AirTalk for October 24, 2013

With new 'tea bar', Starbucks aims to make steep gains in $90 billion global tea market

A Starbucks coffee cup and beans are see

PAUL J. RICHARDS/AFP/Getty Images

Can Starbucks mainstream tea as it has with coffee?

Starbucks is opening its first “tea bar” in New York city today, selling traditional and novelty tea beverages like a Spiced Mandarin Oolong tea and carbonated teas along with pastries and other goodies. A cup of tea at Teavana Fine Teas + Tea Bar will set you back anywhere from $3 to $6.

A second location is slated to open in Seattle in November. The ultimate goal is to have at least 1,000 more Teavana tea bars in North America in the next five to 10 years.

Starbucks’ push into the tea market comes a year after it bought Teavana--an Atlanta-based specialty-tea retailer with about 300 stand-alone stores--for $670 million, the company’s biggest acquisition to date.

The hope is to transform Starbucks into more than a coffee company. It bought bottled juice company Evolution Fresh in 2011 for the same reason.

Can Starbucks mainstream tea the way it has mainstreamed coffee? What’s the marketing and branding strategy for tea? Can you see yourself ordering a grande Oolong instead of an iced Frappuccino?

Guests:
Jenny Zegler, beverage analyst at Mintel, a global market research firm. The firm released a report looking at the tea market in July 2013

Sasha Strauss, Founder, Innovation Protocol, a management consulting firm focused on brand marketing


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