The rise of the tea shop

08 August 2007 by
The rise of the tea shop

Despite the UK being a nation of tea drinkers, there has been nonationwide chain of tea outlets since the heyday of the Lyons CornerHouses. But that may soon change. Janet Harmer reports on two operators with big plans for their own distinct national groups of outlets

Until recently, your best chances of getting a good cup of tea outside your own home have been confined to upmarket luxury hotels or to one of a number of independent tearooms dotted around the country. Bettys Café Tea Rooms, for example, with six outlets, is world-renowned and has been phenomenally successful during its 90-year history, but it has never spread its wings beyond Yorkshire.

The situation, however, may be changing. Spurred on by the success of the leading coffee companies - such as Starbucks with 540 outlets and Costa Coffee with more than 570 units - and a desire to offer the consumer on the high street a cup of decently brewed tea on a consistent basis, there are two companies each on the verge of launching a chain of tea shops across the country.

The aptly named Tea opened its first outlet in Paternoster Square, overlooking St Paul's Cathedral in the heart of the City of London, in May this year. Daren Spence, a 33-year-old chartered tax accountant, launched the business as a response to his frustration at not being able to buy a decent cup of tea on the go. "It was always a game of chance," he says, "with the tea ending up being either over- or under-brewed, and the perennial problem of not knowing how to discard the tea bag."

Whole leaves

With the support of tea consultant Jane Pettigrew, a member of the UK Tea Council, Spence has formulated a system to deliver high-quality tea from whole leaves in 90 seconds. "People use tea bags for convenience, but they don't necessarily produce the best quality tea," he says.

For all the teas it offers, Tea uses 340ml of water per cup, filtered at source and aerated to keep it lively and moving. However, different temperatures of water are used for different teas - 80°C is the perfect temperature for delicate white and green teas, while more robust teas require hotter water. Oolong tea is brewed with water at 95°C and black tea with water as close to 100°C as possible without producing steam.

White and green teas generally require a brewing time of around 3-4 minutes, but Spence ensures that it takes no longer than the target time of 90 seconds by adjusting the amount of loose tea, using more in the case of the delicate varieties.

Costs per cup, for both take-in and take-away tea, range from £1.75 for English breakfast up to £3.25 for the relatively rare Silver Needle white tea.

The choice of teas is extensive. There is a range of 11 black teas, three oolong, four green, five white, seven infusions and 11 so-called super teas (a mix of herbal and fruit infusions combined with other natural ingredients intended to help ease the stresses of modern life).

The best-selling beverage at the moment is English breakfast tea (a blend of Assam, Darjeeling and Ceylon), followed by Earl Grey, Assam and Moroccan mint.

Unique blends

Tea buys all its teas vacuum-packed at source through an importer based in south London, and all are branded with the distinctive Tea logo. The super teas - with names such as Puritea, Tranquilitea and Eternitea - are unique blends for the Tea brand. All are available in 150g tins or 100g packs, as well as a ready-brewed beverage.

The look of the first Tea outlet, on which all the others will be based, is intended to be that of a Victorian tearoom with a twist, with green tiled walls reminiscent of an old pantry. While the scrubbed wooden floors, wooden tables and chairs present a rustic image, there is nothing twee about this concept it is bright, fresh and contemporary.

Feedback from customers has been positive, with 50-60% of business now being made up of regulars. "We're getting a really diverse mix of people - workmen at St Paul's, priests, mums and City business people," says Spence. He hopes that this initial enthusiasm for Tea will allow him to expand the concept, once the first unit is on target to achieve an annual turnover of £350,000-£400,000. During its second month of operation, Tea had a turnover of £4,500-£5,000 per week.

"Once we are in a position to start expanding," Spence says, "we hope to raise more finance to open 10 to 15 units in three years. We'll probably initially look at London locations such as Canary Wharf, the West End, Covent Garden, Notting Hill, St John's Wood and Richmond."

Looking further ahead, Spence says that he envisages one of three possibilities - an outright sale of all units, the setting up of a franchise business, or a brand rollout across the country financed by a launch on the Alternative Investment Market.

Most tea suppliers think that Spence's plans to create a national tea chain are well timed. Even though we drink a staggering 165 million cups of tea each day, it seems that the current growth in public awareness about the health benefits of drinking tea, combined with the increased number of speciality teas now available, has created a renaissance in tea-drinking.

