturer of TEA'S TEA iced teas, started the New Year with a promotion that helps consumers keep their New Year's resolutions by giving away physical activity trackers. The Get Your Bits Fit campaign offers wireless wearable devices that sync to smartphones or computers to track physical activity stats, helping motivate daily fitness goals. The winter promotion rewards 31 daily winners on the company's Facebook page. ITO EN hopes to thereby raise awareness about its line of bottled teas that includes unsweetened and slightly sweetened varieties. The company recently slimmed down the packaging of its ready-to-drink beverage bottles to 18.7 grams, compared to the industry standard of 24 grams.
The Coffee Bean and Tea Leaf, a California-based coffee chain, appointed former Dunkin' Brands and McDonald's executive John Dawson as president and chief executive. Dawson replaces Mel Elias, who was president and CEO since 2008, and has been with the company since it opened its first franchise locations in Singapore in 1996. Under Dawson, Coffee Bean and Tea Leaf is expected to add to its lineup of more than 900 stores in nearly 30 countries, including more than 300 in the US. The management change comes after three private-equity firms acquired a significant stake in The Coffee Bean and Tea Leaf in September 2013. One of the firms is represented by Will Kussell, former president and chief brand officer of Dunkin’ Donuts.
ITO EN's latest innovation is a line of ready-to-drink coffee drinks sold under the Jay Street Coffee brand. The bottled drinks are fresh brewed from Arabica coffee beans and contain milk from dairy herds not treated with rBST. Flavors include mocha, latte and vanilla. ITON EN's office location in Jay Street in Brooklyn, New York served as inspiration for the brand name and packaging design elements. According to the company, ready-to-drink coffee was a natural product extension given its expertise in bottling freshly brewed teas. Another appealing reason is the category's 20% annual growth rate. Jay Street Coffee drinks will be available nationwide with a suggested retail price of $2.49.
Typhoo Tea, a supermarket tea brand from the UK, reportedly planned to rely on fake customer complaints to lobby retailers that did not stock their teas. The tea company contracted Intelligent Marketing Solutions, a marketing firm, to hire field workers to pose as disgruntled customers in a bid to increase product shelf space. Workers were asked to contact Sainsbury's, one of UK's largest supermarket chains, and ask why the supermarket did not stock the brand in specific stores and whether it would be restocked. The marketing firm was prepared to pay £1.50 per call and £2.50 per email, and planned to rely on social media to complement the effort. Following the report in the Sunday Times, the campaign was suddenly suspended. Typhoo Tea has likely been pushed out of supermarket shelves in part due to the success of supermarket own-brand teas.
Last week, Starbucks premiered the new concept of Teavana tea bar and store on the West Coast, in its hometown of Seattle. Teavana Fine Teas + Tea Bar, located in University Village, is Teavana's second tea bar after a similar one debuted in New York City a few weeks ago. The new outlet is a combination of a teashop and a tea bar, which is a departure from Teavana's previous retail-only model ubiquitous in shopping malls. The bar replaces Starbucks' own short-lived Tazo Tea store, which was already in the works when the coffee giant purchased Teavana last year. According to the company, the Tazo brand will continue to be used for packaged tea in supermarkets and Starbucks cafes. As for Teavana, there could be as many as a thousand new tea bars and stores opening in the years ahead. At the moment, Starbucks plans to own all of its new tea locations.
A Japanese green tea manufacturer with a history stretching back 300 years opened its first overseas outlet in New York City. Hailing from Kyoto, the former capital of Japan, Ippodo specializes in artisanal green tea from Kyoto and the surrounding area. Some of the teas on sale include Sencha, Bancha, powdered Matcha and Gyokuro, the latter one available in many grades, including the finest variety called Tenka-ichi, with a $91 price tag for a 50-gram bag. A range of traditional tea accessories and matcha kits complements the tea range. Product demos, tea tastings and a take-way service are all part of this authentic Japanese tea experience. Expert staff are flown in from Kyoto to help customers discover the culture of Japanese tea. Ippodo is co-located with a Japanese restaurant in a townhouse in Murray Hill. The company operates dozens of outlets throughout Japan.
Honest Tea is facing a class action lawsuit in California over antioxidant content claims on product packaging. The lawsuit alleges that Honey Green Tea iced tea contains a quarter less antioxidants than claimed on the label and is thereby misleading consumers. Laboratory tests on plaintiff's behalf found an average of 187 mg of antioxidants per bottle, compared to 247 mg highlighted on the label. The plaintiff claims to have been misled in purchasing the product based on overstated antioxidant levels and would have opted for green tea in loose form or teabags instead.
Dilmah Tea, founded 25 years ago, has become one of the biggest names in the tea business, especially in Sri Lanka. It is currently ranked among the world's top 10 tea brands and is the third largest exporter of tea in Sri Lanka, a country where tea is mainly exported as a commodity. According to Dilhan Fernando, the founder's son, commoditization of tea is the source of hardship and inequality in tea producing countries: the value is created in countries where the tea is sold, not where it is grown. Looking back, one of the keys to Dilmah's success was focusing on branded single-origin tea, instead of tea that is mixed and sold in bulk. This mission is alive and well to this day, as the company looks to reposition itself from mass to gourmet market and continue to create added value at home. Fernando also credits the format of family business as a means to ensure sustainability and responsibility in the industry.
As Teavana opened the first tea bar in New York City last week and announced nationwide expansion plans, lost in the headlines were its ambitions for Canada, a country whose tea market has been growing steadily. Teavana already operates more than 50 outlets in Canada. Next year, the company plans a significant push from retail stores in shopping malls to tea bars in urban centers. According to a government agency, Canada's tea consumption is expected to rise 40% by 2020 driven by increasing health awareness. The brew is already the fifth most popular beverage, with nearly 10 billion cups drunk each year. Differently than the US, Canada is a hot tea drinking nation, mainly due to its British heritage. This represents a big opportunity for companies like Teavana or Davids Tea that specialize in loose leaf teas. Furthermore, the country has shown a willingness to embrace flavored teas and experiment with alcohol-infused mixes.
Celestial Seasonings announced a new promotional sampling campaign allowing tea drinkers to send a tea sample to a friend or relative. The "From Me To You" promotion offers 25,000 fans a chance to request a delivery of seasonal teas to a special someone anywhere in the country. The company is thereby promoting its line of Christmas-themed teas, with blends featuring gingerbread, sugar cookies and candy cane flavors. The campaign will run via a dedicated Facebook app and with the help of partnering bloggers. 1,500 samples will be made available each day. The promotion runs until November 18th.
David Ziegert is to become the new president of Celestial Seasonings, as the company tries to maintain a leadership position in the herbal tea market, while continuing to develop the brand in other areas. David Ziegert, a 19-year veteran of the Boulder tea company, replaces Peter Burns, Celestial Seasonings' president of the past five years, who refocused the company on its core business and advanced product innovation and design during his tenure. Under his supervision, the company branched out into ready-to-drink beverages, energy shots and K-Cups, and added many new flavors to the herbal tea range. Ziegert is likely to continue in this direction, working on new product development and acquisitions. Hain, the parent company of Celestial Seasonings, reported a net income of $114 million on $1.7 billion revenue during the last fiscal year.
Starbucks picked New York City for its first Teavana tea bar, as the coffee behemoth seeks to transpose its success onto the tea market after acquiring Teavana for $620 million last year. Teavana Fine Teas + Teavana Tea Bar, located in Manhattan's Upper East Side, aspires to have a "zen-like" atmosphere and will serve snacks, sweets and flatbreads next to a wide variety of loose teas. According to the company's CEO, Teavana is expected to open 1,000 such bars in the next five years. Also, Starbucks is not concerned about cannibalization between both businesses, because most tea drinkers do not cross over to coffee. The company may slowly add tea bars to existing Teavana locations and is likely to expand internationally while growing the business in the US.
Tea2Go, a Texas-based startup tea supplier, is looking to diversify into tea retail thanks to a network of company-owned stores and franchises. Founded just a year ago, Tea2Go started out by supplying stevia-sweetened flavored teas to restaurants. Now, the company is opening several company-owned stores and expects many franchises to join ranks in the months ahead. According to Tea2Go, contracts are signed with 47 franchises across the country. The stores feature up to 120 tea blends that can be purchased loose for home brewing and a counter that serves beverages. Some locations will have children’s areas and laptop lounges.
Hilton Garden Inn announced a deal to have all rooms in the US and Canada equipped with Keurig single-serve machines. In partnership with Green Mountain Coffee Roasters, the coffee, tea and beverage offering in over 73,000 guest rooms will be upgraded to meet the requirements of frequent travellers. In a recent survey, high-frequency travellers cited in-room coffee as the second most important amenity, behind only WiFi, and 78% considered it important. Guests in the US will be offered four complimentary K-Cup packs: two Diedrichs Regular Coffee, one Diedrichs Decaffeinated Coffee and one Bigelow Black Tea. Additional single-serve packs will be available for purchase in the lobby area.
TEAloe, a start-up iced tea manufacturer, scooped this year's top prize in the Best Ready-To-Drink Tea category at the international Beverage Innovation Awards. It was the third award this year for TEAloe, a tea industry newcomer that was already crowned with top honors at the North American Tea Championship. TEAloe is a combination of organic, fair-trade green tea and bits of organic aloe vera. It was singled out from over 370 entries from 40 countries around the world, which were divided into 29 categories. TEAloe is available in four flavors: Original, Peach, Passion Fruit and the award-winning Mint. It can be purchased in Safeway, The Fresh Market and select Whole Foods.
Caribou Coffee locations in Pittsburgh, PA are the latest example of the ongoing transition from Caribou to Peet's Coffee and Tea brands. Four Caribou stores will close imminently and reopen as Peet's in a few weeks' time. They are part of 88 nationwide stores that will be rebranded through 2014. That's on top of 80 locations that recently shut down. Following the shakeup, more than 610 Caribou Coffee stores will still remain open, with almost half of them in Minnesota, where the company was founded more than 20 years ago. A German investment firm purchased both Caribou and Peet's within the last 12 months.
Three private-equity firms acquired a significant equity stake in The Coffee Bean & Tea Leaf, a premium coffee and tea retailer. Investors include US-based Advent International, as well as CDIB Capital and Mirae Asset Private Equity from Hong-Kong. The Coffee Bean & Tea Leaf is one of the world's largest independent and privately owned coffee and tea retailers, with over 900 locations in 30 countries and a particularly strong presence in Asia. For example, the company operates about 250 locations in South Korea alone, and has been expanding aggressively in China, India, Indonesia, Malaysia, Singapore and Vietnam. According to the company's CEO, there is still significant growth potential in the US and Asia, as The Coffee Bean & Tea Leaf plans to add more company and franchisee-owned stores. The terms of the transaction were not disclosed.
New Zealand's oolong tea manufacturer Zealong Tea recently sold its original tea farm in order to distance itself from a feud with the neighbors. The complaints stem from Zealong's one-time use of a helicopter to combat frost damage during harvest. Since the company did not get a green light from local authorities to use the helicopter again this year, it decided to get rid of the property rather than put future harvests at risk. The residential-zoned plantation, established 8 years ago, produces 4 tons of leaves per year, worth $2 million. Zealong will now concentrate on developing its big tea farm and tourist attraction at a nearby rural town of Gordonton. A local residential property developer purchased the 11-hectare land.
Unilever has signed an agreement to purchase T2, a specialty tea retailer in Australia. The deal is seen as a means for Unilever, which operates Lipton and Bushells brands down under, to get a foothold in Australia's premium tea market. Founded in 1996, T2 had a rough start with its business model centered around tea retail experience, as it failed to secure access to bank finance and did not turn a profit for four years. The company currently operates over 40 locations across the continent. It generated double-digit growth and sales of $52 million in the 12 months ending 30 June 2013. Both companies expect to capitalize on benefits of scale and shared tea category expertise. Financial details of the deal were not disclosed.
Tempest in a Teapot, a small tea company from Stonington, ME, will feature its products in celebrity gift bags at the Emmys next month. The company's blends were discovered through an online directory of 1700 products manufactured in Maine. Tempest in a Teapot offers a range of traditional teas mixed with local herbs such as rugosa rose hips. News came as a surprise to the very small company owned by two stay-at-home moms and started on $500 a year and a half ago. The owners will rely on friends and neighbors to prepare 80 gift boxes made up of two undisclosed varieties. They plan to launch a new line of teas to coincide with the event.
A federal judge in California dismissed a class action lawsuit claiming that Tetley misled consumers about the health benefits of tea. The lawsuit against Tetley USA, part of Tata Global Beverages group, centered around antioxidant, nutrient content and health claims made on the website and packaging. It alleged that claims such as "natural source of antioxidants" were illegal under the Food Drug & Cosmetic Act as adopted in California law. Furthermore, antioxidant content claims were said to be unlawful, because they failed to comply with Recommended Daily Intake guidelines, which are actually not even set for antioxidants. The judge threw out the lawsuit because it failed to properly define the list of Tetley products in question, but gave attorneys fifteen days to amend the complaint.
