Innovation in the Tea Industry

Excerpted from the World Tea Expo presentation available here.

The Museum of Failure opened in Helsingborg Sweden this month, a monument to the world’s worst innovations.

Organizers there assembled a celebration of the absurd that documents hilarious commercial failures such as Colgate’s beef lasagna and Harley Davidson’s leather-perfume. Tech holds a special place in the gallery with Google Glass, the Apple Newton, SONY Betamax, and a digital Kodak camera on display along with the oddly shaped N-Gage, Nokia’s game-console smart phone shaped like a clam-shell taco.

Their slogan: Learning is the only way to turn failure into success.

Aerosol tea is my nominee.

Introduced last year in the U.K., the product claims it will eliminate the 370,000 metric tons of tea bags sent to landfills. Just spray the “No More Tea Bags” preservative-free concentrate into a mug, add hot water. Enjoy up to 20 cups with no soggy tea bags, no messy leaves. The erstwhile inventor is pictured in his basement filling environment-friendly cans with harmless-to-the-atmosphere gas. Well marketed, there was a bright flash of media attention… followed by a predictable backlash from those who saw the claims as greenwash. This was followed by a coup de grâce delivered by bloggers who hated the taste, waste, mouthfeel, color, odor, conveyance, and metallic aftertaste.

World consumption of tea has doubled to more than 5 billion kilos. Global growth has topped 60 percent in recent years. Consumers today spend more on quality tea. Young and old both embrace the artisan production and nuanced taste of tea while praising its healthful properties. Yet there are troubling signs the retail segment is in need of innovation.

  • Consumption of artisan processed loose leaf tea is not accelerating in traditional retail channels – in fact it’s flat.
  • The suburban malls where millions first sample fine tea are experiencing significant declines in foot traffic – the lifeblood of brick & mortar retailers.
  • Chain expansion has stalled in the U.S. and Canada where DAVIDsTEA and Teavana are still experimenting to achieve sales per square foot and same-store sales increases commonly reported by coffee shops (many of which are profiting handsomely from selling tea).

There are conventional remedies to apply:

  • Make tea retail selections more traceable and provide authentic stories on sourcing
  • Make stores into destinations, not sterile cookie-cutter outlets.
  • Commit to sampling as studies show that sampling leads to sales.

One thing is certain ― tea in spray cans is not the answer.

During the past year I spoke to many inventors and innovators in preparing for this talk. I know that what I say will be of benefit ― but first I need to dispel many of your notions about innovation.

I hope to shift your understanding from the glowing lightbulbs of “genius discovery” and “magic thinking” to systematic problem-solving that is more practical and powerful. My advice: Discard any project that does not increase the number of customers drinking tea or increase the amount of tea drinking among existing customers.

The goal is to discover innovations that move the needle by increasing beverage occasions ― everything else is a distraction.

Beginners Mind

Picture a gong fu setting.

The accomplished tea retailer approaches the Zen master of tea innovation saying, “I have been in business many years, yet things are changing and I have concerns. Please teach me all that you know about innovation in tea.”

The master nodded, and began filling a cup of tea. He continued to pour until the cup over flowed, spilling over the brim ― yet he continued.

The tea retailer watched for a few moments and then, in exasperation, said: Stop, it is overfull, no more will go in.

The master replied: “Like this cup you are full of your own opinions and speculation. How can I show you the Zen of innovation unless you first empty your cup?”

In his book Zen Mind, Beginner’s Mind Shunryū Suzuki writes that to see the unexpected, expect nothing.

A very important aspect of innovation is to always retain a beginner’s mind.

Wine Infused Tea

At Teasters in Lubbock Texas, Rick Austin serves high quality thrice-steeped tea in his morning drive-thru. He can deliver a hot cup in 72 seconds which significantly increased his morning business between 40-45 percent. Tea represents 30 percent of morning sales. That’s moving the needle. Having improved the breakfast day part, he turned his attention to evening. He is now experimenting with recipes to extract the essence of tea into wine. Think chardonnay, which is an oak-infused wine. To make these wines he places a suitable loose-leaf tea in the BKON brewing chamber. The wine is agitated in a vacuum. The result is an extraction at the molecular level with a very different taste than simply mixing tea and wine.

