STiR coffee and tea magazine

STiR coffee and tea 33 Wholesale orders from foodservice vendors account for 20% of global tea sales. Orders plum- meted as half of the world's 2.2 million restaurants temporarily closed their doors. In the US two- thirds will not reopen. In-home consumption re- mains steady. Coffee shops, cafes, and fast-food restaurants serving suburban commuters and downtown business centers experienced unprec- edented declines in daily transactions. The volume of tea consumed in offices vanished. Near-vacant hotels abandoned afternoon tea service. Tourist locations and quaint Victorian tea rooms in rural communities remain shuttered. Distancing orders halted traditional Chinese, Japanese, and Korean tea service where proximity is essential. "This pandemic has shown us that tea is re- silient in this crisis - we've seen an increase in tea sales in grocery by 34% - that's well over the aver- age CPG which is up 20%," writes Shabnam We- ber, president of the Tea & Herbal Association of Canada (THAC). Grocers and tea merchants re- ported a massive spike in sales of tea prepared at home. Sales of iced tea blends and ready-to-drink brands grew as convenience stores and neighbor- hood markets attracted shoppers that would typi- cally visit supermarkets, according to a study by Ensemble IQ. Grocery stores are a growth oppor- tunity now that delivery is viable. This is because grocers are no longer forced to limit inventory to what fits on the local store shelf. In a rush to fill home pantries, online sellers reported the fastest growth, but grocery remains the channel of choice. Consumers spent $1.4 billion on loose leaf tea and teabags and $4 billion on RTD tea at US grocery, mass market, select dollar retailers, club, convenience, and commissary stores during the 52 weeks ending July 12, according to market re- search firm IRI. In the US, sales of Bigelow Tea Focus on Retention By Dan Bolton Retail closures account for a quarter of US business closings, now estimated at 100,000 in 2020. Coresight Research predicts up to 25,000 retail stores will close. YELP estimates US restaurant closings at 20,000. Rising shipping costs, disruptions at origin due to lockdowns, a delayed stimulus package and high unemployment will dampen holiday sales. A common error is to view the immense pool of consumers online as an unlim- ited opportunity. There are billions of tea drinkers online, but marketing to the masses is an expensive mistake. Focus instead on retention, developing rapport with existing high-value customers. Enhance rewards and expand loyalty programs. Encourage customers to support your venture. Give them more of what they want to prevent them from straying. "Because your customers are online now more than ever before, digital messaging is a crucial component of that strategy. But, brands need to be conscious of what, where and how content is distributed and positioned during this unprecedented time," advises Jill Redo at Digital CX Group, in a post by Kelly Nickerson at Epsilon PeopleCloud Messaging. MediaPost suggests brands acknowledge the current environment, rather than gloss over or pretend. Messaging needs to be highly relevant. "Commu- nications should not just be tied to products and sales, but also engagement and relevancy," according to MediaPost. Offer customers something of unique value. Be creative in adapting to support the current crisis and be of genuine help to people during this time. Jesse Jacobs, founder of Samovar Tea Lounge in San Francisco uses Zoom to conduct meditation sessions to help tea drinkers cope. The entire tea industry faces a difficult transition, as brick and mortar busi- nesses decline. A survey of business owners found that 55% expect the com- bination expect the pandemic and economic downturn to continue for at least six months. Recovery will be slow. In the meantime, consumers are unusually willing to try new brands and new sales channels (at your expense). Brian Balfour, c.e.o. of Reforge, writes that retention "is literally the foundation to all of growth." Barriers to entry are low for tea. The easier it is for potential customers to switch from another prod- uct, the easier it is for your customers to leave your brand for a competitor. Online customers order without knowing whether the vendor is capitalized at $10k or $10 million and without the assurances of brick and mortar interac- tions. In a competitive market, invest in quality as great teas stand out. "The solution isn't to try to go bigger. Instead, it's the opposite," writes Carol Sankar for Inc magazine. While it is true that many sub-niches have a smaller potential audience than the broader niche, these smaller segments tend to be more tightly connected." "Targeting a smaller niche also gives you the opportunity to re-evaluate and strengthen your brand," according to Sankar.

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