Specialty tea shops are emerging from a niche market into the mainstream, and Starbucks CEO Howard Schultz is set on taking advantage of this trend and making Americans into tea drinkers.
His plan is to make Starbucks’ Teavana brand the face of premium tea across the country in the same way Starbucks became the face of premium coffee.
The first Teavana “tea bar,” an expanded version of the existing Teavana stores, will open in New York City on Thursday. These stores will include pastries and small plates, similar to Starbucks’ cafes.
The tea bars are a bit more expensive than the cafes, though, with drink prices ranging from $US3 to $US6, and food prices from $US3 to $US15.
Starbucks’ announcement comes at a time of tremendous growth in tea shops across the country. Peter Goggi, Executive VP of the Tea Association of the USA, told Business Insider that there are an estimated 4,000 specialty tea shops across the country. The American tea industry is valued at over $US11 billion, with $US1.73 billion coming from the specialty niche, according to Goggi’s 2013 projections.
That represents an estimated 10 to 12 per cent increase from last year.
Starbucks bought Teavana for $US620 million last Dec., and has been phasing out their Tazo tea brand in some Starbucks locations. Next month, the company is converting its Tazo test store in Seattle’s University Village into the second Teavana Fine Teas + Tea Bar.
A Starbucks representative confirmed that more tea bars will pop up in American cities in 2014, but would not specify how many.
The Tea Association’s Goggi thinks that the American tea market is now where the country’s wine market was during the 1960s, when consumers started to care more about country of origin and type of grape used in producing various wines. Now, he said, many more tea drinkers want to know where their tea is coming from and how it was grown.
Goggi thinks that current (and future) tea drinkers will not necessarily replace coffee as their primary caffeinated beverage, but will instead be swapping sodas and juices for premium teas — a result of millennials’ preference for healthy and specialty beverages.
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