Coca-Cola abandoned a significant legal challenge against an Australian tea company that sells its products under Honest Tea trademark. The brand was trademarked in Australia in 2005 to sell a range of iced teas and loose leaf teas. According to the manager of the local tea company, the legal challenge took its toll on the business, citing difficulties in recruiting workers and finding new distributors. The Guardian article also claims that Coca-Cola hired a private investigator to examine the business and whether the trademark was being actively used. The withdrawal of the lawsuit is seen as a victory for small business against legal bullying from large multinationals. Coca-Cola already challenged the trademark in 2011, when it acquired the US-based Honest Tea. Previous to that, the US-based Honest Tea also unsuccessfully challenged the trademark back in 2007.
Some of UK's biggest tea companies hope to reverse decreasing sales by focusing on young drinkers and niche growth markets. The explosion of coffee chains and the emergence of healthier soft drinks are causing a slow, yet steady decline of traditional tea in the UK. Also, shoppers have warmed up to specialty tea and are increasingly embracing new types of tea, such as green and herbal. PG Tips, Tetley, Twinings and Yorkshire Tea are all adjusting their marketing efforts to these new market realities. The companies now focus on recruiting new and younger drinkers that have a more open-minded approach to tea. Reflecting this trend, an increasing part of advertising and marketing is channeled through digital media.
Following strong quarterly results, Starbucks reaffirmed its commitment to expand aggressively in tea-drinking countries like China. Despite tea being deeply embedded in many Asian countries, the coffee giant posted a 30% revenue growth in the Asia-Pacific region and very strong sales volumes in China, where it has been expanding in second-tier cities such as Dalian and Hangzhou. Starbucks will open its thousandth store in China later on this year and the Asian country is set overtake Canada to become its second-largest market in 2014. According to Euromonitor, overall coffee sales grew 10% in China over the last 5 years, well ahead of neighboring big markets and global growth average. That said, coffee maintains less than 1% of the country’s hot-drink market share, whereas tea has 54%.
Peet's Coffee & Tea, a specialty tea and coffee company from California, announced its biggest retail expansion in the company's 47-year history. With the opening of a store in Solon, OH, Peet's is embarking on a huge growth plan in the Midwest and the East Coast, which will see more than 90 new stores open over the next 18 months. 10 stores will open in Cleveland, OH in former Caribou Coffee locations and 8 in Columbus, OH throughout the next couple of months. Later this year, more openings are expected in Pennsylvania and Michigan. In 2014, stores will continue to pop up across the Midwest and the East Coast. A German investment group purchased Peet's Coffee & Tea for about $1 billion last year and later added Caribou Coffee for $340 million.
The Republic of Tea was named to Outside Magazine's "Best Places to Work" 2013 list for a second year. The company came in at number 70 and was the only specialty tea company to be featured. The project rates US companies for setting a high standard for work-life balance by evaluating benefits, compensation, policies, job satisfaction, environmental initiatives and community outreach programs. The Republic of Tea offers employees paid time off for volunteering, profit sharing, a scholarship program, childcare credit and yearly trips to tea producing countries. The company also has an employee health program, which includes credits towards gym memberships, nutritionist counseling and yoga classes.
Argo Tea recently opened a cafe in a newly restored park in its hometown of Chicago. The greenhouse-inspired cafe features sustainable elements, including recyclable packaging, native landscaping with drought-tolerant plant varieties and natural irrigation, and wind energy power from the purchase of renewable energy credits. Argo Tea worked together with city authorities to restore and revitalize the park. The company currently operates 27 cafes in the US and abroad, with more than 15 locations scheduled to open in the next 12 months.
Rishi Tea plans to tap several funding sources to help finance its proposed new headquarters in Milwaukee, WI. The company, which blends, packages and distributes specialty teas, is seeking $1.86 million from the Milwaukee Economic Development Corp., a city-affiliated lender, to pay for the $4.7 million project. Remaining funding is expected to come in the form of a loan from a regional bank, as well as from equity financing. The new headquarters, located on a 3.8-acre site at a city-owned business park, would feature a 48,000-square-foot facility with office, production and storage space. Rishi Tea hopes the new headquarters will help sustain its annual growth of approximately 10%. The company currently employs 46 people and plans add 20 more over the next few years.
UK tea and confectionary business Bettys and Taylors Group, owner of Taylors of Harrogate tea and coffee brand and six Betty's Café tea rooms, announced profits equaling £10 million ($14.8 million) for the first time in company's history. Pre-tax profit grew by £2.2m to £10m, while turnover rose by 14 percent to £133.2m in the year to October 31, 2012. Strong sales across both businesses contributed to these record results. In 2012, the group also gave 1,293 employees the equivalent of an additional six weeks' pay through the group profit share scheme, which has been operating for 30 years.
According to an internal report by Coca-Cola's main bottler in Europe, the company is looking for ways to get people to swap tea and coffee for soft drinks at the breakfast table. One of the five growth strategies for the UK and Europe, called "Complete the Meal", notes that breakfast is often referred to as the most important meal of the day and is accompanied by a quarter of daily beverage intake. Amidst dwindling soft drink sales, the beverage giant is looking for ways to motivate people to make juices, smoothies and other soft drinks part of the morning ritual, similar to tea and coffee. Other strategies presented in the "See the Opportunity" report include diversifying into relaxation drinks and highlighting other occasions to consume soft drinks during the day.
Speaking at the Jeffries Global Consumer Conference in Nantucket, Troy Alstead, chief financial officer and chief administrative officer for Starbucks, set out the company's vision for the newly acquired tea retailer. The company is likely to adopt a dual approach with Teavana. First, it plans to expand the number of stand-alone stores starting this fall. Second, it will widen the availability of Teavana's products in Starbucks stores, thereby creating another occasion to visit them. Because tea is usually consumed at a different time of the day than coffee, it should attract visitors in the afternoon, evening and on weekends, when coffee consumption is relatively low. Tea aside, Starbucks' focus will also shift to food items purchased with beverages, such as lunch and afternoon snacks, as Alstead conceded that food quality had previously fallen short of customer expectations.
VMG Partners, a private equity investment firm specializing in branded consumer products, is looking to sells its stake in Mighty Leaf Tea Co. William Blair & Co, an investment bank, was hired to handle the sale process and seek strategic buyers for the specialty tea manufacturer. Mighty Leaf supplies premium teas to hotels, restaurants and specialty retailers. VMG Partners purchased a roughly 20% stake in Mighty Leaf in 2007 for an undisclosed amount. At the time, annual revenue was approximately $15 million. Current annual revenue is estimated at $40 million. The move is part of a broader push by VMG Partners to divest from an investment fund focused on consumer food and beverage brands.
The CEO of Honest Tea expects sales to exceed $100 million this year thanks to wide distribution network of The Coca-Cola Co, its parent company. Seth Goldman also attributes growing nationwide awareness and availability of healthier, organic and Fair Trade beverages to Coke's investment in the company back in 2007. The vast distribution reach enabled Honest Tea to increase the number of sales outlets from 15,000 to 100,000 in 5 years, which helped bring organic and Fair Trade products into the US mainstream. According to Goldman, suppliers and producing communities also feel these positive results, with Honest Tea purchasing over 6 million pounds of organic ingredients this year, almost ten times more than before Coke's investment.
A federal court in California allowed a class action lawsuit against Twinings to proceed, albeit partially. The lawsuit, filed just over a year ago, alleges that Twinings, owned by Associated British Foods, broke the law by labeling green, black, white and red teas as a "natural source of antioxidants". However, the court dismissed claims related to red tea, also known as rooibos, because it comes from a different plant than real tea. But the court allowed the plaintiff to add to her complaint numerous products that she did not actually buy, but that made the same claims. In the latest twist, the parties agreed on mediation with the possibility of settling the dispute out of court.
Steeped Tea, a direct sales tea company from Canada, is looking to replicate its success story in the US. Launched six years ago, Steeped Tea grew five-fold since appearing on a reality TV program to secure venture capital funding late last year. The company currently relies on 2,500 consultants for direct sales of loose leaf tea in Canada. Last month, Steeped Tea quietly started expanding its operations in the US by recruiting almost 60 consultants acting as direct sellers. But the company does not plan to stop there: 10,000 US-based consultants are expected to join the ranks in the next three years. Steeped Tea presently employs 46 warehouse and office staff, although its workforce is set to grow to 70 in the months ahead.
Despite an arduous litigation process that resulted in ownership and management changes at its parent company, Yogi Tea has manged to sustain growth. The ownership of the company, founded by the late Yogi Bhajan, was returned to the Sikh community following a court ruling back in 2011. Having initially built distribution through natural food stores, Yogi Tea has recently been successfully expanding into grocery stores. According to court documents, Yogi Tea had sales of $27 million in 2009 and currently has a 4% share of the US bagged and loose tea market. Revenue is now equally split between the US and Europe. However, the company remains involved in a trademark infringement lawsuit filed by Yogi Bhajan's widow.
Leonard Marsh, one of the three founders of Snapple, recently passed away on Long Island, NY. Marsh started his career as a window washer and founded Unadulterated Food Products, the precursor to Snapple Beverage Corporation, with his brother-in-law and a childhood friend in 1972. A part-time venture turned into a beverage empire thanks to a wide offer of more healthful drink options, such as fruit juices and iced teas. After the Quaker Oats Company purchased Snapple for $1.7 billion in 1994, Marsh stayed on for a few years as executive vice president for planning. The Dr Pepper Snapple Group now owns the company, which currently manufactures juices, fruit punches, teas and other beverages.
Tregothnan Estate is seeing its efforts to grow tea in an unexpected place pay off, as Britain's only tea plantation makes inroads in the UK and abroad. The idea to grow tea was born when the estate manager noticed a flower, originally from north India, bloom earlier in the special microclimate of the farm than in India. Since 2005, Tregothnan Estate expanded tea plantations by 6,000 bushes annually. This year's tea harvest is expected to come in at about 10 tons and produce 35 distinct varieties. The company enjoys a growing following at home, as Brits continue to transition from traditional "builder's tea" to herbal, green and specialty teas. More recently, these exclusive British teas caught the eye of Chinese tea connoisseurs and the company now plans to open a teashop in Shanghai by November, followed by a chain of teahouses in the UK.
In a bid to consolidate pricing and product strategies across 26 stores, Argo Tea now relies on network-enabled digital signage boards. The company installed 78 digital menu boards, manufactured by BrightSign, that allow to remotely update their content from its headquarters in Chicago. The process enables a centralized control of prices, product images, promotions and calorie count on menu boards across locations in Chicago, New York City, St. Louis, Boston, Beirut and Abu Dhabi. If needed, the system can divide stores into groups to offer customized content according to region. It also offers the possibility to automatically change the menus displayed during the course of the day.
The Queens' Tea, a Utah-based manufacturer of specialty teas, created a crowdsourced fundraising campaign in an effort to support the opening of its first retail location. The company is seeking to gather $20,000 on RocketHub to finance its foray into brick and mortar. According to the description, funds will be used for a variety of projects associated with business expansion. They will help transition into a new physical location, secure a larger commercial kitchen space and purchase refrigeration and packaging equipment. The Queen's Tea plans to open its first outlet in Salt Lake City, UT.
Teatulia Organic Teas announced that its tea garden in Bangladesh achieved Rainforest Alliance certification. The Rainforest Alliance is an international nonprofit organization that works to conserve biodiversity, develop standards for sustainability and improve worker welfare. The tea plantation is the first one in Bangladesh to obtain this certification. The Teatulia Cooperative, which produces over 700,000 pounds of tea and herbs per year, now requires that all farm workers be trained in good agricultural practices in accordance with Rainforest Alliance standards. According to the company, this underscores its continued commitment to environmental and social stewardship.
In response to sluggish sales in Europe and the US, Unilever announced plans to increase the stake in its Indian subsidiary by $5.4 billion. The Anglo-Dutch consumer goods giant and manufacturer of Lipton tea is seeking greater control over local operations and would own 75% of Hindustan Unilever, compared to 52% now. The move comes as growth slowed markedly in North America and Europe, the latter having recorded the slowest quarterly growth in two years. Hindustan Unilever, which owns a third of India's consumer goods market, is expected to benefit from India's growing economy, company's expansion into rural areas and lower raw material prices. Its market share is projected to increase to 44 percent, or $14.2bn, by 2017. The acquisition is the company's biggest since its 2000 purchase of Best Foods for $23bn.
