Innovation: Tea Untied

Beverage retailers from Acosta and Dunkin’ Donuts to Starbucks and Peet’s Coffee & Tea feature wholly owned house tea brands. Chicago-based Fairgrounds Coffee & Tea is pioneering a more open way to showcase specialty tea.


Michael Schultz prizes selection over gross margins. “Choice is what matters,” he says, and when he opens the first of several Fairgrounds Coffee & Tea locations later this month he will also be opening the doors to a number of tea brands, none of which he owns.

The strategy follows a trend pioneered in the craft beer segment, which early-on confronted the fact that most bars and restaurants offer brands “tied” to a very narrow list of brewers and distributors. These so-called tied houses have given way in recent years to the “public house” which offers a larger selection of beers from a number of brewers.

Schultz is doing the same with coffee and tea.

He told Crain’s Chicago Business  that at the Fairgrounds cafes in Chicago, for instance, “customers will be able to choose from a roster of pour-over coffees from homegrown roasters such as Dark Matter or Metropolis and national purveyors like Stumptown Coffee Roasters of Portland, Ore., Verve from Santa Cruz, Calif., and Colectivo Coffee of Milwaukee.”

“Tea is equally as important as coffee,” Schultz told World Tea News. He explained “the same multi-roaster concept we adopted for coffee applies to hand-crafted tea.” Schultz is training the staff to put tea on equal footing – literally by creating expresso-matcha blends and by insisting the cooks in the kitchen work with tea as an ingredient.

“We have a rather massive selection of tea offerings and choice but only two tea providers to start. This will evolve as we lock down our ability to execute the concept,” said Schultz

Sweet matcha lemonade and Persian black tea poured over fresh mint and sugar cubes are examples of his specialty tea selections at Goddess and The Baker, a café concept Schultz co-founded in April 2015. Masala is offered hot, iced, or as a frappe with green teas such as organic Maghreb Mint, Jade Cloud, or Jasmine supplied by Rishi Tea. There are traditional Arnold Palmers and cold brew sparkling teas and tonics. “We are thrilled with Rishi’s partnership, commitment to excellence, and number of high-end offerings,” he said.

At Fairgrounds we have a specialty beverage bar, “I call them tea elixirs,” said Schultz. “We have tea on tap (sparkling) and a cocktail-focused bar,” he said.

The first two Chicago locations will open this spring immediately followed by downtown Los Angeles at the reinvented Mayfair Hotel. Later in the year stores in Houston, New York, Miami, and Minneapolis will follow, six in all by year-end. In 2018, he intends to open eight more locations, he said. The venture is owned by Schultz’s holding company by Coffee & Tea Bar Holdings, which is also the parent company of Infuse-Coffee and tea bar hospitality which supplies, operates and fuels office cafes at locations such as Yelp!, ConAgra, the Chicago Board of Options Exchange, and Regus. “These are some of the coolest and most successful companies throughout the country,” said Schultz.

The 40-seat Chicago store at Bucktown along Milwaukee Ave. is equipped with six automated pour-over machines and eight taps that customers can use to draw kombucha and matcha. Schultz, a veteran food service manager, worked at Ruth’s Chris Steak House and at Wolfgang Puck restaurants. He said that full kitchens at Fairgrounds will serve breakfast, and fresh-made salads and sandwiches at lunch and dinner, with smaller locations featuring grab-and-go items.

The stores will also feature coffee and tea wall with many choices available for purchase as well as a selection of handmade pottery drinking vessels and Fairgrounds branded wearable merchandise.

The innovation is choice.

Guests will have a choice in teas and how they are made. Shop owners will also have a choice of local tea brands and regional favorites. Palettes are becoming more discerning, he said. “Choice will be disruptive to the industry,” observes Schultz. The 1,962 square-foot floor plan is open, not elitist, he told Crains. “This is a premium product, yes, but we’re trying to do it at an approachable price,” he said.

“Tea is an afterthought in most cafés around the world,” he says.

“Tea is every bit as interesting as coffee and at Fairgrounds it will be incorporated throughout the menu, including the food and bakery program,” he said.

Source: Crain’s Chicago Business