X BE FACULTY OF BUSINESS X BL FACULTY OF BUSINESS X + kboardcdn.com/5c082fb7a0cdb/31525923?X-Blackboard-Expiration=1655931600000&X-Blackboard-Signature=woiFc... 100% MRK108 $22 Midterm Assessment - CASE ONLY David Segal takes another swing at tea The founder of Davids Tea is back in business with Firebelly, taking some lessons from his original brand. David Segal is really into tea leaves. Not the kind that tell you the future, but the kind you use to build a direct-to- consumer (DTC) business. Which, if Segal's past is any indication, has the makings of a great future. Segal is the "David" behind Davids Tea, the high-end tea retailer he founded in 2008 and sold in 2015. During the pandemic, DavidsTea was forced to shutter most of its stores to offset its losses. At the time, the decision was to transition its business away from bricks-and-mortar and instead focus on selling its branded products in grocery stores. Segal's passion for tea continued to tug at him. With no budget or time for focus groups, online panels or extensive surveys, Segal turned to his own intuition, experience and expertise in the tea industry and sourced as many existing industry studies and trade publications as he could to help inform his strategy. The Tea and Coffee Trade Journal identifies the top 3 growing tea trends: 1. Consumers are increasingly consuming premium tea at home as the pandemic caused them to avoid crowds, dine out less and search for affordable, small luxuries. 2. Wellness teas have increased in popularity as people become more health conscious. 3. Online shopping has boomed during the pandemic. This, paired with the fact that many local tea shops were closed during the pandemic, made it more likely that tea aficionados will purchase their tea online. Statistics Canada provided a wealth of information about current tea consumption by demographic, supporting Segal's targeting decisions. Industry Canada offered numerous benchmarking, manufacturing and international trade studies highlighting the upward momentum in premium tea production, sales, and consumption. In November 2021, Segal launched his specialty tea emporium named Firebelly, this time making it direct-to- consumer (DTC) only, with a limited portfolio of premium and wellness offerings. Segal's new venture is all digital, powered by Shopify. "The technology platforms make it much easier to start selling and we just felt it was the best way to launch the brand. People spend a lot more time on their phones or on their computers and with so many of A Wbard-Expiration=1655931600000&X-Blackboard-Signature=woiFc. 100% In November 2021, Segal launched his specialty tea emporium named Firebelly, this time making it direct-to- consumer (DTC) only, with a limited portfolio of premium and wellness offerings. Segal's new venture is all digital, powered by Shopify. "The technology platforms make it much easier to start selling and we just felt it was the best way to launch the brand. People spend a lot more time on their phones or on their computers and with so many of us working from home, tea can become a little bit more of a ritual when you need that break in the afternoon". The reduced infrastructure of a DTC storefront has the advantage of allowing Segal to focus on his obsession: the tea itself. "We're trying to take it up a notch. "With Firebelly, we've only done 20 teas. Ten are single origin rare teas, and the others are blends with different herbs, spices, and fruits. We're not using any artificial flavoring in any of them - for example, we're using real Madagascar vanilla, instead of vanilla extract, real ginger, and real cinnamon. The flavouring in most mainstream teas is made in a lab." Not using any artificial flavourings, which tend to react chemically with the glue used on commercial grade pouches, also allows Firebelly to use a fully compostable bag, making Firebelly one of the first tea companies to do that. To further differentiate them, Firebelly teas are priced at a 10% premium to similar high-end competitive offerings, underscoring their unique points of difference and quality ingredients. When asked about the competitive landscape, Segal admits it's very crowded, but believes there's enough room for Firebelly. "Considering the competition in the fine tea market with players such as Barry's Teas, Harny's & Sons and The Republic of Tea, there's no real dominant player at the high-end," he says, "so there's room for me". Firebelly's business mission is focused on "enriching lives through tea". Firebelly is promoting its teas via digital and social advertising, adding that he sees his target customer as female ranging between 25 to 45, professional, urban, with a sophisticated palate. "She's someone who doesn't follow the mainstream, is looking for something different, and has an appreciation for the finer things in life". "We're just going to do our thing, curating incredible teas, and driving as much trial as we can. Because we really believe that when you try it, you're going to love it." Adapted from: Novosedlik, Will. "David Segal takes another swing at tea" strategyonline.ca. Brunico Communications Ltd, 25 January 2022. Web. 31 May 2022. W