The fanfare and brightest of lights shined on Starbucks’ spectacular roastery opening last week but Teavana plays an important, if secondary role.
Conversations of late tend to dismiss Teavana as a failure following the announced closing of 379 U.S. and Canadian stores. Teavana even closed its e-commerce site Oct. 1 despite growing sales.
The roastery opening proves Starbucks is simply repositioning the brand for grander things.
Teavana overseas is growing sales at a torrid pace (40 percent) and the premium tea will earn an estimated $1.6 billion in 2017.
The opening of the new Shanghai Roastery features China’s first Teavana tea bar, which is 3D-printed from recycled materials and uniquely designed to appeal to Chinese tea drinkers drawn to the location by the “coolness” of coffee. Market research in China reveals very few coffee drinkers there mimic the American “early-to-rise” craving for coffee. Instead the drink is consumed later in the morning with consumption increasing during the hours that consumption typically falls in American cafes. Chinese coffee drinkers are less loyal, spend more frugally, and visit coffee shops less frequently during the week.
Tea remains the go-to drink. Tea, however, is available in millions of locations, which is why Teavana sought something different. “Tea re-imagined” is the introduction of blends with fresh fruit and juices, chilled teas, and new methods of extraction. These cooled or iced teas, with flavors such as Honey with small piece of Ruby Red Grapefruit, are impossible to find elsewhere, yet resemble the familiar ready-to-drink bottled teas on sale throughout China.
Look close and the traits evident in New York City’s Teavana Fine Teas + Tea Bar are visible in the roastery’s tea bar. Inspired by the traditional clay teapots in China, the 25-foot-long tea experience bar is a light jade color with dark shadows to represent tea stains formed in a teapot over time. There are large, self-serve glass canisters of colorful tea on tap. The sleek hot water dispensers are visible mid-counter and customers drink from modern larger-volume glassware that puts colorful teas in a good light. Matcha is made to order. Teavana seats customers on comfortable stools directly across from servers/sommeliers to encourage discussion and tea education. Starbucks is even offering nitrogen-infused teas.
Starbucks also invested in the Steampunk tea brewing system. Since its introduction in 2013, the Alpha Dominche Steampunk Brewer has won a loyal following among coffee and tea professionals. These machines brew up to four pots of tea at a time with precision that guarantees consistency, even with very finicky-to-prepare teas. The tea is suspended in glass brewing chambers where it dances “in the water, while steam extracts every nuanced flavor,” writes Starbucks. Chinese tea drinkers appreciate the fact that these machines artfully extract subtle flavors from quality tea leaves and, like people everywhere, they think the technology is fascinating.
Educating Chinese to the ways of coffee is as important as exposing them to the sights, smells, and sounds of a working coffee factory. The store employs 400 and can accommodate 1,200 with seats for 500; six days after it opened, there were daily lines of curious visitors outside the roastery, waiting as long as an hour to enter.
The introduction of augmented reality (AR)—accessible through the custom-designed roastery digital web-app platform or on Alibaba’s Taobao app—enables customers to create their personal roastery discovery journey. The platform also incorporates a digital menu and will intuitively, through AR technology, share details of the coffee bars and brewing methods, as well as unique online and offline experiences. Each step of the way, customers unlock a virtual badge and once all badges are earned, they receive a custom roastery filter to commemorate the moment and share on social media, according to Starbucks. The Shanghai Roastery digital experience is designed by Starbucks and powered by Alibaba Group’s scene-recognition technology.
This experience also extends to Alibaba’s online marketplace, Tmall, allowing customers to purchase Shanghai Roastery and Reserve branded merchandise and whole-bean coffee for delivery directly to their homes, or to register for specially curated coffee-tasting experiences.
Emerging wisdom in a digital-dominated retail environment is guidance that locations should either be a spectacle, a memorable experience, a destination beyond compare, or a conveniently located functional showroom, stripped of massive investment in inventory with a highly skilled staff to educate customers who will ultimately order online for home delivery or store pickup.
The roastery is all this and more: “The epitome of coffee and retail innovation for Starbucks in China,” according to Starbucks. China is the company’s fastest-growing market with more than 3,000 stores in 136 cities. There are 600 Starbucks locations in Shanghai alone, the greatest number of any city in the world, yet no one is predicting oversaturation. Every regular customer at every one of those 600 locations will find his or her way to the roastery. Some will be drawn to the noise and lights, but this is also where serious coffee drinkers will find small-lot coffee sourced from more than 30 countries. Coffees include those from China’s Yunnan Province, roasted in China by eight skilled Chinese coffee roasters. These individuals are passing on 46 years of Starbucks’ roasting expertise to the first batch of Chinese roasters, according to the company’s press release.
Customers can watch the green beans as they are roasted then sent through copper “symphony” pipes (named because of the musical sound the beans make as they travel through them) directly to silos at the coffee bars, where customers can enjoy a fresh cup of reserve coffee, or to the in-house pack line to be packaged for distribution across Starbucks stores in China.
The centerpiece of the 30,000-squar-foot roastery is a two-story, 4 ton copper cask, adorned with more than 1,000 traditional Chinese chops, or stamps, hand-engraved to narrate the story of Starbucks and coffee. The ceiling is set with 10,000 handmade wooden, hexagonal tiles. The store is twice the size of the first Reserve Roastery built in Seattle. There are three coffee bars featuring different methods of preparation and an Italian bakery with 80 artisan breads and pastries baked onsite by Milan-based Princi, also a first. The store sells craft beer made with coffee, regional beers and wine. The coffee bars serve as the stage where hundreds of baristas will use one of six brewing methods: ModBar Pour Over, Chemex, Coffee Press, Siphon, Espresso and the proprietary Clover-brewed coffee.
The roastery’s location at Taikoo Hui on Nanjing Road is one of the world’s busiest shopping destinations in the world.
“The affinity we have built with our partners (employees) and customers over the past 18 years in China is special and we knew we must bring our boldest, most premium store ever, to Shanghai, China’s bustling metropolitan hub and one of the world’s most dynamic retail destinations,” said Howard Schultz, executive chairman of Starbucks. “We’ve created a space that both recognizes and celebrates our 46-year history of coffee leadership and retail innovation with China’s rich, diverse culture.”
The Independent in Singapore, reported that Alibaba Executive Chairman Jack Ma, speaking passionately during the opening ceremony, said, “today is not the celebration of this roastery. It’s a celebration of how coffee and tea can work together in China.”
The company pledged $20 million to the Starbucks Foundation and Starbucks China during the next five years, according to Belinda Wong, chief executive officer of Starbucks China, which employs 45,000 workers. She said, “We firmly believe it is our role and responsibility to use our scale to give back to the communities as we continue to grow in China, and with the people of China.” The funds will finance social programs in communities across China. “Our commitment, together with our Roastery opening, epitomizes how Starbucks is doubling down on the unprecedented opportunities we see in the future for Starbucks and China,” said Wong.
Next to open: Roasteries located in New York, Milan, and Tokyo and a 45,000–square-foot Reserve Roastery to open in Chicago.
Source: Starbucks, The Independent