Steeping in Profits
Sell tea to caffeinate sales BY DAN BOLTON
O
ne sure fire way to minimize the impact of record high coffee prices is to sell more tea. Profits per cup top 85
percent at a time when coffee margins are falling. Tea is in demand and the $1-per-cup or greater premium
that loose-leaf teas drinkers are willing to pay has been resilient despite economic hard times. Many shops get $1.75 for store- branded loose leaf tea that typically costs less than a quarter per serving including cup and lid. Labor-friendly tea lattes from concentrates sell at prices comparable to espresso drinks with base materials that are one-fiſth the cost of coffee. When considering a tea program recognize that customers
entering the shop are looking for a hot caffeinated beverage. Coffee drinkers may have spouses, friends or children who do not drink coffee, or they may drink both. Coffee drinkers
Here are the numbers: Tea Drink (12 oz)
Bulk Tea + t-sac Teabag
Pyramid Sachet Tea Drink (16 oz)
Iced Tea (loose-leaf) Tea Latte (w/skim) Tea Latte (w/whole) Chai (brewed w/h&h) Chai (mix w/water)
Chai (concentrate w/whole)
sometimes switch to tea in the aſternoon, and shops like Argo Tea Café in Chicago and New York and Tealux in Boston are reporting great success selling late-morning tea lattes. On a blustery Chicago morning last month I watched the
team at Argo’s downtown shop get slammed with a late morning rush. Happens every day, one of the founders explained. Te 20-store chain evolved to feature great coffees with well-trained early shiſt baristas because at 7:30 a.m. no urban office worker rushing to his cubicle ordered anything but coffee. Four hours later, during that dead late morning daypart
owners know so well, sales of lattes soared. Argo is getting $3.25 to $4.25 for signature drinks such as Earl Grey Vanilla Crème Tea Latte, Gingerbread Chai and a 213-calorie Red Velvet Tea Latte with red tea, raspberry and soy milk. On the cool side
Tea .09 .13 .43
Tea .09 .09 .09
Price
1.90-2.75 1.50
1.90-2.75 Price 2.25
3.25-4.25 3.25-4.25
.20-.30 3.95-4.25 1.15 .84
3.95-4.25 3.95-4.25
Cup .07 .07 .07
Cup .09 .09 .09 .09 .09 .09
Lid .03 .03 .03
Lid .03 .03 .03 .03 .03 .03
Ingredients Water Water Water
Ingredients
Sweetener/ice = $.12 .024 x 13 oz = $.31 .027 x 13 oz = $.35 .031 x 7 oz = $.22 Water
.027 x 7 oz = $.19
Cost Profit Margin .19 .23 .53
$1.71 $1.27 $1.37
1.15 1.15
$1.92 $2.73 $2.70 $3.31 $2.80 $2.80
90% 85% 72%
Cost Profit Margin .33 .52 .55 .64
85% 84% 83% 84% 71% 71%
(Milk prices: Skim $3.00 gal. Whole $3.40 gal. H&H $4.00 gal. Chi concentrate: 12 cents per oz., 7 oz. in 16 oz. cup) 34 | April 2011 • www.specialty-coffee.com