Unilever, owner of Lipton tea brand, has filed an international patent for a system to extract juice from tealeaves. The company claims that tea juice benefits from improved taste and color, as well as higher polyphenol content compared to brewed leaves. In Lipton's case, it may be used in iced teas or for various types of concentrates. The patent describes a process where the leaves are withered and crushed after plucking to cut moisture content and liberate enzymes. Then, they are heated to a temperature of between 40 and 77 degree Celsius and pressed for a period ranging from 30 seconds to five minutes. The result is 100 to 200 milliliters of tea juice from a kilogram of green, black or oolong tealeaves. The remaining leaves can still be used to manufacture conventional tea products.
According to a report by a security expert, Teavana may have suffered a severe data breach that compromised clients' credit and debit card information. Multiple sources in law enforcement and the financial community cite fraud rates indicative of a data breach coming from many, if not all of its 280 locations nationwide. A likely scenario is that hackers gathered customer credit card information using malicious software installed on point-of-sale devices at the register. One debit and credit card issuer was alerted about this more than a month ago following a spike in fraudulent charges from counterfeit cards that were used to purchase expensive gift cards. A spokesperson for Teavana said that the company does not comment on ongoing investigations.
Caribou Coffee announced plans to shed a significant part of its underperforming locations and rebrand many others. The Minneapolis-based coffee company will effectively pull out of Ohio, Illinois, Michigan, Pennsylvania, Maryland, Virginia and Georgia by closing 80 stores over the coming days. Further 88 locations will be converted to Peet's Coffee & Tea brand in the next 12 to 18 months. After the downsizing exercise, Caribou Coffee is expected to have 468 locations in Minnesota, North Dakota, South Dakota, Western Wisconsin, Iowa, Kansas, North Carolina, Colorado and 10 international markets. The company was taken private this year in a $340 million deal with Joh. A. Benckiser, a German investment firm that purchased Peet's Tea & Coffee for $947 million last year.
A young entrepreneur, who graduated from the university just a couple of years ago, is celebrating the opening of her tea company's first in-store concession. The Teashed, a design-led tea, teaware and homeware company based in the UK, was set up after Jules Quinn graduated with a degree in fashion marketing in 2011. The project was developed with the help of her university's graduate enterprise program. Since then, the Teashed established a presence online and its products are already stocked in several department stores across the country. Now, the company is getting ready to open its first pop-up stand in a large department store in northern England. After that, the company plans to launch a chain of pop-up shops and has its sights on becoming the leading specialty tea retailer in the UK.
JAB, a group led by Joh. A. Benckiser is in talks to acquire coffee and tea manufacturer DE Master Blenders for $9.7 billion. The Amsterdam-based DE Master Blenders is the coffee and tea branch spun off by Sara Lee Corp. in 2012 and owns Pickwick and Tea Forté tea brands. The offer, subject to a financial review, is in an early stage and values the company at a 33% premium to the closing price of the previous day. Master Blenders would become the latest addition to the growing portfolio of JAB's tea and coffee investments, which include recent purchases of Peet’s Coffee & Tea Inc. for about $1 billion and Caribou Coffee Co. for $340 million. There is speculation that JAB submitted the offer for Master Blenders in response to interest from AB InBev, the world's largest beer brewer.
Teasenz, a new online venture, enables direct trade between farmers and consumers. Based in Hong Kong, Teasenz hopes to capitalize on consumers' pursuit of fresh premium teas at affordable cost. Instead of shipping large quantities of leaves overseas for reprocessing and packaging, the teas are individually packed in China and are sent directly to the consumer. According to the company, this reduces the cost of tea by up to 70% compared to a local tea store. White and green teas are the most prone to losing flavor due to bulk shipping, so the company sources them directly from farmers in Chinese tea regions such as the West Lake area near Hangzhou and packages them immediately into tea pouches.
Unilever, the parent company of Lipton Tea, unveiled plans to invest $96 million in upgrading its manufacturing operations in Suffolk, VA. The facility, which was set up 58 years ago and currently employs 300 people, produces the majority of Lipton's teabags sold in North America. The five-year investment program will focus on facility upgrades and new production machinery. Virginia had fought to have the project retained at Suffolk, competing with Kentucky, North Carolina and South Carolina. A $1 million performance-based grant from the Virginia Investment Program was approved by the state. Lipton's Suffolk factory is the largest tea production plant in the US.
Two young entrepreneurs have launched a brand of kava tea drinks thanks to a food business incubator in Long Island City, NY. The beverage line is based on the kava root, a plant found in the Pacific and believed to relieve stress thanks to a compound called Kavalactone. A large commercial kitchen, also known as a food incubator, available for rent by the day made King Kava possible by greatly reducing the costs of starting a business. King Kava was launched last June with an investment of less than $20,000 and is already present in 30 stores citywide. The caffeine-free organic drinks, which are available in mint lemon and ginger citrus flavors, recently started selling at the Whole Foods Market in TiBeCa.
Chicago-based tea cafe chain Argo Tea is pulled in different directions by the core cafe business and the growing potential of its retail products. The company currently operates over 20 locations in Chicago, Boston, New York and St. Louis, as well as one in Beirut, Lebanon. But recently, most of the growth has been coming from its line of bottled ready-to-drink teas launched just two years ago. The range of 8 flavors currently represents 20% of annual sales of $20million, but that share may reach up to 50% this year thanks to widespread availability in 10,000 retail stores at Walgreen, Safeway and 7-Eleven. For its cafe strategy, Argo Tea will focus on licensing to increase the number of locations in high-traffic areas like hospitals, universities and airports. The company also plans to expand in the Middle East, with outlets in Qatar, Dubai and Kuwait.
The Tea Spot, a tea and teaware manufacturer from Boulder, CO., struck a deal with Germany's Finum to distribute its tea accessories in Europe and Russia. Finum, a company based in Hamburg, is a renowned manufacturer of paper tea filters and offers a range of proprietary tea filters and housewares. The partnership will see Finum start distributing The Tea Spot's Steep & Go, a cold-brew bottle filter that pairs with disposable water bottles and allows drinkers to brew fresh tea in a water bottle in ten minutes. According to the CEO of The Tea Spot, the deal makes sense because both companies share similar values in terms of product quality, excellence and innovation.
Following the trend of beer microbreweries and premium coffee, interest in superior tea is growing steadily. According to the director of tea at Coffee Bean & Tea Leaf, customers across its 850 outlets are becoming more sophisticated when it comes to choosing their brew. More specifically, customers seem to focus increasingly on the quality of tea itself, rather than on the health benefits, a feature mostly responsible for the sector's growth in recent years. Drinkers are keen to know where the tea is grown and how it is harvested and processed. Furthermore, there may be a deeper shift in lifestyle that is causing this newfound interest in tea. People prefer to take time to enjoy the process of drinking tea in order to unwind and socialize. For many, superior tea simply does not fit the intense on-the-go way of life.
Tea Cuvée is a start-up iced tea manufacturer from Boston, MA, seeking to redefine how iced tea should taste. The founder points out that bottled tea beverages are often made with inferior and artificial tea concentrates to save on costs. Tea Cuvée, a reference to cuvée de prestige or a wine producer's top product line, is based on a superior alternative: cold-brewed iced tea. The unique feature is the time-consuming brewing process, which allows for flavors to be drawn out of the leaves slowly without releasing much astringency or bitterness. The company currently offers two flavors: the Moonight label, flavored with apricot and jasmine, and the Amber label, scented with rosemary and orange. The upscale beverage is distributed across Massachusetts and retails for $8.99.
Tealet, a startup based in Hawaii, puts a new spin on the tea business by connecting tea farmers and tea drinkers via an online platform. Teas are sourced directly from growers in China, Japan, India and other countries across Asia. They are sold by the ounce or based on a subscription model, where customers may purchase a bimonthly supply of different varieties. The idea is to enable growers to sell directly to consumers in order maximize value for both by circumventing the traditional distribution network of various middlemen. Tealet also encourages interaction between growers and drinkers, and allows farmers to share their stories about how each variety is made.
Townshend's Tea Company, a chain of teahouses in Portland, Oregon, is looking to continue its expansion beyond city borders. After opening several locations in Portland and one in Bend, the company plans to establish the next one in Eugene. The outlets share a coffeehouse atmosphere, which is reflected in comfortable seating, local artwork and computer-friendly spaces. The company has grown rapidly in recent years, posting a solid 100% increase in sales in 2012 alone. Teahouse operations accounted for a quarter of the growth, with the rest coming from local distribution of Kombucha, a type of fermented tea. Townshend's Tea is funding the equipment of the new location with its own money and plans to avoid franchising for the time being.
Amanzi Tea, a gourmet tea retailer from South Carolina, will open its first international location in the UK this month. The company currently operates an e-commerce website, a wholesale business and a teashop in Greenville, SC. The new location, based in London, will house a bar together with a retail shop and table seating on ground level, as well as a comfortable lounge area on the lower-ground. The outlet will offer 40 tea varieties brewed using precision boilers for perfect temperature control. The tea selection will rotate to include Amanzi Tea's 150 proprietary blends. Other beverages and snacks will also be served.
Tregothnan, a tea estate in England, relies on the country's reputation as a nation of tea-lovers to promote locally grown tea abroad. The tea garden, located in southwest England, is the only tea plantation in England and is headed by the descendants of Prime Minister Charles Grey, after whom the Earl Grey blend is named. The tiny plantation that opened in 2005 currently produces about 10 metric tons of tea and infusions. Trengothnan is focused on the high-end domestic market, but is also leveraging England's perceived expertise in the tea world to garner interest from abroad. Sales are projected to exceed $3 million in 2013, with half coming from exports. The estate plans to open a franchise of teahouses in China, following serious interest from Chinese investors.
Minto Island Growers, a small-scale farm cultivating and selling vegetables and plants, is ready to take on a rather unconventional challenge: tea production. The first step was to identify which varieties of tea bushes were most suitable for the local climate, a process that took over twenty years. Now that the farm has a half-acre dedicated to tea, its sights are set on the next stage: harvesting and processing the leaves on-site on a larger scale. The company has already reported a high level of interest from nearby tea bars, food stores and tea companies, all thirsty for home-grown produce. Despite mixed assessments from horticulturalists, Minto Island Growers will devote more land to this project in 2013, with additional two to three acres allocated to tea plants. The growers also applied for a federal grant to help cover the costs of processing, packaging and marketing their tea. They remain upbeat about their prospects based on positive feedback from their customer base.
French premium tea purveyor Le Palais des Thés hopes that tea can join the ranks of products associated with France, such as wine and cheese. The new flagship store, which opened last week in the SoHo district in Manhattan, houses 120 varieties of tea and lets customers interact with the leaves. The 700-square-foot store was created to give visitors the opportunity to see, taste and smell the varieties on display, with prices ranging from $8 to $130 per 3.5 ounces. According to a company executive, the French have a similar expertise for tea as they do for other gourmet treats. Therefore, the location was chosen based on the premise that SoHo residents are receptive to European brands. Le Palais des Thé opened another store in Upper West Side in November 2012.
After years of promoting green, white and iced tea, Lipton's latest advertising campaign is devoted the core business of the company, namely black tea. The national campaign is the first in over 20 years to feature black tea, which is by far the most consumed type of tea in the US with 85% of the market. According to market data, Lipton led the $1.16 billion category with $265 million in sales in 2012, well in front of Bigelow at $117 million. The multi-channel campaign is centered around the pleasure and the resulting uplifting feeling of drinking tea and includes television, digital, in-store, social, public relations and a worldwide contest on Instagram. Lipton's budget for this campaign is estimated to top $10 million, compared to $5 million that the company spent on advertising last year.
In response to rising demand for quality tea in restaurants across the US, China Mist Tea Company announces the launch of two additional tea brands geared towards the foodservice sector. DJ's TeaMarket Blends and Signature Tea aim to improve the quality of tea in a market historically dominated by low quality tea. DJ's TeaMarket Blends is positioned as a mid-market brand, whereas Signature Tea is value-priced and represents an alternative to low-end teas that may taste astringent. The current portfolio is intended to offer restaurants a wider choice of brands to match varying customer demand, as awareness of quality tea continues to develop in all markets. Tea is often the highest profit margin item on the menu.
In the latest corporate social responsibility report, Honest Tea sheds light on major initiatives that it is currently implementing. The iced tea manufacturer that was purchased by Coca-Cola in 2011 and is present in over 100,000 stores reaffirmed its commitment to Fair Trade practices, with an estimated $350,000 gathered in premiums since 2003. In terms of purchases, Honest Tea has bought 4.4 million pounds of organic tea leaves last year. By reducing the weight of outer cartons by 0.56oz, the company saved 354,000 pounds of packaging material, while simultaneously reducing fuel consumption to transport the goods from plant to store. Finally, the company is working on consolidating its production by shutting two production facilities in Oregon and replacing them with a new plant in northern California.
