STiR coffee and tea magazine

24 STiR coffee and tea / Issue 4, 2018 (August / September) Whittard of Chelsea Whittard of Chelsea illustrates the tremendous shifts in the UK tea market and how a heritage company must innovate to thrive and expand its horizons to survive. In 2016, the upmarket British tea and coffee firm reported a loss of $2.4 million. In 2017, this turned to a profit of $325,000, with sales growing by 20% to $45 million. Whittard has had a volatile recent history, including being bought by an Icelandic firm that collapsed after a spectacular growth record (which did not sway the judges in finding the principals guilty of tax fraud.) Whittard was put into the equivalent of Chapter 11 bankruptcy and bought by a private equity group in 2008 that sold it to its current c.e.o., Mark Dunhill (2014). This is very much a heritage firm. Founded in 1886, it has stressed Englishness in its products, packaging, and design of its now 55 stores in 20 countries. An example is its description of its English Rose tea: acknowledged to be Chinese ingredients, but "a single sip brings to mind rolling hills, church bells, and country gardens, perfect for a picnic on the village green." Really? On the surface, its future looks shaky. The traditional tea market in the UK has eroded every year for the past 20. Coffee is taking over in terms of outlets, customer experience, and growth. There are no strong tea store chains. Whittard is too small to gain advantages of scale and too big to compete purely by local specialization. Its turnaround seems more than just a short-term blip. It has benefitted from unlikely targets of innovation. Its revenue growth has come from millenni- als attracted by its gracious designs: stores, packaging and products, that include "classic" teaware and "old-time" favorites. And its green tea. It has carefully exploited the interest among millennials in "wellness" teas. Whittard's c.e.o. comments that "We're consciously looking to appeal to a millennial audience… the group of customers driving the growth in tea are educated urban millennial women." And Whittard's growing base of Chinese buyers. It has been one of the first specialty tea firms to target online selling in China, through an alliance with Alibaba, the $25 billion e-commerce leader, and its Tmall platform. Tourist are a key part of its growth. In the UK, sales to foreign customers grew just over 50% in 2017. Market analysis showed that several hundred tea resellers marketed Whittard goods on Tmall and that the very Englishness of its brand was of strong appeal. Now, Alibaba provides end-to- end support for distribution, payments, logistics and marketing. The obvious lesson from Whittard: innovate or die. The complementary one is "know your customer" – not just of today but of tomorrow and be clear on what value you create for them. Whit- tard has shifted its customer targeting and renovated its heritage. An English firm selling tea online to China? Sure. An old-fashioned provider luring millennials into its stores to buy green tea? Of course. US Bigelow Becomes Benefit Corp Family-owned Bigelow Tea is now a registered Benefit Corporation, a category of firms that designate social responsibil- ity as a core business goal in the pursuit of a positive social and environmental impact. The company, which employs 400, was founded 75 years ago by Ruth Campbell Bigelow who formulated Constant Comment, one of the world's most successful tea blends. Cindi Bigelow, third generation president & c.e.o. said "Our purpose has always been about much more than making profits and making tea, so the more I learned, the more I knew a Benefit Corporation was something I truly felt captured the spirit of our company -- a company that is inspired by more than just making a profit." "Clearly, we need to maintain strong profitability," she added, "but we should never lose sight of the fact that we also need to focus on doing good things with the power we hold inside this company." Learn more: www.bigelowtea.com American Specialty Tea Alliance The American Specialty Tea Alliance (ASTA) registered in June in the US as a non-profit supporting the tea industry's small business segment. Its mission "is to grow interest in specialty tea, in both the tea industry and the public, through education and community, by facilitating collabora- tion between our members, by bolstering the quality and tenability of specialty tea through research and communication, and by promoting these goals worldwide." Founder Tony Gebely floated the idea last year and since then has quietly recruited leaders from well-established companies like G.S. Haly, Adagio, Seven Cups, Young Mountain, and Haelssen & Lyon to serve as the founding board of directors, represent- ing an intersectional group of voices and sector stakeholders within specialty tea. Suzette Hammond of Being Tea is deputy executive director. A still-growing cadre of both national and international experts, many of whom work as consultants and service providers, will serve on ASTA's advisory board, including Nigel Melican at Teacraft, Kevin Gascoyne of Camellia Sinensis, Tony Tellin of Steven Smith Teamaker, and specialty importer Lydia Kung. The organization does not yet intend to host an annual gathering, opting instead for a one-on-one biannual call for each business-level member with ASTA executives. However, ASTA is assisting the Tea Masters Cup (TMC) in finding a suitable venue to hold the first Tea Masters Cup USA competition in 2019. Learn more: specialtyteaalliance.org One of 55 Whittard tea shops

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