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In the aisles, a new twist on tea emerges

Tea isn't a category just for grandma anymore. It's sexy, exotic, upscale. So let's start selling it that way

Loblaws MLG2 tea-0213

On a dreary January afternoon, a young woman pushing an orange grocery cart halted in front of a wall of black tea tins, squinting at their grey and lime-coloured labels. “How can I help you?” asked a cheery female clerk behind the counter. “I’m looking for something for my sore throat,” came the reply.

The clerk didn’t hesitate. She quickly pulled several tins of loose-leaf green tea from the wall (“because of its cleansing properties,” she said), opened their lids and offered the young woman a sniff. Two minutes and three tins later, the customer settled on a 50-gram pouch of Green Tea Sweet Lemon and an infuser to go with it.

“A good choice,” the clerk said with a smile.

This friendly exchange is typical at the Tea Emporium, a small chain of specialty tea stores in Toronto. But what made this particular sale unusual was that it happened not at one of the Tea Emporium’s four cosy, standalone locations, but inside a giant Loblaws where a Tea Emporium counter (pictured above) has been permanently stationed for more than a year.

The arrangement may be one of a kind; neither the Tea Emporium’s owner, Shabnam Weber, nor Louise Roberge, president of the Tea Association of Canada, can think of another grocery store in Canada that hosts a similar specialty tea store. But it may be a portent of things to come.

Supermarkets are still the runaway No. 1 destination to buy tea across Canada. But specialty shops, such as the Tea Emporium, David’s Tea and Teavana, as well as online purveyors, are hot on their heels. Though grocers today are stocking more specialty teas, merely squeezing another facing on the shelf may not be enough to sell more products.

Perhaps it’s time to rethink the tea aisle entirely–how it’s merchandised and how it’s sold. The ultimate answer, some believe, is to treat tea as a marquee category–such as wine or cheese–with specially trained staff and even special counters such as the one in Loblaws. The argument for a new strategy is clear: By channeling customers’ inner tea aficionado, stores can capitalize on an already hot category and sell more.

The average tea aisle is a confusing place for shoppers. There are loose-leaf teas, standard bags, pyramid bags, unpronounceable rooibos and pu’erh teas, and promises of “serenity” and “revitalization.” With nary a sign to be found educating consumers, tea packages have to do all the work.

The problem, unfortunately, is that well-trained staff at specialty tea stores are happy to talk up their products. And, as more such shops open, they’re drawing customers away from the supermarket.

Tea shops are sexy and skew young Though only 10 per cent of tea in Canada is bought there (compared to 53 per cent at grocery stores), tea shops are growing in popularity. Some 22 per cent of Canadians say they buy tea from specialty stores “more often” than a year ago, according to a recent NPD Group study.

No wonder Loblaw adopted the “if you can’t beat ’em, join ’em” approach for its flagship Toronto store. The company’s deal with the Tea Emporium allowed the tea shop to set up a mere 10 steps from the regular tea aisle, which carries the usual selection of bagged Tetley, Twinings and President’s Choice.

It’s an unusual marriage. But Weber, owner of the tea store chain, says the concept behind it is tried and true. “What [Loblaw has] done is they’ve put an expert behind a product. It’s no different than the fishmonger behind the fish counter or the cheese expert behind the cheese counter.”

Of course, not all grocers have the budget or square footage to accommodate a specialty tea store. But bringing in a tea expert, known as a sommelier, might be an effective way to help customers navigate the tea aisle.

And there’s a bonus: “The more education the consumer receives, the more interested they are in moving to the next level,” says certified tea sommelier Linda Gaylard. In other words, they’ll buy more exotic, and likely expensive, teas.

Last year’s big story in the hot beverage category was single-serve coffee pods and machines. Data from the Coffee Association of Canada shows sales ballooned more than 160 per cent during the past year, reaching $239 million.

Now, a hit sequel may be in the works as people who bought Tassimo and Keurig machines to make coffee discover they can also be used to brew great-tasting tea.

“Pods are going to be the next big thing,” says the Tea Association’s Roberge. “It’s quicker and easier to prepare. These machines, I don’t think they are going away.”

An NPD study supports her prediction. Last year, single-serve tea pods were the fastest growing tea format. In addition to the obvious convenience, many users report pod tea tastes better.

For retailers, there’s just one hitch: Consumers are increasingly buying tea pods from single-serve manufacturers’ websites.

To defend their ground, grocers should place a wide variety of teas next to their coffee offerings. Keurig’s tea K-cups, which include classics such as Twinings’ English Breakfast and exotic flavours such as Timothy’s Orange Indulgence White Teas, are popular choices.

Standard bags remain Canada’s most commonly used at-home tea format. But over the past few years, bags have faced steep competition from loose-leaf products.

According to NPD, almost half of Canadian tea drinkers drank loose-leaf tea at home in 2012. And 18 per cent said they used the format “more often” than a year earlier.

The reason for the increase, says tea sommelier Gaylard, is today’s tea drinkers are “more adventurous.” Exotic teas (such as Teavana’s Gyokuro Imperial Green Tea), bizarre blends (David’s Tea’s Jolly Jellybean contains rooibos leaves and jelly beans) and strong flavours (Tazo Tea’s Orange Blossom) satisfy their desire to experiment.

Specialty stores tend to capture tea’s early adopters. But research suggests grocery stores can play a leading role in bringing loose leaf to the masses through effective merchandising and product selection.

The tea category has come a long way in the last few years. Once considered the boring drink-of-choice for dear-old grandma, tea has found a new market: adventurous, health-conscious millennials willing to pay a premium for quality products.

Unfortunately, many tea aisles are “old and stale,” says Bryan Schmitt, head of sales at Alokozay Tea Canada. All the experts, including Schmitt, agree on two quick, effective solutions: better staff training and more sampling.

Demos explaining how to prepare tea can also help. “If people try it, they go and buy it,” Roberge says. “Grocers should learn from the customers. What are they responding to? What do they like?”

At the Tea Emporium, for instance, customers’ all-time favourite tea is Cream of Avalon, described by Weber as a “creamy Earl Grey.” That snowy January morning, a clerk at the Loblaws location said she was completely sold out of the product. Luckily for inquiring customers, however, she was ready with about 18 alternative recommendations.

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