An affiliate of Joh. A. Benckiser Group agreed to purchase Caribou Coffee for about $340 million. The German investment company offered stockholders $16 per share, a premium of about 30% on Friday's stock closing price. Earlier this year, Benckiser purchased Peet's Coffee and Tea for approximately $1 billion and will now have more than 800 US outlets combined. That makes it the second largest purveyor of premium coffee in the US behind Starbucks Corp. Caribou Coffee, founded in 1992, operates its own outlets and licences its coffee to Green Mountain Coffee Roasters for its Keurig single-cup coffee brewers. It reported a 3.5% rise in comparable-stores sales in the third quarter.
The CEO of D E Master Blenders, the coffee and tea company spun off by Sara Lee Corp, will depart at the end of 2012, after just 12 months in charge. According to D E Master Blenders, the company will part ways with Michiel Herkemij by mutual consent over differences of opinion relating to the speed of implementation of strategic changes. D E Master Blenders, owner of Pickwick and Tea Forte tea brands and Senseo single-serve coffee machine, is trailing competitors like Kraft Foods and Nestlé. The outgoing CEO had hoped to catch up to the competition by implementing a strategy based on innovation and product premiumization. As a result, the company has recently revamped its Senseo single-serve coffee system with new packaging and flavors. It has also introduced a new machine that uses whole beans, aimed at the specialty coffee market.
Starbucks Corp. announced plans to significantly expand its operations at home and abroad. The coffee chain, which operates over 18,000 shops around the world, expects to open 3,000 new stores in the Americas by 2017, with over half of the new outlets popping up in the US. Starbucks also looks to increasingly rely on tea and juice sectors to drive growth thanks to Evolution Fresh and Teavana brands acquired in recent months. The goal at Teavana will be to add tea bars featuring tea-based beverages to the existing offer of dry leaves. Starbucks may also start selling Teavana's teas in its own outlets. The coffee retailer also expects China to overtake Canada as its second biggest market in 2014 and plans to have nearly 4,000 cafes in Asia by the end of 2013.
Argo Tea recently unveiled a new location at Chicago O'Hare International Airport. The tea café, also called "teaosk", has an area of only 500 square feet, but is already the company's third spot at O'Hare Airport and second in Terminal 3. It offers more than 30 tea-based beverages and more than 30 varieties of loose tea, along with a selection of tea accessories and gift items. Argo Tea hopes to capitalize on the growing trend of travellers seeking out healthier options when on the road. According to the CEO, the company will continue to expand its presence in the travel category in the US and abroad. Argo Tea now operates more than 30 café locations. It recently opened its first international outlet in Beirut, Lebanon.
Stash Tea, a purveyor of specialty teas, opened its second retail outlet in Portland, OR. The 1,500-square-foot space also houses the company's first tea bar with seating for seven people. Best known for its teabag range sold in supermarkets, Stash Tea is playing catch-up with other competitors, many of whom have already diversified into the tea retail channel. The company took the premises over in May and spent six months refurbishing them. The priority was to replace water-damaged flooring and open up sight lanes. In terms of style, the setting looks clean and minimalistic despite the presence of several brewing devices and other equipment. The store also carries over 300 teas, including a few rare varieties. Holiday specials, lattes, ciders and hot chocolates made with Lapsang Souchong tea are featured at the tea bar.
The Shareholders Foundation, an investment portfolio-monitoring firm, announced a lawsuit that seeks to block Starbucks' takeover of specialty tea retailer Teavana. The lawsuit is filed by an investor in Teavana and aims to halt a major deal that was struck just days ago. On November 14, Starbucks announced that it has agreed to purchase Teavana for $620 million or $15.50 per share in an all-cash transaction. But based on previous share price of above $20 and a target price of $24 issued by one analyst, the plaintiff claims that the purchase price is unfair to shareholders and undervalues the company. According to the same plaintiff, the sale process has also been unfair to Teavana's investors.
A team of social entrepreneurs has launched a tea company specializing in premium and rare teas exclusively from Nepal. Nepali Tea Traders is the first company in America to offer over twenty specialty teas from small gardens in Nepal, which is one of the poorest countries in Asia. The range includes natural and organic black, green, oolong and white teas that are grown at ideal altitudes of 4,000 to 8,000 feet. The Colorado-based company has made a commitment to donate its profits to the Nepal Youth Foundation, a non-profit organization that provides health care, education and social services to the children of Nepal. The company also offers a range of teabags and tea accessories, and plans to introduce a retail range in 2013.
The Coffee Bean & Tea Leaf, the second-largest coffee chain in the US, recently opened its first two outlets in Thailand in a bid to increase exposure to Asia. With 300 stores in the US and 875 stores overall, the chain hopes to double the number of outlets in Asia, which already stands at 520, within the next five years. According to the company, the hardest part was to find the right partner to run the local operation. In the end, it decided to team up with Fico Corporation, a hotel and retail business operator and now expects to open up to 75 stores in Thailand over the next five years. The outlets will range from small kiosks to full-scale stores. The specialty coffee and tea retailer hopes to tap Thailand's growing appetite for gourmet coffee, a market expected to increase by over 10% next year.
In a landmark deal for the US tea industry, Starbucks agreed to buy Teavana for $620 million in cash. The purchase of Teavana's 300 shopping mall locations mostly in the US and Canada is a clear signal that Starbucks intends to move beyond cafes, whose sales are lagging in regions where tea is more popular than coffee. For Teavana, the deal is set pave the way for rapid growth beyond North America by tapping the experience and expertise of its new parent company. According to Starbucks, the company will seek to replicate its success in the coffee business by offering more tea-based specialty beverages that can be enjoyed in-stores or on the go. By the same token, Starbucks plans to expand the newly acquired company into the consumer packaged goods category with a line of teas destined for the supermarket sector. The coffee giant offered $15.50 per share to Teavana's shareholders, which was 10 percent below what the stock was priced at on its initial public offering last year.
As a result of focus on growth and expansion, Teavana reached three important milestones in recent days in terms of bolstering operations in the US and abroad. The largest specialty tea retailer in the US opened its 300th company-owned store in North America. The outlet, which can be found in Solano in Northern California, is the brand's 247th store in the US alone. Teavana has also completed the rebranding of all 46 stores in Canada that belonged to Teaopia prior to its acquisition a few months ago. Finally, the premium tea chain unveiled its first store outside North America in Kuwait this week. The premises are located at The Avenues, one of the largest malls in the Middle East.
One of the most famous tea brands in the world, Tetley Tea is getting ready to celebrate its 175th anniversary this year. Launched in 1837, the company has developed into the world's second largest manufacturer and distributor of tea, as well as the largest tea company in the UK and Canada, and the second largest in the US by volume. Having introduced the first teabag to the UK market in 1953, Tetley Tea has also become an iconic symbol of Britain's love of tea and has contributed to the nation's public culture through many memorable adverts. To commemorate the anniversary, the company has created a tea table book in partnership with a cancer charity.
QTrade Herbs & Spices, the largest organic tea supplier in North America, has announced plans to acquire Kopius Teas. The move comes as QTrade tries to consolidate its wholesale services and accelerate its web presence. Kopius Teas worked closely with QTrade since 2008 to provide services for exclusive manufacturing, packaging and marketing of specialty teas for startup enterprises, with QTrade concentrating on larger food service and branded segments with formulation, blending and packaging contracts for high volume bulk teas. As the North American tea market continues to grow, QTrade decided to integrate Kopius and offer clients a unified wholesale services platform for established and aspiring businesses alike.
Unilever's business unit that includes tea has seen volumes decrease in three of the past four quarters, while its tea brands continue to suffer from a lack of innovation and fierce competition. Lipton, Unilever's biggest tea brand and the world's second-biggest beverage brand behind Coca-Cola, has surrendered its top spot in the US ready-to-drink tea market to Arizona last year, and has seen many competitors, such as Tropicana, V8 and Vitaminwater, introduce tea-based beverages. The US bagged and loose tea category, worth around $800 million in sales, has also been a challenge for Unilever, as it cedes market share to medium-range brands like Tazo and Twinings. Experts claim that Lipton brand has become too generic and appeals less to the new generation of tea drinkers that are focused more on premium brands, green tea and tisanes.
The Coca-Cola Company, the world's largest beverage manufacturer, is expanding its contract-farming portfolio to tea, coffee and other ingredients. Contract-farming consists of a company supplying growers with inputs such as seeds and chemicals, and buying back the crop at a pre-determined price. This strategy, used by Coca-Cola in many countries around the world, allows it to protect itself against price fluctuations, control agricultural practices, deliver higher yields and monitor quality specifications. As the company's sales related to tea continue to grow, it now plans to expand this system to tea, especially in Africa, where the availability of arable land is high.
One year after The Coca-Cola Company exercised its option to purchase the remaining stock of Honest Tea, the company's CEO claims the process was beneficial for the organic tea manufacturer. Increasing exposure and sales have enabled the company to make a positive impact on the beverage industry and change Coke from within. One example is the amount of organic ingredients that the company purchases, increasing from 790,000 pounds to 4 million in five years and thereby supporting more sustainable farming. Honest Tea also stood up to Coke by refusing to stay silent about the absence of high fructose corn syrup in its beverages. Despite these efforts, critics and longtime fans claim that Honest Tea is operating in the shadow of its parent company and has become too dependent on it.
In a bid to emulate the success of Starbucks, Argo Tea has started to expand internationally by opening its first tea store outside the US. The specialty tea chain that currently operates almost 30 stores across the nation opted for Beirut, Lebanon. According to the CEO, Beirut was chosen as a gateway to the Middle East and more stores are expected to pop up in the region. The company is also looking to expand to Asia and Europe in the future. Since opening the first store in Chicago back in 2003, Argo Tea has tried to combine loose tea retail with tea-to-go à la Starbucks. The first foreign store will stay true to this concept, with an offer of 40 tea blends and more than a dozen signature drinks. Prepackaged sandwiches, salads and snacks will also be available.
Billy Corgan, the frontman of alternative rock band Smashing Pumpkins, has opened a tea shop in Chicago. Located in Chicago's north shore suburbs, Madame ZuZu's is designed to serve as a social hub for the community, blending tea drinkers with music, photo galleries, art displays and speakers. Décor is inspired by the era of Parisian seductive burlesque, Cubism and hot Jazz. The teashop also boasts an upright piano from the 1930's that will enable local musicians and artists to share their talents with the community. Billy Corgan wants to the place to have no age boundaries and to attract everyone from young students to senior citizens.
The Coffee Bean & Tea Leaf has partnered with Finnish mobile phone manufacturer Nokia to offer wireless mobile phone charging in select cafes across the US. Nokia will introduce wireless charging plates for customers who wish to recharge their phones whilst sipping on tea or coffee. It is expected to target large metropolitan areas and airports. The technology is compatible the Qi wireless charging standard, championed by many operators and consumer electronics manufacturers. The Coffee Bean & Tea Leaf, the world's largest privately held specialty coffee and tea retailer, is simultaneously launching a smartphone app featuring store locations and product information. The company currently operates more than 850 stores in 24 countries.
Specialty tea retailer Teavana has reported better-than-expected adjusted quarterly profit and has forecast higher full-year revenue. Excluding expenses related to mid-quarter acquisition of Teaopia, a chain of 46 specialty tea stores in Canada, the Atlanta, Georgia-based company earned 3 cents per share, above analysts' estimate of 2 cents per share. Quarterly net sales also rose by 38% to $43 million. Teavana anticipates full-year revenue to be in the range of $222-$231 million, well above average Wall Street expectations of $167 million. Despite these encouraging numbers, the company's stock has lost approximately half of its value since last year's IPO.
Anglo-Dutch food and beverage giant Unilever, owner of brands such as Lipton and PG Tips, may be on the verge of entering the tea retail sector. According to a job specification issued by the company, Unilever is looking for a global manager to launch a new concept of branded tea cafes to drive growth of its tea brands. It hopes to replicate the effect Starbucks and Nespresso had on the coffee industry over the last few years, changing how customers perceive the beverage and how they consume it at home and on the go. Unilever did not provide any further details on the project, but it is expected to be launched in selected countries this year and in many others in 2013. It should be fully developed by 2017.
Le Palais des Thés, a Paris-based specialty tea retailer, plans to set foot in the US tea retail market later on this year. First stores are expected to be located in Manhattan, on the Upper West Side and in SoHo, and should open in November. The company already has a show room in Manhattan, but is now looking to expand its retail operations in areas where it has a large customer base. The 300- and 700-square-foot shops are each expected to generate $1 million in annual sales, according to Le Palais des Thés. The French brand already operates around 30 retail locations worldwide, mostly in France and Belgium. Numerous other gourmet tea companies such as Argo Tea, Davids Tea and TeaGschwendner have previously chosen Manhattan to host their boutiques.
