Having a diverse, high-quality and visible tea offering is a prime opportunity to increase sales, but this lucrative revenue stream is often overlooked by coffee shops says Oscar Woolley, Co-Founder of Suki Tea
You would not serve instant coffee in a coffee shop, so why would you serve low-quality tea?
Coffee shop premiumisation is not just about moving from generic teabags to speciality loose leaf teas, it is about elevating the whole experience and ritual to something that is much more than just transactional. As a coffee drinker, my local coffee shop ritual revolves around receiving the same standard of beverage every time. But the ritual for tea is different. Ninety-six percent of people in the UK drink tea at home and changing that has been difficult, in part, due to a lack of quality tea offered in coffee shops.
Many people neglect their tea offering and treat it as a secondary product – but it does not have to be that way
You would not serve instant coffee in a coffee shop, so why would you serve low-quality tea? The opportunity is to raise your game with tea to meet the standard of your coffee. There has traditionally been a price ceiling on tea of around £1.90-£2.00. But we have found that giving consumers an individualised quality tea experience, by letting them brew it just how they like it, generates around an extra £0.60p cash margin. A lot of operators are willing to take a lot less margin for tea, which I have never understood. After all, the overheads are all the same, yet many people neglect their tea offering and treat it as a secondary product – but it does not have to be that way.
Spoilt for choice
Consumers are demanding more options and quality than ever, and they have so much information at their disposal. Suki Teas offers a core range of 12 teas and that is just the sweet spot. It might sound like far too much choice, but it makes a lot of sense. To give some context, in 2012 Starbucks bought Teavana for $667m. But Starbucks did not pop up Teavana stores everywhere, they just became a tea store as well as a coffee shop. Today the world’s largest coffee chain offers 16 tea choices in three different sizes.
Coffee shops should look at having a core tea menu of a hearty Breakfast or origin-specific Darjeeling, Green, White and Oolong, complimenting the range with fruit tisanes and herbal infusions. Of those, you could add value by offering three as cold brew and have a seasonal special as well, such as a detox or Matcha. Suddenly having 12 teas on your menu does not seem like so many.
Be aware when choosing your Matcha: Japan only exports 1.7% of its entire produce, yet there is five times more Matcha on the market
In 2008, well ahead of the curve, Suki Tea launched their ceremonial grade Organic Japanese Matcha. Today, you can get Matcha in Costa Coffee, Starbucks, Caffè Nero and all the independents and its popularity has created a trend for other latte-style drinks. Superfood ingredients such as beetroot and turmeric are also now hugely popular, but we are also seeing the increased popularity of moringa tea, which can be mixed with Matcha to make a healthy latte-style drink.
Be aware when choosing your Matcha: Japan only exports 1.7 percent of its entire produce, yet there is five times more Matcha on the market. Always look for Japanese Matcha (preferably organic), from a trusted supplier.
Know your matcha: there is five times more on the market than Japan exports
Tea at first sight
We performed some calculations based on a 25-seater café selling 25 cups of tea a day and predict there is an extra £5k of profit there. But many coffee shops do not adequately promote their tea offering and one of the most effective ways to improve sales performance is to simply increase visibility.
We also performed an experiment at a renowned café in Dublin where we removed all the coffee signage and instead listed 12 teas and displayed them beautifully behind the counter in jars. The result? Six months later coffee sales were the same and removing the signage did not impact on sales. The tea sales increased significantly, however, rising from 25% to over 40%.
Your tea offering should be something you are engaged with and proud of, to match the effort and focus on quality that you have with your coffee and food. Having a wide variety of high-quality, clearly visible and well-promoted teas served by trained and educated staff will add up to customers making that all-important tea purchase – and increasing revenues at your hospitality business.
Oscar Woolley is Co-Founder of Suki Tea
|Project Tea UK is Allegra World Coffee Portal’s comprehensive study on the challenging tea out-of-home market in the UK, featuring:
- 100+ in-depth interviews, surveys and consultations with key industry personal within the coffee shop industry
- 2,000+ online surveys with UK consumers, conducted via the Allegra Insights online survey platform
- Field research including site visits, data gathering and pricing analysis of beverages
- Desk research across company websites, published accounts, industry associations, trade press and news articles