A Good Cup of Tea Is Always Better When Shared with Others

Who would have thought that in 10 years, a chance cup of tea would turn into a multi-million-dollar, North American-wide company. That is exactly the case with Steeped Tea. Steeped Tea is located in Ancaster, Ontario, a small town just west of Toronto. With grit, determination, and vision, Tonia Jahshan and her husband, Hatem, have turned a cup of tea into a "direct selling company that empowers people to start a business of their own and become passionate entrepreneurs, all while sharing a cup of tea."

In 2016 Steeped Tea had annual sales of more than $20 million, with over 9000 salespeople selling loose-leaf tea and accessories throughout North America, earning Tonia ranking as one of the top female entrepreneurs in Canada.

Tea is the second most consumed beverage in the world next to water. Canadians on average drink just over 6 cups of tea a week and have an average of 11 different varieties of tea in their cupboard. With representation in Canada from inherently strong tea-drinking cultures such as China, the Middle East, and India, the popularity of tea in this country should come as no surprise. In 2015 tea sales grew 23 percent over the previous year, reaching $1.3 billion, and in 2015 Foodservice and Hospitality named tea as one of the top five food trends for that year. It is expected that by 2020 tea consumption will grow by 40 percent, faster than the growth in consumption of coffee, soft drinks, and alcohol. Growth in consumption is coming not simply because of the mix of the Canadian population but also because of product innovations in the varieties of tea offered and the formats it is offered in. While tea bags remain the most popular format, loose tea is growing in popularity. Loose tea offers the opportunity for literally hundreds of variety options, as well as value. Loose tea can be steeped more than once, while tea bags are one-time uses. In addition to the variety offered with loose tea, the quality of the tea is better, particularly when the tea drinker is aware of how to steep tea properly. Today's tea drinker has been referred to as "conscious drinkers"they want to know where the tea is grown, how it is harvested, its various tasting notes, and how to maximize the flavours. The image of tea is changingit can also be used as an ingredient in cocktails, and Forbes noted that tea-infused cocktails were a top trend for 2017.

Where once you were considered old fashioned and dated when ordering tea, today many, including the highly influential Millennial segment, are not afraid to order a "cuppa," and they love the culture.

Interestingly, in contrast to coffee and other beverages, research indicates that 80 percent of Canadians drink tea at home rather than in food service establishments. Although there has been an increase in the consumption of tea over the years in food service establishments, and although it is always on the menu, it is not ordered as often as other beverages because tea lovers claim the quality and preparation of the tea just aren't good enough. It is more complicated to make a good cup of tea than other beverages, and food service staff either aren't trained or don't have the time to ensure each cup served is a quality cup of tea.

Like coffee, tea can be bought at your local grocery store and is considered a staple on the grocery lists of Canadian families. President's Choice has sought to capitalize373on the growing consumption of tea and the sophistication of consumers' tea palates by launching specialty loose-leaf tea under the PC Black Label. Specialty tea retailers are also entering the market. Teavana, owned by Starbucks, has a number of locations in Canada offering hundreds of tea blends and tea accessories. As to be expected, retail staff spend time with customers, providing samples and instruction on how to steep tea; to enhance customer convenience, online ordering is possible.

David's Tea is a Canadian specialty tea and tea accessory retailer. David's Tea opened in 2008 and today boasts over 200 stores across Canada and the United States. David's Tea offers over 150 varieties of tea, including exclusive blends as well as tea accessories. Like Teavana, David's Tea retail staff is trained to educate and teach customers how to steep the best possible cup of tea.

As evidence of a growing love for tea, TWG Tea opened in late 2016 in Vancouver. TWG Tea was launched in Singapore, and the Vancouver location is the Canadian introduction of this luxury tea brand. TWG Tea is positioned as the finest in luxury tea. It is sold through branded retail locations that are a tea boutique, tasting salon, and restaurant. At TWG Tea in Vancouver, the prices range from $17 for 100 grams of tea to $2723 for 100 grams. Yes, that is over $2000 for 1000 grams! TWG Tea hopes to be the leader in educating today's tea drinkers that, like wine, taste is very much influenced by the quality of ingredients, and the higher the quality, the higher the price. Like both Teavana and David's Tea, staff at TWG Tea spend time with customers not just explaining the differences between teas, but also how the tea should be prepared. In TWG Tea's case, the staff even go so far as to explain what foods should be paired with various teas!

So back to Steeped Tea. How did they do it? What is the secret to their success? Can they continue this unbelievable trajectory of growth in the face of stiffer retail competition?

To begin with, they will tell you they aren't a tea company, they are a tea party company and that is one key to their success. They have hundreds of tea blends and tea accessories, but they also sell jams and baked goodsthings that make for a good tea party. The other key to their success is their sales model.

Steeped Tea uses the direct sales model. According to the Direct Sellers Association of Canada, 91 percent of those involved in direct selling are women, 75 percent are married, and almost 60 percent have postsecondary education. A survey of direct sellers by the association revealed that the nature of direct selling enhances the quality of life of those in it. Direct sellers cite product savings, work schedule flexibility, and the social nature of the career as key benefits. The direct sales model provided Steeped Tea with the opportunity to sell tea via tea parties. The party setting gave the perfect opportunity to educate the purchaser, sample the tea (in proper tea accessories), and have fun. The consumable nature of the product ensured repeat sales. In addition, no one else was selling tea this way.

Steeped Tea quickly grew, and within two years Tonia knew she needed help. While brand awareness was strong and consultants were coming on board quickly, day-to-day finances and operations were chaotic and stressful. In stepped Tonia's husband, Hatem, and with changes to supplier agreements and the hiring of a bookkeeper, things perfected like a lovely cup of rooibos tea.

Steeped Tea was now at a tipping point. Continued growth meant expansion into the United States, but that required an influx of cash that Steeped Tea didn't have. In 2012 the company was profiled on Dragon's Den. The result was a deal with David Chilton and Jim Treliving for $250,000 for 20 percent of the company. With the expertise of these "dragons," Steeped Tea successfully entered the United States, and today the two investors remain committed to the company. Not only did Steeped Tea's appearance on Dragon's Den provide an influx of cash, it also increased company awareness. Within months of their appearance, the number of consultants grew from 500 to over 3000 and the company has not looked back. Today the company has over 50 staff in a 30,000-square-foot facility.

The increase in use of social media has been a bonus for Steeped Tea and its direct sales method of selling. The "mompreneurs" that have gravitated to Steeped Tea as consultants, or small business owners as they really are, are social media savvy. They use social media as ways to connect with one another and with their customers for new sales and repeat sales. Social media offer consultants a valuable tool to reach new customers and build brand ambassadors.

With tea continuing to be trendy to drink, competition to be the consumer's tea beverage company of choice will become tougher. Can Steeped Tea keep up this phenomenal growth? Can Steeped Tea keep consultants engaged? Can consultants continue to meet the needs of tea-consuming consumers? Tonia and Hatem believe so, but they say you won't see Steeped Tea on grocery store

1. Complete a SWOT analysisfor "Steeped Tea". Incorporate individual's secondary data from point 2 above.
2. Develop an Integrated Marketing Communications Planto build brand awareness. The plan must include advertising and at least 2 other elements of the promotional mix

3-Identify the key product benefitsyour advertisement will focus on and what advertising appealyou will use to communicate these benefits.

4-Present a visual example of your advertisement.

5-Identify what medium (media) you will use to convey your message