The Coca-Cola Company is gearing up for a massive marketing push to support Fuze ready-to-drink iced tea brand in early 2013. This comes as the company is set to lose its distribution deal for Nestea at the end of 2012. The beverage giant lags considerably in the ready-to-drink iced tea category valued at $5.5 billion and is currently ranked fourth, with sales of Fuze representing less than a 0.1% of the category. And while Coke is still silent on the budget and campaign specifics, it is expected to focus on building brand awareness and the investment is likely to eclipse the $8 million budget of 2011, which saw Fuze launch its first TV campaign. Ultimately Fuze hopes to rival AriZona iced tea. The privately held company controls 40% of the RTD tea category, yet relies on a tiny annual marketing budget estimated to be in the tens of thousands of dollars.
DavidsTea, the Canadian specialty tea retailer, is set to open three new retail stores in the Bay Area over the next couple of months. Having opened its first two US locations in New York in 2011, the DavidsTea plans an aggressive expansion in and around San Francisco. Two further retail spaces are under consideration and other locations are being actively scouted for. According to the company's founder, the aim is to spark a tea culture revolution among San Francisco's strong base of local shoppers engaged in their community. The stores will sport company's typical design elements, such as minimalist lines and spots of bright colors, and will offer seating and free wireless. DavidsTea stores feature 150 varieties of whole-leaf teas that can be purchased loose or brewed in-store. Since 2008, the Canadian tea retailer has grown from one to 70 stores in North America, and plans to open at least 30 more stores this year.
Complex Beverage, a Florida-based independent start-up company, has announced the launch of its new brand of beverages containing lettuce extracts. Lettuce Tea brand offers functional tea beverages brewed with green and black teas, and enhanced with lettuce extracts. According to the press release, lettuce extracts have been highlighted by prominent health professionals such as Dr. Oz and the American Cancer Research Center as having possible dietary health benefits. It also cites independent studies that suggest that Indole-3-Carbinol, a substance found in lettuce family of vegetables, may reinforce the metabolism and immune system strength, as well as help fight obesity.
The share price of Peet's Coffee & Tea continues to edge higher, despite last week's announcement of a one billion dollar acquisition agreement with Germany's Joh. A. Benckiser, making it the most expensive US beverage deal. According to experts, this signals that traders do not exclude the possibility of counterbids from other large rivals. One company that may be particularly interested in such a move would be Starbucks. A successful rival bid would allow Starbucks to gain a foothold in the gourmet retail market and prevent Peet's from expanding its coffee shops. Analysts estimate that the coffee behemoth would be prepared to pay a roughly 10% premium above Peet's current stock price. Starbucks currently has a market value of $36 billion.
A New York appeals court has ruled that the company behind AriZona Iced Tea can buy out its co-founder's stake. The ruling allows Domenick Vultaggio, the company's de facto manager, to buy out the 50% stake of co-founder John Ferolito. Furthermore, the ruling means that Vultaggio does not have to use his own money to buy out Ferolito's stake, a prospect that could have put a lot of pressure on Vultaggio. A previous agreement prevented Ferolito from selling his shares without Vultaggio's consent, despite reported interest from companies like Nestlé and Coca-Cola. According to Ferolito's lawyers, the company is worth from $4 billion to $6 billion, whereas a lawyer for Vultaggio cited a 2007 deal valuing the company at $432 million.
Peet's Coffee & Tea Inc has announced plans to be acquired by Joh. A. Benckiser for almost $1 billion. The specialty coffee and tea retailer has over 190 retail locations, mostly in California, and is valued at $73.50 per share, which represents a premium of nearly 29% over Friday's closing stock price. The move is expected to strengthen Peet's financial position as it competes against well-established tea and coffee retailers such as Starbucks and The Coffee Bean & Tea Leaf. The company will be privately held and will continue to be run by its current management team. It will remain based in the San Francisco Bay Area. Joh. A. Benckiser is an investment vehicle for the Reimann family of Germany, which owns stakes in companies such as household products maker Reckitt Benckiser and fragrance and cosmetics company Coty Inc.
The Coffee Bean & Tea Leaf has opened its second spot in Huntington Beach, California. The company-owned café is positioned in the heart of downtown, close to the beach. Designed with a young, urban audience in mind, the latest location reflects the ubiquity of surfing culture in Huntington Beach and contains a three-dimensional art installation made up of surfboards, as well as other elements inspired by the coast. The 1800 square-foot café also benefits from a tall standing bar and a 300 square-foot patio. The oldest and largest privately-held specialty coffee and tea chain in the US has over 800 locations in 23 countries.
Bigelow Tea may be looking to add a Chief Information Officer to its executive ranks, according to company CFO and Executive Vice President. The move would allow Bigelow to make greater strategic use of IT in order to improve technology efficiency and drive business growth. The CIO would also be responsible for overseeing company's website architecture, as well as business software systems that retailers and distributors use to place orders. At the moment, the company employs 340 people, yet only nine of them are devoted to IT matters and are having trouble coming to grips with various demands related to information technologies. Bigelow Tea was founded in 1945 and has manufacturing plants in Connecticut, Kentucky and Idaho. It sells 75 million boxes of tea per year through various retail outlets.
Honest Tea, an organic bottled iced tea manufacturer, has launched its first integrated advertising campaign. The ads aim to expand the consumer base by highlighting products' real, organic ingredients and transparent business practices under the tagline "Refreshingly Honest". The multi-platform campaign features Honest Tea's first TV commercials, which will be supported by digital video, social media, billboards and nearly three thousand grassroots events around the country. Since its acquisition by The Coca-Cola Company, Honest Tea has seen its distribution expand from 15,000 accounts in 2008 to over 100,000 accounts in 2012.
Austrian glassmaker Riedel has announced plans to develop a line of tea glasses together with Lalani & Co, a UK-based gourmet tea company. The partnership, still in its early stages, will see the creation of a range of tea glasses based on findings from a workshop that will seek to identify the optimal shape and size of glass for each variety. Riedel will also use several of its stemless wine glass designs for inspiration. Tea is often compared to wine among experts, because features like terroir and provenance are equally important. Similarly, tasters prize aroma and mouthfeel, as well as tannin and acid quality. Lalani & Co specializes in artisan and exclusive teas destined for prime restaurants and hotels, mostly in London.
A New York appeals court has recently dismissed key legal claims in the $287 million dispute between the estranged co-founders of Arizona Iced Tea. The court dismissed accusations by company co-founder Domenick Vultaggio and Beverage Marketing USA Inc, Arizona's parent company, against company co-founder John Ferolito. The plaintiffs had accused Ferolito of breach of contract, unjust enrichment and breach of fiduciary duty. They are also involved in a separate case to determine how much the iced tea manufacturer is worth. The outcome will determine what price Ferolito's stake can be sold for. According to court filings, potential bidders have offered as much as $2 billion for the 50 percent stake.
Starbucks, the world's largest coffee-shop operator, has announced plans to open its first Tazo tea store in October. The tea-only Tazo store, which will be located near the company's headquarters in Seattle's University Village, will sell more than 80 varieties of loose-leaf tea and will allow Starbucks to test the waters of tea retailing. The store will also feature a personalized tea blending station, as well as pastries, baked goods and packaged chocolates. Starbucks, which currently operates more than 17,000 locations worldwide, bought Tazo in 1999 for $8.1 million. Tazo is now a $1.4 billion brand and Starbucks hopes that it can increase its presence in the $95bn global tea market. The company claims it does not have immediate plans to open further stores.
Honest Tea, the largest organic bottled tea company in the US, has announced its commitment to Fair Trade USA and the organization's new vision. Fair Trade USA's "Fair Trade for All" vision seeks to expand its reach and impact by broadening the kinds of growers who can be certified and maintaining rigorous standards for working conditions and community development projects. Honest Tea, which represents 15 percent of Fair Trade USA's total community development premiums in the tea category, has purchased over 300,000 lbs of Fair Trade Certified tea and returned over $100,000 to tea gardens in 2011. Fair Trade USA funds education, healthcare, worker safety and organic certification projects in tea farming communities around the world.
Teavana has launched a series of videos introducing Japanese matcha green tea. Matcha is a fine green tea powder made from leaves grown partially in the shade. The reduced exposure to sunlight makes tea leaves grow slower, which results in leaves that are larger and rich with chlorophyll. Once the leaves are ground, they can be used as an ingredient in a multitude of beverages. The short informational videos feature topics like history of matcha, as well as several step-by-step matcha recipes, such as matcha latte, iced matcha and matcha smoothie. According to Teavana, matcha may contain higher concentration of non-water soluble vitamins, minerals and fiber.
Unilever, the company behind PG Tips and Lipton tea brands, is launching an advertising campaign to promote tea bag recycling. It is estimated that tea bags are the largest form of unavoidable food waste in the UK and produce 370,000 tones of waste every year. The campaign will encourage people to ensure that tea bags, which are made mostly of organic material, are recycled after use with the rest of the household waste. The company is working with a couple of local councils and a government-backed waste agency on its latest initiative to inform and educate consumers, which is part of Unilever's ambitious goal of halving the landfill waste within eight years. The Brits drink over 60 billion of cups of tea per year.
Associated Brands, a supplier of private-label and co-manufactured packaged foods and beverage products, has completed a merger with North American Tea & Coffee, a Canada-based manufacturer of specialty teas. According to Associated Foods, the merger broadens and strengthens its private label business, giving access to the fast-growing market for specialty tea. Associated Brands hopes that North American Tea & Coffee, the largest independent specialty manufacturer in Canada, will drive future growth thanks to a younger demographic and their orientation to health and wellness. The new company will operate under the name Associated Brands and will integrate manufacturing facilities in British Columbia and Ontario, Canada.
Pure Leaf Iced Tea has announced a marketing campaign to highlight its freshly brewed taste. The brand, managed by Pepsi Lipton Tea Partnership, aims to communicate that its iced teas are freshly brewed from hand-selected leaves thanks to "For the Love of Leaves" campaign that will roll out in the coming weeks. It will feature a digital campaign, new radio spots and out-of-home advertising in select markets. Pure Leaf is also introducing a new environmentally-friendly PET packaging. The square-shaped bottles are lighter and allow for high pallet efficiency, thereby saving fuel during transport. Pure Leaf offers both sweetened and unsweetened varieties in 18.5oz single-serve bottles and a new 59oz multi-serve carafe.
Famous British tea manufacturer Twinings has set its sights on conquering the tea market in India by means of teabags. Twinings hopes that evolving tastes and increasing sophistication among 1.2 billion potential consumers will prove lucrative in the long run. So far, the company concedes that sales have not been stellar. Despite securing a third of India's teabag market since introducing the brand in 1997, turnover from the country represents less than 1% of global sales. This is mainly due to the fact that teabags are not widely used in India, where tea is mostly brewed in loose form with milk and spices. The company plans to challenge this trend by highlighting its upscale positioning and improving the image of the teabag itself.
Honest Tea is planning to air its first national ad campaign, a year after being bought out by the Coca-Cola Company. The acquisition gave Honest Tea a significant boost in distribution across the US and the company is looking to capitalize on that by increasing its brand awareness nationally. Since Coca-Cola's approach in 2008, Honest Tea has grown distribution from 15,000 outlets to more than 100,000. And while it commands a mere 0,5% of the ready-to-drink tea market, it is one of the fastest growing brands on the US market, with volumes up by 31% in 2011. According to the advertising agency in charge of the operation, the brand campaign will include digital, TV and outdoor media and will air this summer. Honest Tea also plans to rework its packaging over the next 18 months.
Atlanta-based Teavana, a gourmet tea retailer currently operating more than 200 stores, has purchased one of its main Canadian counterparts Teaopia. The company was bought for $26.9 million. Teaopia is a specialty tea retailer with substantial presence in high-end malls across Canada. It was founded in 2005 and currently runs 46 company-owned stores. Last year, net sales reached $17 million and 12 new stores opened their doors. From Teavana's perspective, the deal immediately establishes a strong foothold in top locations in many of the best malls in Canada, where per capita tea consumption is twice as high as in the US. It also keeps integration costs low thanks to similar store layouts and sales systems between the two companies. Teavana plans to operate 500 locations by 2015.
Kusmi, a gourmet tea manufacturer from France, has unveiled plans to expand rapidly beyond the local market thanks to the tea bar concept. The company anticipates revenues to reach €25 million in 2012 and hopes to become the first global luxury tea company. According to the CEO, Kusmi's sales should hit the €100 million mark in 2016, compared to just €1 million in 2005, buoyed by a changing image of tea as a fashionable beverage. The gourmet tea company currently has 21 outlets, mainly in France, and plans to open its first tea bar in Paris this year. Over the next two years, Kusmi expects to open around 30 new stores in France and beyond. It currently also has sales points in New York and Montreal.
