Wednesday, December 15, 2010

Tea Business Spotlight 2 - Seven Cups

Seven Cups
Tucson, Arizona

Welcome to the second of our Tea Business Spotlights, in which we allow tea people to share insights on running their business. If you're a tea business owner and you'd like to take part in an upcoming spotlight, please contact us.

How long have you been in business?
Since 2002, but we spent almost as many years prior to that doing research, and establishing relationships in China before we felt we could start selling tea in the US.

What is the size/scope of your business?
We are a small business but we accomplish things that are usually more typical of much larger businesses. We do 100% of our sourcing directly from producers that we visit every year, currently 26, in the mainland and one in Taiwan, and we export it from China. We completely control our supply chain because we have our own Chinese export license, which we received in 2008. We are the only international tea company with our own license. It helps us to ensure that our quality is consistent. It also allows us to guarantee the tea's authenticity and that organic certifications are accurate.

We have a website that is oriented around education in tea and Chinese tea culture. We have kept an active blog since 2003. We do a lot of research in China in relationship to tea and tea culture. We are members of the Chinese International Tea Culture Research Institute, and have been published in their journal. We have customers in thirty six countries through our site.

We also have a tea house in Tucson, Arizona that opened in 2004. It is designed in an authentic Chinese style. We have received best of Tucson awards since the year we opened, and have a 4-star rating from Talk of the Town. We have a second tea house that opened in Denver as a Seven Cups franchise in 2008. The Denver tea house has won numerous local awards, and has also earned a 4-star rating from Talk of the Town.

We also have a wholesale business and we supply numerous other tea shops in the US, Canada, and Europe. We are gearing up to open up our wholesale business to supply customers directly from China, which will allow us to greatly reduce our prices, and open the door for customers to get much better quality tea than is currently available in the American and European wholesale market.

Why tea?
I developed a love for Chinese tea through friends in 1992, and have a very deep appreciation for the people that make it. Tea is unlike any plant in its effect on culture, history, and its healing qualities. It has never failed to make me feel better when I'm having a challenging day.

How did you get the ball rolling on your venture?
I started traveling to China in the 90's for fun, and one of the things that I loved to do is to go out to the countryside and find tea for myself because I could not buy any good tea in the US. I got bored doing research in the library on a project, and I started looking at research into tea and importing. I went on a prolonged trip to China in 2001 and then again in 2002 to talk to producers. I also met my wife in the process, who is a tremendous asset. She was managing a tea house in Guangzhou and had just received her credentials in tea culture. When I returned in the fall of 2002 I set up my LLC, and placed my first orders. We got married in 2003 and sold tea online and in farmers markets along with some wholesale business accounts.

What do you feel is the biggest strength of your business?
Our strength has always been in sourcing and research. We have spend a lot more time and energy in developing our network on the Chinese side of the equation. We never buy tea from anyone that does not produce the tea themselves. This is a high standard that we set for ourselves, it is much more expensive and time consuming to do business that way, but it is the only way to get the level of quality that distinguishes us from our competition. We have been very lucky in the people that we have met in China and the education they have given us. Certainly the network of friendships we have established is essential. I also have to mention our customers, because they have done all of our marketing for us through word of mouth. They continue to give us the support that makes it possible for us to maintain the energy to do the hard work of bringing these teas to market.

What were/are the biggest challenges of getting into/being in the tea business?
The biggest challenge that we had in the beginning was finding the sources for the teas that we carry in the vastness of China. In those days the roads were bad and it was slow going, and there are over 70,000 producers to sort out. It is also a lot of time, effort, and luck, to build the kind of relationship from tea producer to government official that are critical in being effective in China.

Our business challenge is educating our customers. Fine tea is very different from the tea that is readily available on the market. It is also quite a bit more expensive. We can only build our business one person at a time, and we work very hard for every customer we have. The difference between commercial tea, and great tea is really night and day. There is no way to even effectively talk about it, only the experience of quality bridges that gap. The good thing about that is that once someone has had that experience there is no going back.

What would you do differently, if anything?
Well, it is a bit counter intuitive to sell hot drinks in the desert. It hard to imagine living anywhere else, but it would have been a bit easier to have been in a better market. Still we sell tea all over the world, so maybe it doesn't really matter.

How's business?
Our business has had growth for as long as we have been in business

What advice would you give to someone who aspires to be in the tea business?
People going into the tea business need to do a lot of research. That means doing a lot of travel and tasting a lot of tea. Tea is a complicated and difficult business, and a very old business. Even to this day there is very little literature that will give you the help that you will need to be competitive, and that includes classes that are currently being offered in the US and Europe. Focus on China, where there is a wide variety of teas, and levels of skill in growing and producing tea that is unrivaled in the tea world outside of China. I believe that to be successful in the tea business you must be able to distinguish yourself from the herd. I believe, though it is not the main stream belief in the tea industry, that the way to do that is by being able to supply better quality than is currently available.

The people that will find success into the future will not be trying to come up with better flavors or blends in hopes of capturing market share, or finding a better tea bag design, or putting together marketing tools that are meant to compensate for mediocre tea.

I believe the future is in better quality Chinese tea. I don't recommend that people follow the market as it currently is. Real good quality tea is as dramatically compelling as fine wine, and many more times as complex in the scope of aroma and taste. The wine cooler market is no longer competitive with the fine wine market in the US. I think the same will happen with tea, and all of the flavoring and blending will no longer dominate the market as it does now.

I also want to say something about the ecommerce market as well. Finding a wholesaler and throwing up a website is not going to get you very far. Thousands of people have done that, and it doesn't go very far in finding success in the tea industry. Ecommerce requires hard work like any other business, and there are no four hour work weeks in the online tea business. To be successful online means continuous content development, impeccable customer service, and of course good tea. Trying to compete in price comparison with companies like Adagio and Rishi that can import containers of tea is pretty tough. The only way to compete with them successfully is to have better tea.

Ok, after saying all that, I also want to say that the rewards of being in the tea business are really worth all of the hard work. I can't think of any business that is as challenging, adventurous, pleasurable, and rewarding in that you are helping to improve the health of your customers. Take the challenge. We will help you as well as so many others that love the business.

Gifts for lovers of tea with free wrapping of all items.

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