Tea Growth in Specialty Grocery

Janis Grover

Americans overwhelmingly buy their tea where they shop for food. Only 7 percent report buying packaged tea in tea houses and coffee shops.

Specialty tea is a very appealing category in niche food markets, explains Janis H. Grover, a marketing, new product development and sales professional presenting at this year’s World Tea Expo.

“Retailers use specialty tea to bring excitement and world trends to their stores,” she says. “Tea is an incremental purchase. Tea consumers can always be enticed to buy a new flavor and variety,” she explains.

“Retailers are always looking for ways to add to the market basket. Something unique,” she said. According to Grover selling tea starts a chain-reaction that leads to buying démarrage sugar or tea biscuits, clotted cream and pastries, adding to the total purchase. Tea drinkers exhibit greater price elasticity once they move beyond orange pekoe, she explains. “They do not directly compare prices as they might with condiments,” she said.

Grocers may be enthusiastic about the category but landing your brand on the shelf is harder than it sounds.

The Tea Spot, founded by Maria Uspenski, is an example of a specialty tea brand that successfully navigated the daunting gauntlet and layers of distribution in the U.S. specialty retail market. It took her 12 years.

The Boulder, Colo.-based firm expanded into grocery shortly after launching the company in 2004, recalls Uspenski.

“We collectively were looking to grow way too big, way too fast,” she said. The line failed and that led Uspenski to rethink her retail strategy. During the years that followed, she concentrated on developing wholesale clients and building an online presence. Two years ago, she once again worked her way into specialty retail with 10 SKUs of organic tea.

2017 consumer survey by German-based market research firm Statista found that 80% of U.S. tea drinkers shop for tea in supermarkets. An additional 21percent say they buy from discount stores and 12 percent from department stores (including big-box retailers). Only 14 percent of tea drinkers purchase their product online (10 percent identified Amazon as their supplier) and 1 percent by mail order catalog (kudos to Upton Tea).

In the 1980s Grover was product development manager at The Great Atlantic & Pacific (A&P) Tea Co., launching 500 SKUs to create the first premium store brand in the U.S. In recent years she has mastered an understanding of the key regulations, logistics, label requirements, pricing, promotional strategies, and retailer fees necessary to successfully navigate the U.S. specialty food markets.

Understanding the roles, services and margin requirements of importers, distributors, wholesalers, brokers and retailers enables her to assist brands with the difficult transition from tea garden to top shelf. Successful entry into the U.S. depends on developing a comprehensive blueprint and creating a strategy to execute this plan, says Grover.

Brands with a trendy profile stand out in an aisle with lots of duplication and big selections.

“In my experience the stores will find space for a new attractive, creatively packaged specialty teas,” she said.

Grover says she is “excited to be returning as a speaker after attending World Tea Expo last year. I’m looking forward to tasting new flavors and meeting new potential suppliers focused on tea and a community of tea people interested tea retail,” she said. “I have encouraged everyone I know in the tea and beverage world to attend as an essential part of their schedule for the year,” she said.

Marketing & Retailer SkillsWorld Tea Expo logo
Selling Tea in the U.S. Specialty Food Market
By Janis H. Grover, President
Grover Global Food Marketing
11:30 am – 12:40 pm – Tuesday, June 12