David's Tea, a specialty tea retailer from Canada, has received a $14 million minority investment led by Highland Consumer Fund. David's Tea, founded in 2008, has rapidly established itself as a major player in the Canadian gourmet tea market with 75 stores across the country and has also entered the US with two prime locations in New York City. Funding will be used to expand its retail operations in North America. The company will also establish a headquarters in the US as part of the deal. Highland Consumer Fund is a venture investment fund focused on consumer products, services and retail investment opportunities in growth-focused companies.
Honest Tea has announced a national recycling initiative that will be launched in New York City later on this month. "The Great Recycle" seeks to increase recycling rates across the US by asking participants to make recycling pledges online and then following through with them. The project will be launched in New York City by placing a 30-foot recycle bin in Times Square. Organizers hope to receive 45,000 plastic, glass and aluminum beverage containers in ten hours, which will then be recycled. The event supports New York City's goal of doubling recycling rates in 5 years. In 2008, Honest Tea partnered with Bethesda Green and The Coca-Cola Company to install 33 recycling bins throughout the hometown of Bethesda, MD.
Compassion Tea Company, a premium tea company that donates all after-tax profits to projects in Africa, has launched an online store in a bid to expand operations. The emerging tea company donates 100% of its after-tax profits to CareNow Foundation that provides pharmaceuticals, medical supplies, and funding for staff and projects in rural Africa. The new website offers a selection of over 80 whole-leaf teas ranging from blacks, whites and oolongs to decaffeinated teas and herbals. The teas are sold as loose leaf or in pyramid bags and may also be purchased through membership programs.
Intercontinental Hotels Group is set to introduce a new luxury hotel brand aimed at the massive market in China. Hualuxe Hotels & Resorts hopes to build a presence in over 100 Chinese cities within 15 to 20 years. One of the most innovative aspects will be the absence of bars serving alcoholic beverages, as is the norm in the West. Instead, tea houses will reflect a holistically Chinese experience and cater to local audience much more accustomed to tea. Other features include multi-function suites, noodle bars, traditional Chinese gardens and many greeting hosts that offer VIP specific treatment.
Clipper Teas, a tea, coffee and chocolate manufacturer from the UK, has been snapped up by Wessanen, a Dutch food group. The tea company, founded in 1984, employs about 90 people and was first sold to a private equity firm for £30 million in 2007. Although details of the deal were not disclosed, it is believed Wessanen shelled out £50 million for Clipper Teas. According to the CEO of Wessanen UK, the company plans to keep production in the UK and export the brand across Europe in an effort to capitalize on increasing demand for natural foods. Clipper Teas was the first tea manufacturer to be awarded Fairtrade status in 1994 and its products are currently available in 50 countries. It recorded sales of £16 million in 2011.
Sara Lee, a global consumer-goods company based in Illinois, has announced that it will spin-off its coffee and tea business by June. This means that the company will be split into two divisions: an international coffee and tea business and a North American retail, foodservice and specialty meats business. The international coffee and tea business will be domiciled in the Netherlands and will move its headquarters from Utrecht to Amsterdam in the second half of 2012. The spin-off is part of Sara Lee’s plan to trim its portfolio in order to focus on its most profitable food and beverage businesses. The company has recently sold the majority of its US foodservice coffee and tea operations to The J.M. Smucker Company and purchased the specialty tea manufacturer Tea Forté.
Stephen Twining, the tenth-generation descendant of founder Thomas Twining, has revealed how the homonymous tea company goes about blending its teas. Twinings, part of Assiciated British Foods conglomerate, employs 9 tea tasters, who double as buyers and blenders. They are trained for a minimum of 5 years before assuming the responsibility of crafting over 200 blends sold in 115 countries. Tea tasters also adjust the famous blends to local preferences. For example, they decide how much tea from Assam goes into the best-selling English Breakfast Tea, a blend comprised of teas from 15 to 25 estates in Assam, Sri Lanka and Kenya. The company currently has 3 versions of English Breakfast (English, Indian and Rest of the World) and is working on a version for Russia.
Jamba Juice Company, a restaurant retailer with 750 locations in the US, has announced the purchase of Talbott Teas. The specialty tea retailer, founded in 2003 and based in Chicago, manufactures premium, yet accessible tea blends in luxurious and trendy packaging. They are sold through QVC, retail, online and HoReCa channels. According to Jamba Juice, the newly acquired premium tea company reflects its strategy for growth through purchases of lifestyle specialty brands that fit well with Jamba's positioning around health and wellness. Talbott Teas gained awareness among the business community recently by participating in a television program that connects up-and-coming entrepreneurs with investors. Financial details of the deal were not disclosed.
Tata Global Beverages, the world's second-largest tea company, is looking to buy tea companies and brands in Russia and the US in order to strengthen its presence in two of the world's largest tea markets. After selling its stake in Glacéau, maker of VitaminWater, Tata has deep pockets worth approximately $200 million, according to company's vice-chairman. The goal is to become a global leader in branded healthy beverages through innovation, strategic acquisitions and organic growth. Russian and US markets are particularly appealing because of their size and growth potential. In 2010, the Russian market was worth $3.7 billion, whereas the US market recorded sales of $6.5 billion in 2011 and growth of 22% in the last 5 years. However, experts caution that Tata may lack the expertise and insight to take on rivals like Unilever, Danone and Nestlé.
The World Tea Expo will be held for the 10th time this year on June 1-3 in Las Vegas, NV. The trade show, which started a decade ago, has become the largest event for the tea industry, with more than 33,000 professionals attending the fair over the years. For this year's event, organizers have promised a "no repeat" policy for the many seminars, workshops and tastings that take place during the fair. The Expo will also benefit from an updated show floor, with over 200 exhibitors expected to showcase latest products and trends at the Las Vegas Convention Center. During the past 10 years, more than 35,000 flavors of tea have been tasted at the show and nearly 17 tons of leaves exhibited. Companies like Rishi Tea, Ito En and Harney & Sons have participated in each event since the inception.
Lion Heart Kombucha, a small manufacturer of kombucha tea, has opened its first storefront in Northwest Portland. The company was founded 3 years ago, when a couple started brewing fermented tea and teaching kombucha-brewing in their home. They moved the micro-brewery, which includes a number of stainless steel wine fermenters, to the current location about a year ago. The idea to open a storefront was initiated by large-scale orders. Lion Heart's store is relatively small, leaving just enough room for a cooler, a small table, a few shelves that hold kombucha home-brewing kits and two taps of flavored tea. The owners hope to expand the operation if things go well. A grand-opening celebration is planned for January 28.
Runa is a small tea company selling guayusa tea from South America that has a unique approach to business and funding. The company was founded in 2008 by two Brown University undergraduates who came in contact with the guayusa plant, which has more caffeine and twice as many antioxidants as green tea and was not sold in the US at the time. At the center of the company is a social program called "social premium fund" to finance local development projects for some 1000 farmers in South America. Runa relied on business plan competitions for start-up capital, but has diversified its funding sources ever since. The company, which saw sales of $277,000 in 2011, is now supported by the US and Latin American government grants ($500,000), angel investors ($1.6 million) and even the investment arm of socialist government of Ecuador ($500,000). It expects sales to hit the $1 million mark this year.
F+W Media, a publishing company from Ohio, has purchased World Tea Media, organizers of largest tea trade show in the US. F+W Media is active in approximately 20 special-interest categories, such as antiques and collectibles, crafts, writing and horticulture. This is F+W Media's first attempt to enter the gourmet food and beverage segment, and the company hopes to expand its presence through organic growth and further acquisitions. World Tea Media organizes the World Tea Expo, which will celebrate its 10th anniversary this year, the World Tea Expo East and the North American Tea Championship. The company also publishes World Tea News, an online industry resource. According to F+W Media, World Tea Media's offices will remain in Las Vegas and there will be no changes in executive management or staff.
Two of the biggest names in the food and beverage sector, Coca-Cola and Nestlé, are throwing in the towel on their US Nestea joint venture at the end of this year. The 50-50 partnership was established in 2001 and focused on the US ready-to-drink market. Yet as time passed, both companies started to work on other brands in their portfolio and the partnership began to make less sense with declining sales. In 2000, the Nestea's volume in the US was 113 million cases, compared to 78 million cases in 2010. The latter is dwarfed by Lipton's 2010 sales of 247 million cases. Coca-Cola is expected to focus on Gold Peak and Honest Tea brands, whereas Nestlé will continue to build its Sweet Leaf Tea marque. The Nestea joint venture will remain in place in Europe and Canada.
Sara Lee Corp, a giant of the food and drink industry, has purchased Tea Forté, a gourmet tea manufacturer, for an undisclosed amount. The Massachusetts-based premium tea company was founded in 2003 by former Museum of Modern Art designer Peter Hewitt and posted revenues of $12 million in 2011. It supplies loose and bagged teas to hotels, restaurants and luxury retailers in 35 countries worldwide. The purchase will complement Sara Lee's existing portfolio of brands, such as Ball Park, DouweEgberts, Pickwick Teas and Senseo, which have helped the company generate nearly $9 billion in annual net sales. Sara Lee has announced plans to split its business into two separate entities, one focused on meats and the other on the coffee and tea market.
The Wenham Tea House, the oldest continuously operating tea house in the US, is looking for a new owner. According to the president of the Wenham Village Improvement Society, which owns the tea house, several tenants have shown serious interest. Yet timing has not been ideal and owners have not yet been able to seal the deal during the holiday period. The tea house was built in 1916 for local women to sell their baked and canned goods. Since then, it was also developed into a restaurant. Its current operator is leaving at the end of the month because the venue is not making a profit. The tea and restaurant business is a major source of funds for the not-for-profit society, which gives out scholarships to local students, and raises funds for various other activities in the area.
Dilmah, the world's largest purveyor of single origin Ceylon tea, is moving forward with plans to expand its leisure brand. Ceylon Tea Trails, Dilmah's most lucrative sector, will see the addition of a fifth $2.5 million bungalow and a $25 million beach resort in 2013. The company, which already owns several luxury bungalows in Sri Lanka's tea-growing districts, plans to add further 5 or 6 boutique resorts in the coming years. Dilmah is also looking to increase capacity of its tea packaging facility in Peliyagoda. It will invest approximately $20 million to expand production volume and support increased demand for Dilmah tea. The company hopes these measures will allow it to reach a turnover of $200 million.
Rooibee Red Tea, a manufacturer of bottled rooibos tea based in Louisville, KY, has announced that it has issued $1 million in stock. The company hopes the capital will accelerate market expansion through its national broker Presence Marketing/Dynamic Presence, and its national warehouse distribution partners UNFI and KeHE. Rooibee Red Tea also added Dana Bowers to its board of directors. Bowers will help guide the company beyond state borders thanks to her direct experience of growing a rapidly expanding company. Red tea hails from the rooibos bush grown exclusively in South Africa. The caffeine-free tisane has gained rapid popularity in the West due to its high antioxidant content.
Zealong Tea, New Zealand's only oolong tea grower and exporter, is looking at new ways to create awareness and promote the brand. Zealong Tea relies on tourism to spread the message across Asia-Pacific region. The manufacturer organizes tea walks, as well as tea ceremonies and tastings at its plantation in Waikato, New Zealand. Around 500 tourists visit the 50ha plantation each week. Also, the company is promoting itself abroad and has established ties with TeeGschwendner, Germany's biggest tea retailer, thanks to a sale of 200kg of its oolong tea. Zealong Tea has also penetrated Japanese and American markets, although both remain tough to break into. Owners plan to invest a further $10 million in the plantation over the next years to add a larger tea house and luxury accommodation.
Adagio Teas, a manufacturer of gourmet teas, has opened its third location in the Chicago area. A year after launching its brick-and-mortar tea business with two stores in Naperville and Skokie, the online retailer brings the concept of "playground for tea" to downtown Chicago. The store features over seventy kinds of tea and herbal tisanes from countries like China, India, South Africa, New Zealand, Egypt and Japan. A long bar table extends the length of the store, encouraging customers to experience the teas, interacting with Adagio’s experts and each other. According to the company, the goal was to create a setting where customers would feel comfortable having fun experimenting with tea and creating something uniquely theirs.
A Netherlands-based non-governmental group claims that Unilever has not stopped abuses of tea workers, despite committing to source its teas sustainably. Center for Research on Multinational Corporations alleges that Unilever, which manufactures the famous Lipton brand, has failed to stop abuses of workers on Unilever’s Kenyan estate, including sexual harassment and poor housing conditions. It also purchases tea from estates in India where workers are kept permanently on rolling short-term contracts, denying them health and pension benefits, and are often exposed to dangerous pesticides while working. Unilever calls the claims unsubstantiated and relies on independent audits of its tea plantations by the Rainforest Alliance, a US-based nonprofit environmental group.
