Tea Land – Selling Tea in a Coffee World

SAN JOSE, Costa Rica

For six years Gonzalo Aguirre and Elaine White have been spreading their love of tea in one of the world’s coffee capitals: Costa Rica. The third largest agricultural export item ($383 million in exports in 2011), coffee is known as El Grano de Oro, the golden bean, because of its important economic impact. But Aguirre and White were tea lovers.

SAMSUNG DIGITAL CAMERAWhite discovered tea by way of a school roommate and Aguirre stumbled upon it on a trip to Germany. Later, as a diplomat, White traveled extensively and began collecting tea on her trips. When her travels slowed, the couple was dismayed to find their tea stock rapidly diminishing. They missed the beautiful tea shops they had visited around the world and were frustrated trying to find loose leaf tea. They saw an opportunity.

For two years they networked with distributors, studied tea and conducted focus groups in their community. Their first of four Tea Land shops opened in 2006 in Rohrmoser. They followed with shops in Los Yoses (2008), Heredia (2010), and Escazú (2012). Serving nearly 2,000 customers per month, they are considering new locations as well as franchises. Tea Land’s modern, minimalist style attracts a young customer base (primarily ages 21-28) tea drinkers who are very educated about tea.

Elaine believes their early research was critical. Most of their initial 60 teas had already received positive response before they hit the shelves. While many times sales trends in Costa Rica mirror those in the United States, tea was a different story. The best seller has been Pu-erh because of its potential health benefits as well as the small, but significant, number of Costa Ricans of Chinese ancestry. The focus on health also explains the heavy interest in green tea. Flavored teas and tisanes, particularly rooibos, are other strong sellers. Surprisingly black tea is only a small percentage of sales.

Like all good shop owners, Aguirre and White adapt. Their locations include a tea lounge where customers can consume tea and food and a retail shop. They believed half of their business would be from the lounge. In reality 60% of their customers buy tea to take home with them and 20% of sales come from their wholesale business with 10-15% of sales are from the tea lounge.

White believes Costa Rica’s connection to the world beyond their borders helps significantly. “We’re a country of tourism. The restaurant and food service industry is very open to world trends. Therefore they were ready to raise the quality of the product.”

This enthusiasm has helped Aguirre and White grow a strong wholesale arm for their business, stocking restaurants, hotels, and spas.

SAMSUNG DIGITAL CAMERAWhite and Aguirre continue reaching new customers through their bimonthly tea club and their online tea store, the first in Central America. Inspired by Tea Land’s success, new tea stores are now opening.

It’s an uphill battle; in 2009, Costa Ricans consumed 0.063 kg of tea per capita but 3.8 kg of coffee. However over the past five years, tea consumption has increased 200% in the country. (Source: elfinancierocr.com)

Tea Land is working hard to stay ahead of the curve by continuing to focus on customer feedback, education, and new strategies such as producing and packaging their own blends. They believe that tea will be powerful enough to hold its own in coffee land and will see continued growth for years to come.