Tuesday, March 09, 2010

The 'Starbucks of Tea': A Surprising Turn


Photo: Corax

When Argo Tea opened its first locations in Chicago, its founders were quoted as wanting Argo to become the 'Starbucks of Tea.' Quite apart from the questionable decision to refer to their tea houses as 'tea cafes,' to couch one's aspiration in terms of Starbucks puts the discourse once again in terms of coffee. The logic behind such an urge is completely obvious, but it is not the less undesirable for all that.

Be that as it may, since its inception in 2003 Argo Tea has had quite a bit of commercial success, with already ten locations in Chicago and three more in New York. The casual onlooker might easily infer that these Argonauts are well on their way toward garnering that Golden Fleece of tea commerce: their stated goal of becoming the 'Starbucks of Tea.'

But you really never do know what's next. At this particular moment, the coveted 'Starbucks of Tea' label seems likeliest to be awarded to another, rather surprising contender: Starbucks.

Photo: CFP

Just a week ago, Starbucks launched its new line of tea products -- in China. If this strikes you as a bad case of coals to Newcastle, you are hardly alone. Here we have Yanks importing Yankee capitalism to Communist China -- using Chinese-grown goods as merchandise. Apart from the baroque intricacies of those economic implications, -- will Chinese consumers trust laowai to be able to purvey, without getting it seriously wrong, a commodity so foundational to the daily life of China?

This is by no means Starbucks's first beach-head in the People's Republic. There are several hundred Starbucks shops there already (over 350 by the beginning of 2009). Indeed, until 2007 there was a Starbucks just outside the Meridian Gate of the Forbidden City in Beijing; when controversy arose over this placement, the store was closed.

Photo: Ng Han Guan [AP]

But new locations will be all the more carefully chosen. And the teas on offer in Chinese Starbucks will not be the Tazo tea bags so familiar in the US: on the contrary, the first tea selections in China are three carefully-chosen Chinese teas -- a white, a green, and an oolong: bai mu dan, bi luo chun, and dongfang mei ren.

If anyone can successfully engineer such an audacious undertaking, it is likely to be Starbucks. But -- even with top administrators who are themselves Chinese -- can even Starbucks overcome presuppositions about Westerners and tea culture? An arguably more problematic issue: what long-term impacts might such a juggernaut have on tea culture and the tea industry in China?


Jason Walker said...

this will be interesting for several reasons:

Why bai mu dan? I've met many mainlanders who had only vaguely heard of white peony. It was originally a (largely) exported tea.

Starbuck's popularity is based on its image of being modern and Western. Introducing teas will wake the sleeping giants (i.e. tea houses). The giants can overtake Starbucks in tea by simply putting in softer seat cushions and cleaning the sunflower seeds off the tabletops.

In essence, US cafe culture is responding to the cries of "slow down" while the Chinese cafe culture is still calling "faster." Starbucks tea would likely dilute its ability to respond to cultural modernization in China.

corax said...

just found this link ...

Lew Perin said...

So at Starbucks China the first tea selections in China are three carefully-chosen Chinese teas -- a white, a green, and an oolong: bai mu dan, bi luo chun, and dongfang mei ren.

I don't have to tell you that the last of the three is Taiwanese. Is Starbucks saying something politically, I wonder?

Christopher Bourgea said...

I love the idea of Argo calling themselves the Starbucks of tea. I'm surprised that they are doing as well as they are. They have a good atmosphere and unique products, but their workers lack any tea knowledge whatsoever.

I'm curious to see how well those three teas do in China for Starbucks. I want to hear the locals opinion on the teas.

corax said...

lew, i had that same question ... of course, the political statement could be several things.

moreover -- i don't have to tell *you* that many of the oolongs sold nowadays as gao shan 'taiwan' teas are actually ... grown on the mainland, and shipped over to taiwan. not unlike the 'darjeeling' scam.

i think the daily lives of chinese [both on the mainland and on taiwan] are much more matter-of-fact than the official political positions might cause them to seem.

and even on the official level, relations are thawing, as again i know you know. as usual, commerce is leading the way:
and there are now direct flights from taiwan to the mainland. and a recent museum exhibit was co-sponsored by mainland and taiwanese museums ...

corax said...

@jason: i assumed they chose bai mu dan as a gesture to the category of bai cha. on that theory, we should also soon see a hong cha and a pu'er added to the menu ...

@christopher: have you tasted argo's teas yet? i'd be interested in your take on the actual quality of their product. they use a sort of zavarka method of making tea.

Marlena said...

I, for one, find it almost offensive to go to a foreign country and the only big ads I see are for American products. We really aren't THAT great. I am also somehwat surprised the Chinese allow them to sell tea. I hope it doesn't mean tea will become like beef and potatoes, much of which is raised to the specifications of McDonald's, the biggest purchasers of said foods.

Hanzhito said...

@ Coraxx: I was recently at the very Starbucks location in the pictures above (Tian'anmen Front Gate) guiding a group of tourists who wanted coffee or a cup of tea. After five days of visits at least twice a day (I tried to broaden their tastes, I swear!!) I saw only Westerners frequenting the site. I think it may be erroneous to assume the tea is being marketed to native Chinese locals and tourists. At least at locations where Westerners can be found, Starbucks is making a killing per unit of tea.

@ Lew Perin: If Starbucks is making a statement, it is probably lost on the Chinese. In my experience the average person tends to view Taiwan as just another province of China, so the only significance of Dongfang Meiren may be that it is exotic to many of them.

Hanzhito said...

@ Marlena: I think there's no need to worry about Starbucks' market power in the tea market affecting tea production. Fast food requires a local vendor for distribution, and McDonalds is good at being first, fastest, and cheapest in that industry. The tea market is more globally mobile though, and along with other reasons, it seems like a diversity of suppliers will continue to exist.

Although I'm not sure about this, and hope I am not wrong!!