Teavana, a gourmet tea retail chain, launched its Perfect Tea Touch App for Android phones and tablets. The app contains information on company's selection of teas and offers many useful tools for tea lovers. One feature is a musical tea timer that contains suggested brew settings for each type of tea, paired with a soundtrack that reflects the culture and harmony of the place where that tea is grown. Perfect Tea Touch App also has a custom tea blender, Teavana store locator and the functionality to save your favorite teas and tea blends. The app links seamlessly to Teavana's mobile site to shop for tea or tea blends.
Atlanta Bread, a Georgia-based bakery and sandwich shop chain, has chosen Mighty Leaf to supply its hot and iced teas. The company will offer six varieties of Mighty Leaf iced teas, as well as a dozen varieties of hot teas, each packaged in sustainable silken pouches. According to Atlanta Bread, Mighty Leaf teas were chosen first and foremost for their taste, but also thanks to the company's involvement in sustainable farming and production methods in tea-growing regions. Atlanta Bread has started a coffee service in its 110 locations earlier this year by partnering with Italian Lavazza coffee brand. The bakery café chain also serves a variety sandwiches, salads, soups, bagels, breads, pastries and desserts.
Food and beverage giant Sara Lee Corp. sold a large part of its foodservice coffee and tea operations to J.M. Smucker Co. for $350 million. The acquisition will put J.M.Smucker, owner of Folger's and Dunkin' Donuts coffee brands, at the forefront of the US coffee market. The deal will also see both companies enter a long-term partnership to develop liquid coffee drinks and Sara Lee is set to pocket $50 million and growth-related royalties over the next 10 years. Sara Lee plans to focus on core food and beverage brands, but expects to wind down the rest of its North American beverage business. It looks to split into two companies in the first half of next year in order to separate North American and international brands.
This week witnessed the launch of a new tea company that aims to cater to true tea connoisseurs. Rare Tea Republic sources all of its teas directly from artisan producers from single estates throughout Northern India and the Himalayan Mountain region. The initial product range is made up of nineteen varieties that include black, green, oolong and white teas from places like Darjeeling, Kangra, Sikkam, Assam, Bihar and Nepal. Rare Tea Republic teas range from $6 to $30 for 50 grams. The young company plans to update its offer regularly to deliver the freshest, most unique selection of single estate full-leaf teas to connoisseurs. The teas care only sold online or via the telephone.
Steeped Tea is a Canadian direct sales tea company that relies on a unique business model to drive sales. The idea was born accidentally after a suggestion to organize a tea party led to adopt a business strategy based on independent partners throwing tea parties in people’s homes. Steeped Tea opted to sell their tea though independent consultants, mostly women looking for a part-time income, rather than by building up their own sales force. The company, with annual operating costs of $250,000, currently employs eight people and has 400 affiliated consultants who sell their tea across Canada. Each tea party yields an average of $500 in sales. The owners are now contemplating on expanding into the US market.
The Republic of Tea has announced that it has donated over $1 million to Susan G. Komen for the Cure, the largest source of nonprofit funds dedicated to the fight against breast cancer in the world. The company donates $1 for every item purchased from its Sip for the Cure tea collection. Sip for the Cure brand encompasses tea in tins, bulk bags, single-serve overwrapped tea bags, iced tea and mugs. The Republic of Tea makes all products in the Sip for the Cure collection available year-around, not just for a limited time during October, which is the National Breast Cancer Awareness Month. This year, The Republic of Tea has added a new Strawberry Hibiscus flavor to the collection.
The Tea Spot, a specialty tea company, was recently awarded a $460,000 Small Business Innovation Research Grant by the US Department of Agriculture for market research on Brewlux, a patent pending tea filter. The grant is for marketing research in support of the commercialization of compostable bioplastic tea filters for making loose leaf tea to-go in mass-foodservice. Brewlux is made of a compostable resin made of US corn. Research will be headed by company employees and a team from the Marketing Department at the University of Colorado. A prototype of this product was awarded 'Best Innovation' at the 2010 World Tea Expo in Las Vegas.
Two heavyweights of the ready-to-drink iced tea category are locked in a marketing war over the number one spot in the US market. According to first-half figures, AriZona and Lipton are neck and neck in sales with 39% and 34.8% of market share respectively. Year-to-date sales of Arizona brands are $595 million, compared to $559 million for Lipton brands. These numbers are particularly astounding, given that AriZona is an independent company and has built its reputation without the help of above-the-line marketing, whereas Lipton is investing heavily in marketing for its Lipton Brisk, Lipton Iced Tea and Lipton Pure leaf brands. AriZona relies on an aggressive pricing strategy and bold flavors, and plans to combat Lipton with new partnerships and event sponsorships.
Peet's Coffee & Tea, one of the largest coffee and tea retail chains in the US, is opening its ninth store in Berkeley, CA. This is about 45 years after the company's first store was launched by its founder Alfred Peet. Peet's store will replace a tea shop, A'Cuppa Tea, which is moving down two blocks. According to Peet's, the company has been trying to open up shop in the neighborhood for ten years. When the building landlord informed Peet's that the lot was vacant, they took the opportunity to move in right away. The store, located at 3200 College Ave., will replicate the chain's nationwide look and feel.
A specialty tea company is opening its flagship store together with a real estate agency in Manhattan. Tavalon will open its tea bar in October right next to the offices of Blu Realty Group. Businesses will be separated by a glass wall, but customers of both will be able to interact and enjoy tea while browsing through real estate offers. According to Tavalon, the Riverside Boulevard, where the company will open the tea store, has an untapped client base and is short on basic amenities like coffee shops, restaurants and grocery stores. The combination real estate office and tea cafe is to be called Blu Cafe by Tavalon. Tavalon Tea had a retail store in Union Square, in lower Manhattan, until 2009.
Teavana Holdings, the largest chain of specialty tea stores in the US, has reported second quarter sales of $31.3 million, up 36%. Net profit rose 72% to $1 million during the same period. Teavana reiterated strong growth expectations and anticipates full year sales to amount to approximately $160 million versus $90 million last year. Annual profits are expected to hit $16 million. The company has been opening new stores and growing its e-commerce business, as well as looking to expand into new markets. Teavana recently signed a 10 year franchise deal to develop stores in the Middle East, in Bahrain, Kuwait, Saudi Arabia, Qatar, United Arab Emirates, Egypt, Lebanon and Jordan. The Atlanta, Georgia-based retailer also aims to enter the Canadian market in the near future.
Zealong, New Zealand's only premium oolong tea grower, hopes to capitalize on recent health and radiation scares from Japan and elsewhere. The Taiwanese family-owned company, which has invested $10 million in its plantation and tourist and export venture, cultivates tea that is free of chemical sprays, fertilizers and additives. It claims to grow the purest oolong tea in the world. Until now, Zealong has exported its crop mainly to Taiwan, where oolong tea is prized as a corporate gift and for socializing. But the company is now attracting increasing interest from buyers from Germany, Japan and other countries due to recent radiation fears. There are also plans to go on a marketing offensive in New Zealand and stimulate domestic demand. Owners plan to invest at least another $10 million in the venture over the next few years, despite not yet making a profit since launching early last year.
Hain Celestial, owner of Celestial Seasonings brand, has unveiled the first line of refrigerated energy shot drinks. Celestial Seasonings Kombucha Energy Shots are made with raw kombucha, a type of fermented tea. They combine two hot trends in the ready-to-drink beverage category: kombucha and natural energy drinks. The 2oz (59ml) bottles will be available in natural retailers in October. Hain Celestial also revealed that new products added more than $30m in sales in 2011 and that next year the company expects to match or exceed these numbers. According to the CEO, Hain Celestial is looking at acquisitions to drive growth and hopes that international operations will contribute more to the bottom line in the future. Hain Celestial saw sales rise by 23% to $1.13bn in the year ending on June 30, with net income jumping 92% to $55m.
Ten Fu Tea, China's largest tea producer in terms of sales, is planning to list its shares on the Hong Kong stock exchange. The initial public offering is expected to raise approximately $300 million. Ten Fu Tea is looking to use the funding for further domestic expansion. It currently operates more than 1'100 chain stores in mainland China, up from 543 in early 2006. The company is involved in tea packaging, sales, research and development, tea culture and education and traveling. According to industry experts, Ten Fu Tea has made breakthroughs in terms of profitability and cross-regional development. Both are difficult for Chinese tea firms to achieve, because the majority of them are small- and medium-sized businesses. Insiders say that Chinese tea companies trail their international counterparts and need to adopt modern management and business models in order to compete.
Details are emerging about legal disputes that are brewing between the owners of AriZona Beverage Co. The business partnership between John Ferolito and Domenick Vultaggio has turned sour a while ago and the two owners are currently involved in a legal feud. In the past, they have clashed over management styles. The key issue now is the control of the company and the attempted sale of shares to Tata Global Beverages, the world's second-largest tea manufacturer and distributor. AriZona claims a third of the US ready-to-drink tea market and tops the likes of Lipton, Nestea and Snapple. According to court documents, it's annual revenue is nearly $1 billion and it employs approximately 1000 people.
Adagio Teas, a gourmet tea manufacturer, has announced the location of its third retail outlet. Adagio's Tea Experience Retail Store will be located in downtown Chicago, IL and will complete the original intent of piloting stores in three strategic locations: downtown, suburban street-level and high-end suburban mall. The retail space measures approximately 1000 square feet and is in a land-marked building a couple of blocks away from Michigan Avenue. Opening is planned for October 2011. The two previous stores in Naperville, IL and Old Orchard Mall in Skokie, IL opened their doors in late 2010. Adagio's further expansion in gourmet tea retailing will be guided by the results from these three stores.
The stock price of Teavana, the largest premium tea retail chain in the US, has shot up on its first day of trading. Shares of Teavana, priced at $17, opened more than 60% higher at $28.95 on the New York Stock Exchange last Thursday. Experts say that investors are attracted to companies like Teavana, because they are growing incredibly fast. The Atlanta-based retailer has tripled the number of stores in the last 5 years. The company now owns 161 stores in 35 states and has more than a dozen franchise outlets in Mexico. According to a recent filing, Teavana plans to have "at least 500 stores" in the US. It has recorded profits of $12 million on sales of $124.7 million last year, with the average transaction amounting to $36.
A wage hike demanded by workers in the tea growing region of Dooars in India is reportedly threatening the profitability of its two biggest companies. Tea workers want a raise of approximately 50% in response to a similar goal achieved by fellow workers in Darjeeling. Two of India's biggest tea companies, Goodricke Group Ltd and Duncans Industries Ltd, claim the pay rise, backed by key political parties and labor unions, is likely to plunge them into losses. Between them they produce about 34 million kilograms of tea a year and do not have too many gardens in other regions. Dooars is home to about 3100 tea plantations. It produces around 145 million kg of tea a year and employs at least 171'000 people on a daily basis.
Harris Tea is looking for new ways to offset the company's carbon footprint and will rely on solar power to reduce its impact on the environment. The tea company has announced that a solar panel system will power its New Jersey facility. The system will generate an estimated 600,000 kilowatt hours annually, which represents approximately 60% of the site's annual power needs. This is equal to a 300 million ton reduction in carbon emissions per year, or the combustion of 137'000 liters of petrol. In the future, Harris Tea aims for zero land fill. It plans to introduce self-sealing cartons eliminating plastic overwraps and install motion sensors for all warehouse lighting. Harris Tea also participates in the Carbon Disclosure Project.
According to several inside sources, food behemoth Nestle SA and tea giant Tata Global Beverages may be looking to acquire AriZona Beverage Co. Both companies held private talks with AriZona management recently, although the deal does not seem to be imminent. Nestle owns Nestea and Sweet Leaf Tea brands in the US, whereas Tata operates under Tetley Tea and several other marques. Founded in 1971, AriZona makes a wide variety of tea, juice and other types of beverages. It is currently one of the biggest brands in the US and is on par with Lipton Iced Tea, owned by Unilever-Pepsico, with about a third of the iced tea market. Coca-Cola Co, which lags rivals in the US tea market, was not mentioned by any sources as having a recent interest, according to Beverage Digest. Sources cite an estimated valuation for AriZona raging from $3bn to $4.25bn.
A tea company from Denver, CO., is succeeding in combining business and social responsibility. Teatulia has its sights on lifting a village out of poverty on the other side of the globe, while making a profit at home. The company teamed up with a tea garden in the Tetulia region in Bangladesh to source its organic tea. Teatulia also oversees initiatives that improve quality of life for 1200 tea garden employees and the surrounding community. For example, it encourages education programs and loans to farmers. The company started selling its products in a single Whole Foods grocery store in 2009 and is now present in 115 Whole Foods locations across the US. The start-up hopes to become profitable next year.