Fresh Leaf Tea

Rory and Tracy Bell

Rory and Tracy Bell founders of Millennia Tea have created an entirely new category of tea – fresh tea. They begin with the freshly plucked, washed leaves, dry them to prevent damage from frost and freeze the leaves within hours to lock in up to four times more nutrients than conventionally processed leaf. Epigallocatechin Galleate (EGCG) levels were significantly higher than conventional tea samples, says Tracy Bell.

“Results even better than we predicted and the taste got great reviews,” according to Tracy. The tea is sold in a few specialty tea stores with plans to expand distribution.

This innovation caught the eye of producers of the popular TV show Dragons’ Den. Millennia tea was selected, and was funded (the pitch successfully landed $100,000 for a 19 percent share but legal restrictions prevented the celebrity investor from actually writing a check).

See: Millennia Tea Loses TV Show Investor.

“Our company name Millennia speaks to a period of thousands of years,” says Tracy, a public relations professional. “We think we have found something that will infuse the industry with the kind of interest we haven’t seen in a millennial.”

See video

Anheuser-Busch InBev

Delivery trucks are a choke point of distribution. Only a few can visit the hundreds of thousands of grocery, convenience, and neighborhood marts that account for most of the ready-to-drink tea sold in the United States. Last year brewer Anheuser-Busch InBev, concerned with a federal requirement to deliver products other than their own, turned to Starbucks for a creative solution. The nation’s largest beer brewer now brews and bottles premium tea. The partnership expands delivery of Teavana bottled teas to several hundred thousand new outlets, including all of the major chains. Since February when Starbucks first began delivering tea on AB InBev trucks, the Teavana bottled line has advanced to a top selling rank in all four of the states where it was introduced. A national roll out is underway. The brewer will invest $2 billion to improve its brewing capability

Tea Reimagined

Last year in Kunming I stopped at the airport to order the newly-introduced Teavana cold teas, the latest in the “shaken” selection of handmade drinks. My choice was Black Tea with Ruby Grapefruit and Honey an iced tea that came with a large diameter straw like those used to slurp bubble tea. Much to my delight I got a mouthful of grapefruit cells, semi-sweet, tangy and very refreshing when compared to sugary-sweet tapioca. Teavana discovered that by stirring the grapefruit in oil, where the juice-backed sacs unbind, it is possible to separate the citrus flesh into hundreds of individual vesicles . The pearl-like bits deliver a fun, fresh splash in the mouth. Teavana reported a 40 percent increase in sales of Teavana handmade beverages at 6,200 Asian and Pacific outlets last year.

Problems are the soil in which innovation takes root.

Kevin Ashton, author of To Fly a Horse has written a quite extraordinary book that I strongly recommend. In it he eloquently describes the most important aspects of successful innovation. He makes the case that creative thinking is simply a specialized kind of problem-solving behavior.

Creation is a result – a place that thinking leads us, according to Ashton. When you say someone is a creative thinker you are praising the result of their thinking, not some magical process. The roots of innovation are the thought: “I can make this better.”

There is no requirement for genius, “ordinary thinking works just fine,” he writes.

“The creativity myth implies that few people can be creative, that any successful creator will experience dramatic flashes of insight, and that creating is more like magic than work,” writes Ashton. “A rare few have what it takes, and for them it comes easy. Anybody else’s creative efforts are doomed. ‘How to Fly a Horse’ is about why the myth is wrong.”


He writes that “creation is a destination, the consequence of acts that appeared inconsequential by themselves, but when accumulated they change the world.”

Source: To Fly a Horse (The Secret History of Creation, Invention and Discovery)