"With the coffee market reaching saturation point and a general move towards a healthier lifestyle, tea is definitely in vogue," says Andrea Stopher, senior trade marketing manager, out-of-home, for Twinings. "The old-fashioned image of tea is now a thing of the past, as a new audience of younger drinkers are experimenting with more premium teas."

Whole experience

Sue Jones-Smithson, the channel marketing manager for Typhoo, believes that while it may take some time to establish a national tea chain, it is certainly possible. However, she stresses that it is important for operators to think about the whole tea experience. She says: "It's as much about the range offered, ensuring this is exciting enough for consumers, as it is about the ritual of tea making - the aroma, appearance and taste."

At the Drury Tea and Coffee Company, sales director Marco Olmi says that he is now talking to many individuals who plan to open independent tea shops - something that wasn't happening two or three years ago. "Maybe the time is right for a national chain of tea shops," he says.

Husband-and-wife team Kitty Hope and Mark Greenwood have no doubt that the time is long overdue for the rebirth of such a concept. Through a joint venture they have formed with restaurant chain Ponti's, they have created British Tea Rooms, and plan to open the first of a nationwide chain, serving both take-away tea and tea to enjoy at the table, on London's Marylebone High Street at the end of September.

Hope says that she does not understand why no-one has spotted the gap in the market for a national tea chain serving a quality beverage, as she believes that it is something that people want.

To this end, she says: "We shall be providing damn good tea - nothing poncy, but good, sensible, solid blends that will push all the right buttons. And that will include everything from a cup of builder's tea to Dragon Well green tea."

A custom-made tea engine is being patented and will be used to draw water at different temperatures suitable for different teas. A range of 20-25 teas will include such offerings as chocolate tea, Devon tea (which tastes like fudge) and Victorian rose garden. All teas will be under British Tea Rooms' own brand, blended by a master tea blender, and will cost about £4 for a pot for two (holding four cups). The take-away price has yet to be decided.

While both Tea and British Tea Rooms will offer their own branded teas, Peter Haigh, brand development manager for Tetley out-of-home, says that the secret behind tea sales for the caterer is that consumers on the move tend to look for the brand that they drink at home. "Therefore," he says, "establishments need to ensure that they highlight the brand of tea that they serve, both at the service point and externally, to draw customers in."

Unremarkably, the consensus is that quality will be the key to the success of a national tea chain. Susan Gregory, category marketing director of Unilever Foodsolutions, whose brands include PG Tips, Scottish Blend and Lipton, suggests that if the consumer's negative perceptions of poorly served tea - often using an unbranded tea bag in a cup, with UHT milk - are to change, operators must exceed the expectations of consumers by serving a range of high-quality teas in an appealing way. "This will not only build confidence and trust in drinking out-of-home tea," she says, "it will raise the standard of tea across the whole industry, increasing profit potential for all outlet types."

Selling point

Elaine Higginson, managing director of First Choice Coffee, which owns Down to Earth tea, says that it is important for caterers to remember that it is simple and inexpensive to make a really good cup of tea at home. As a result, she says: "A tea chain would need to have a really strong unique selling point to attract customers. It would need to be an experience that couldn't be replicated at home."

Because of this, the food offering is a key element of the whole experience, and both Tea and British Tea Rooms have decided that it is dishes with a strong British feel that work best with tea.

In the case of Tea, this means porridge and toast at breakfast, teacakes and crumpets for snacks, ham and cheese sandwiches (using quality British ingredients) at lunch-time, and scones, clotted cream and jam in the afternoon. Meanwhile, traditional nursery food will be the order of the day at British Tea Rooms, with the likes of shepherd's pie and steak and kidney pie followed by knickerbocker glories and banana splits on the menu.

So, is the tea kettle truly on the boil? The chairman of the UK Tea Council, Bill Gorman, has no doubt that the demand for tea across the UK is stronger than it has ever been, but he voices some scepticism about a national tea chain.

"The operating costs of running a decent tearoom in the likes of London or Manchester are so prohibitively high that operators will need to offer much more than a wonderful range of teas," he says. "A full range of other beverages - including coffee and hot chocolate - will need to be available, as well as a good range of food throughout the day."

He adds: "Tea is enjoying an incredible renaissance and is at the point wine was 30 years ago. While people still love traditional brands, there is a genuine curiosity about green, white and single-estate teas."

He concludes: "The economics may be prohibitive to establish a national chain, but we will certainly be rooting for any company that aims to achieve it."


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