According to the brand ambassador of Twinings, a British tea manufacturer, the company is considering entering the tea retail market in the UK. Twinings plans to open a store with a contemporary twist in central London. More retail outlets would then follow. However, the company admits that it is still unsure how to tackle this project. It is especially cautious about the idea of selling cups of tea that can be taken away, akin to coffee. But an area for sampling would definitely be available, because any outlets would be designed to fit into the company's strategy, which is aimed at encouraging people to broaden their tastes. Twinings, owned by Associated British Foods, currently stocks about 250 varieties of tea.
DavidsTea is a young and dynamic tea retailer that is transforming the landscape of Canadian tea market. Founded in 2008, it aims to reinvent the tea shopping experience, moving it from a British or Asian to a North American and modern decor. It offers more than 120 tea varieties in stores with a bright, streamlined Scandinavian aesthetic. Last year, DavidsTea went from 8 retail locations to 40, and it plans to open 20 more this year. Although the retail chain does not reveal its sales figures, it claims that each store is profitable and the business as a whole is extremely profitable. This comes as no surprise, because tea has been one of the fastest-growing menu items in Canada for the past 6 years. Out-of-home consumption has grown from 500 to 584 million servings since 2007. A recent Agriculture Canada food-trends study predicted tea consumption will jump 40% by 2020.
Magwa Tea plantation in South Africa, the largest tea garden in the southern hemisphere, is facing an uncertain future after worker unrest has led to looting and abandonment. The 1803 hectare plantation provided jobs and career training for 1200 permanent and 2300 seasonal workers. In February, the plantation was shut down after workers went on a rampage due to a refusal to increase wages by 104%. Magwa Tea workers earn one of the highest salaries in the tea industry, five times more than their counterparts in the Republic of Malawi. Tea bushes have not been pruned since February and this year's crop is lost. A special task force has been appointed by the local governement to find a solution to the crisis and get one of the most successful tea gardens back on track.
Argo Tea, a chain of tea cafés founded in Chicago, has opened its fifth New York City location in just over a year. The outlet, located in the Chelsea district, will replicate the "Argo experience" of all natural tea-based signature drinks, over 30 varieties of loose leaf teas, FairTrade organic coffee, fresh-baked pastries, specialty foods, and a selection of teaware and accessories. According to Argo Tea, the company relies on natural high quality products, earth-friendly and sustainable business practices, and industry-leading innovations. It has further 15 locations in the Chicago area and one in St. Louis. The retailer employs over 250 people.
Cooper Tea Co. and Third Street Chai, makers of concentrated beverages, have agreed to merge operations. Third Street sells chai and lemonade concentrates under Third Street and Pixie Mate brands. Cooper Teas specializes in iced tea concentrates. The Boulder County-based companies hope to leverage their manufacturing capabilities and expand distribution. Both operate on different markets: Cooper Tea distributes primarily to the food service and convenience store channel, whereas Third Street is established in the retail sector. The companies will operate independently under DrinkWorks umbrella brand. Third Street has 22 employees and Cooper Tea has 18. The financial details of the deal were not disclosed.
Although Seattle is usually associated with coffee rather than tea, a tea and spice shop in the Pike Place Market is celebrating its 100th anniversary. The outlet opened its doors in 1911 and remained in the same premises for the entire period. MarketSpice offers more than 100 different teas and more than 200 spices, along with coffee, candles and accessories. Apart from in-store sales, the teas are shipped across the US and internationally, as well as sold in certain retail locations. Not much is known about MarketSpice's early history, because most of the store's records were kept in a storage area that was flooded about 10 years ago.
After being fully acquired by Nestlé last week, Sweet Leaf Tea management claims that the move will mark a new era for the beverage company. The deal will grant Sweet Leaf access to Nestlé’s distribution channels and a powerful, 700 people strong sales and marketing force. The company claims there will be no immediate changes in staffing, but may consider consolidating operations as synergies between Nestlé's many brands arise. According to the company's founder, despite high commodity prices, the deal will ensure no retail price increases due to Nestlé's huge purchasing power. Nestlé hopes to double Sweet Leaf's combined turnover of $53 million in one to two years.
Nestlé Waters North America, Inc., a subsidiary of the food giant Nestlé, has signed an agreement to acquire the Austin-based Sweet Leaf Tea Company, which owns Sweet Leaf and Tradewinds ready-to-drink iced tea brands. Its turnover is reported to total more than $53 million in 2010. Sweet Leaf Tea was founded in 1998 and sells naturally sweetened organic iced teas. Tradewinds, founded in 1993, specializes in brewed iced teas and tropical fruit juice drinks. This acquisition, which remains subject to applicable regulatory approval, will bolster Nestlé's beverage portfolio of bottled water to include high-quality iced teas, lemonades and juice drinks. Sales for Nestlé Waters North America topped $4 billion in 2010.
Teavana Holdings, Inc., a specialty tea retailer, has filled an initial public offering for up to $100 million last week with the Securities and Exchange Commission. Founded in 1997, the company now owns 146 stores in 34 states and 15 franchise stores, primarily in Mexico. Its net sales grew 38% in 2010, while comparable-store sales increased 8.7% compared to the same period in 2009. Net income was $12 million in fiscal 2010, up 126% from 2009. According to Teavana, its average transaction size is $35 and operating margins stand at 19%. The company plans to have 500 stores in the US by 2015 and expects to open 50 outlets in 2011. The share size and price, as well as the IPO date are yet to be announced.
Rishi Tea, a manufacturer of organic gourmet teas, has been sent a warning letter from the FDA for promoting certain teas as drugs. According to the agency, Rishi Tea website claims establish certain products as drugs, because they are described as intended for use in the cure, mitigation, treatment or prevention of disease. The company was also notified that particular teas may not be marketed without prior approval from the FDA. Furthermore, Rishi Tea was warned about nutrient content claims and the use of the term "antioxidant", which did not meet FDA guidelines. The agency urges the company to review its website, product labels, and other labeling and promotional materials to ensure claims fall in line with current regulations.
Authentic Teas, a boutique tea company based in Ontario, Canada, has launched a range of herbal teas sourced from Armenia. The teas are grown exclusively in the wild, without chemicals. The plants are then harvested and blended by hand using traditional methods, some of which were found in ancient Armenian manuscripts. The manufacturing takes place in indigenous village areas, where most of the economic benefits are returned to local artisans. The range has 6 varieties with blends of thyme, linden flowers, wild oregano and mint. A 1.75oz / 50g bag retails for approximately $11.
Starbucks has revealed plans to offer single-serve brewing machines to rival the popular Keurig system. Keurig, the most popular brand, currently holds more than 80 percent of the market share. The brewing machines are destined to make Starbucks and Seattle's Best coffee, and Tazo tea infusions. This comes on the heels of a previous agreement between the coffee giant and Green Mountain Coffee, maker of single-cups for the Keurig system, to sell Starbucks coffee and Tazo tea pods for those machines. On a separate note, Starbucks has signed a deal to supply its products to over 500'000 luxury hotel rooms across the US.
Ajiri Tea, a small tea company with a social mission of creating employment in Kenya, has been awarded the best black tea award in the 2011 North American Tea Championship. The tea, which competed against nearly 200 teas in 18 different categories, won for best brewed color, aroma, flavor and harmony. Ajiri Tea sells Kenyan tea to provide jobs for Kenyan women and pay school fees for orphans in western Kenya through the nonprofit Ajiri Foundation. The product packaging is handcrafted by local women from dried banana leaves. A pack of loose tea retails for $10, whereas 16 tea bags cost $9. Ajiri Tea is sold in nearly 200 outlets in the US. Other notable winners from the 2011 North American Tea Championship include Teagschwendner and Rishi Tea.
A Japanese tea company based in the UK has vowed to donate a percentage of its profits to help with relief efforts in Japan. Vitalife Matcha, a tea company that specializes in a Japanese green tea called matcha, will donate 25% of its profits over the next 4 months to the victims of the Japanese earthquake and tsunami. According to the company, the farms where it sources its tea have not been affected, yet the response to the initiative has been tremendous. Global Giving, the organization that Vitalife is using to donate their profits, have already helped to raise over £200,000 for the cause. Thousands of people have died in the disaster and thousands more are reported missing.
A former dentist is launching a ready-to-drink iced tea that can help prevent tooth decay. Tropical Breeze Beverages combines naturally caffeine-free rooibos tea with all-natural flavoring and xylitol, a key ingredient that prevents tooth decay. Xylitol fights the cause of tooth decay by significantly reducing bacteria that is responsible for increased acids in the mouth. Xylitol is naturally present in some fibrous fruits and vegetables, corncobs and stalks. The range, sold under Banks's Sun Tea brand, is available in banana, pomegranate, coconut and apple spice flavors. According to the manufacturer, there are no additives, preservatives or colorants in the tea.
Coca-Cola has finally bought out Honest Tea for an undisclosed amount, after having acquired a 40% stake in the organic beverage company in 2008. The move is seen as an opportunity for Coke to expand its presence in the ready-to-drink tea market, where it lags its main competitor PepsiCo. Since the beverage giant bought into the company three years ago, the number of retail outlets stocking Honest Tea has multiplied by five and now stands at 75'000. Its sales have tripled in the same period to reach $72 million. Despite the expansion, the company plans to continue to rely on "guerrilla" marketing tactics, which have been proven effective in the past. This strategy involves field marketing, innovative demos, genuine media coverage and a strong social media presence. Honest Tea will continue to operate as a separate business within Coke's Venturing and Emerging Brands unit.
One of the first American herbal tea companies, Good Earth Tea, is closing its main production unit in Santa Cruz, CA. The company, founded in 1972, is relocating to New Jersey and laying off 47 employees, according to the plant manager. Good Earth Tea was purchased in 2005 by a subsidiary of Tata Global Beverages, the world's second largest tea manufacturer. At the time of purchase, the buyer was committed to stay, citing the moderate climate of Santa Cruz as an excellent place to blend and pack tea. Six years on, only one employee decided to relocate.
The Federal Trade Commission has announced that Coca-Cola's deal to purchase Honest Tea would meet antitrust approval. The beverage giant bought a 40% stake in the bottled tea and juice company for $43 million in 2008, with an option to buy the remaining share this year. This allowed Honest Tea to benefit from Coke's nationwide distribution network. According to sources close to the matter, discussions are now under way, although no deal has been reached so far. This deal was the first major acquisition by Coke's Venturing and Emerging Brands unit, which oversees several other similar projects. Seth Goldman, the founder of Honest Tea, is expected to stay at the company after the purchase is completed.
TeaGschwendner, the largest gourmet tea retailer in the world, has decided to ditch its brick and mortar business in the US. The Germany-based company, with 145 outlets in nine countries on four continents, has 4 stores in the US - two in New York City and two in Illinois. The company was hoping to expand its reach by means of franchise stores. However, there appears to be insufficient interest in this business model from American entrepreneurs. Approximately 60 stores were planned to open until 2012. The US arm of TeaGschwendner will now concentrate solely on its online business.
Retraction and Apology: TeaGschwendner not leaving US tea retail market
Adagio Teas apologizes to TeaGschwendner and the tea community at large for recently publishing a story inaccurately indicating that TeaGschwendner is pulling out of the US tea retail market. In fact, it has come to our attention that TeaGschwendner is not pulling out of the US tea retail market and it continues to grow its brick and mortar business in the US.
Once Upon a Tea Cup, a tea store in London, Canada, is starting a luxury line of gourmet teas called LovaTea. The range, packaged in sleek steel tins, currently features 26 varieties including many flavored black, herbal and rooibos varieties and is expected to expand to 67. The company is also seeking support from celebrities to promote new varieties of tea in return for proceeds being directed to the charity of their choice. Their first charitable tea is in support of the Breast Cancer Society of Canada. LovaTea is available in select retail outlets in the US and Canada. Retail price for a 50 gram tin is between $6 and $8.
Adagio Teas is continuing its expansion into the retail market with a second store opening in Skokie, IL. The tea shop, located in the Old Orchard Mall, features a wide variety of gourmet tea varieties and creative tea accessories. The Old Orchard Mall underwent a $50 million in 2007 and is the third largest mall in Illinois. According to the company, the store is designed as a playground for tea, where customers are encouraged to create custom tea blends, brew samples of any tea available, and test tea accessories on the Cupping Table. Adagio's first store opened in Naperville, IL in October. Further locations across the US are planned for 2011.
Golden Temple, a tea and cereal manufacturer founded by a Sikh community in 1960s, has found itself in a legal battle over the use of the word "Yogi", which stems from the Sikh spiritual leader Yogi Bhajan. After selling its cereal business to Hearthside Food Solutions, Golden Temple has decided to focus exclusively on Yogi Tea brand, which has 50 employees in Oregon and about 100 employees in Europe. However, the widow of Yogi Bhajan is suing Golden Temple over the use of Yogi trademark. The widow considers that as a successor to her husband’s estate, she controls the trademarks used by or connected with her husband, while Golden Temple says that it owns the rights to Yogi trademarks. If she prevails, she plans to license the brand to another tea manufacturer.