Capital Teas: Five Generations

WASHINGTON, D.C.

Capital Teas operates five shops near Washington, D.C. with a heritage that spans five generations in the specialty tea trade.

Co-founder Manelle Martino, COO and president of Capital Teas, is the great-great granddaughter of Francis Van Reyk, a pioneering Dutch tea planter in Ceylon (now Sri Lanka).

She and her husband, CEO Peter Martino, opened their first shop in Annapolis, Md., in Septemter 2007.Capital Tea

Today, 60 percent of Capital Teas’ revenue comes from tea sales with 40 percent from tea ware, according to Peter Martino. Ninety-three percent of that revenue comes from brick and mortar retail, with only 5 percent from online sales.

“People want to stop and smell the teas,” he says, quoting the company’s slogan. Capital Teas does not sell food but does sell tea by the cup in two of its stores and provides samples as “a means of helping people make decisions. They can see the tea, smell the tea and they can taste it.”

Each shop has a “sniffing wall,” featuring rows of loose teas in glass jars that allows potential customers to get a whiff of the various types of green, black, white, oolong, herbal, mate, fruit tisane and rooibos.

That multi-sensory experience is why he doesn’t anticipate substantial  online growth. “Online sales are usually repeat customers. That’s more typical than a new buyer just happening on our website.”

The final 2 percent of Capital Teas’ revenue comes from its new wholesale business, supplying tea to high-end restaurants and hotels.

“We just started and we’re making headway,” Peter Martino says, noting that “in boardrooms they’ve gone up to Starbucks but tea is still not high quality. I’d like to see it rise at least to a full-leaf tea product.”

Overall, he says, “we are expanding quickly. Our growth rate is about 125 percent per year. We intend to double our size every year.”

The Martinos sees plenty of room to grow. “The U.S. is 22nd in tea consumption in the world,” Peter Martino says, and that market is growing fast.

To reach that market, “we try to educate the American tea palette,” he says. Capital Teas lists 200 teas online and about 120 varieties in its stores to give customers a representative sample. “We want to give choices. We have everything from the connoisseur level to a tea for somebody who has never tried tea before.”

“Our target audience is the American public. We’re not catering to one segment. We’re not snobbish, not rigid,” he says. “Eighty percent of the teas that are sold are flavored, because that’s the way the American public likes its tea.”

Capital Teas offers a starter tea set to introduce people to tea, but, more importantly, it has a carefully trained staff.

It takes two to four weeks to train each new staff person. “During that time they are trained on our teas and on customer interaction, on the ways we want them to approach people,” Peter Martino says

Then, “they have to take a test. I wrote the test myself. It’s 200 questions long,” to make sure the person thoroughly knows the types of tea and the best brewing methods. “Our sales process is not: `Would you like some fries with that?’” We dive down to get to the wants of the person” visiting the shop.

The Martinos had varied careers before starting Capital Teas.

Manelle is a graduate of Columbia University, a former advertising and media sales associate and an accomplished singer.

Peter is a graduate of the U.S. Naval Academy and Georgetown Law School, a former nuclear submarine officer, and an entrepreneur who has founded three companies

“While I was studying for the bar exam, we started Capital Tea. I had been studying tea for a year.  Once we perfected a business model, I left law.”

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