What is in this article?:
- Portola Coffee owners to launch tea bar concept
- Growing tea culture in the U.S.
Seventh Tea Bar will use unique brewing methods to serve teas from around the world
Growing tea culture in the U.S.
The announcement of plans to open Seventh Tea Bar comes on the heels of Starbucks’ deal to acquire the Teavana tea retail store for $620 million. Like Starbucks’ chief executive Howard Schultz, Duggan sees an opportunity to tap into the estimated $40 billion tea market, which is seeing double-digit growth.
Tea is the second-most-consumed beverage in the world, after water, and Duggan contends that there is a growing culture of tea in the United States, especially among the young.
With the acquisition of Teavana, a 300-unit mall-based retail tea chain based in Atlanta, Starbucks plans to add tea bars to those units and grow the brand around the world, both in and outside malls. Teavana stores have an average unit volume of nearly $1 million with a $40 per person check average.
Last weekend, Starbucks also opened its first Tazo Tea concept in Seattle, another tea bar brand the Seattle-based coffeehouse giant may grow, depending on how it is received. After acquiring Tazo in 1999, Starbucks has grown it into a billion dollar brand.
Duggan said he’s not worried about Starbucks’ planned domination of the tea business and pointed out that its domination of the coffee category didn’t stop him from developing Portola. “The bottom line is that, if Starbucks opened right next door, I wouldn’t lose a night of sleep because we’re really different,” he said.
Portola, which opened in May last year, has struck a chord with those interested in an elevated coffee experience, Duggan said. The concept has made a profit over the past three months and sales are increasing monthly, though he declined to offer details.
Consumers, he predicted, will be even more eager to “geek out” over tea. “We’re interested in pushing this because, even more than coffee, it’ll be in demand anywhere and everywhere,” said Duggan.
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