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Tea in Spain Smiles Again

From Rustic To Colonial Elegance
In Spain you need to put a lot of added value into your product. you have to control the concept, personnel service, storage, packaging, decoration and distribution.

But what is The Tea Shop? As it can be deduced from above, The Tea Shop of East West Company was one of the first tea stores in Spain that sold exclusively tea and tea accessories. Today they sell around 120 varieties of tea. That is the ideal number, since ”more varieties mean less circulation, and that is not good for fresh tea” explains Sundmalm. The original idea came from a famous Stockholm tea store in the popular quarter of Sodermalm, whose owner considerably helped Sundmalm to start up the business. When Sundmalm first started, he was living on a shoestring and resources were very limited. He went as far as to unload fish during the winter in Northern Norway, in the Arctic Polar Circle, to earn sufficient money to start up the shop of his dreams. His brother, a boat interior designer and carpenter, helped him out with the decoration of the shop. The store, with its recycled wood shelves and counter, mellow lights, and salespeople clad in green aprons, projected an old world atmosphere where professionals were there to serve and give advice. That has not changed, but the style of the outlets has evolved from rustic to colonial elegance boutiques. Sundmalm explains that, “I wanted to endow the product with the exquisite ‘wrapping’ it deserves.” Eleven years after they started operations, he explains that their goal “is that our trademark - The Tea Shop of East West Company - be recognized as a quality seal that guarantees that our chain of specialized exclusive boutiques only sell high quality teas.”

The Tea Shop has steadily evolved into what it is today - a commercial network with 15 stores in some of the best locations in Spain and, all together, more than 45 workers. It took three years before they could open the second store in Barcelona. But ever since 1995, when The Tea Shop inaugurated its first shop in the capital of Spain, Madrid, it has opened between two to four shops every year. In 1996-97, the idea of franchising first crossed Sundmalm’s mind when a lady from the neighboring city of Tarragona approached him and announced to him that she was planning to open a teashop, and that she would like it to be just like the ones he had in Barcelona. However, when the idea of franchising did take hold of him, it was not with a view to setting up loads of stores in order to become a millionaire overnight. Rather, he wanted to work with people who shared his passion for tea. Sundmalm’s 10 years of expertise are an invaluable asset at the service of franchisers who are thought of more as associate tea specialists. “In Spain you need to put a lot of added value into your product. You have to control the concept, personnel service, storage, packaging, decoration, and distribution,” remarks Sundmalm, and that is no easy task. In his early days in the business, he looked for new locations for distribution in gourmet stores such as fancy chocolate shops. However, not all of them could guarantee the quality of such specialized products or the service they required. Fresh tea resented this lack of attention, and customers’ perception of the Tea Shop products was distorted, so this line of distribution was interrupted. He concluded that the best way to sell tea was in his own highly-specialized stores. Time has proved him right. But what Sundmalm did not expect was that tea paraphernalia would have almost as much success in Spain as tea itself. In fact, in the past 10 years, sales of tea complements have grown threefold. Today, tea represents two thirds of the business, whereas tea accessories and tea related products - fancy sugars, jams or biscuits - now represent one third of total sales.

The core of the business remains the same - tea. The 2,000 kg of tea The Tea Shop sold in 1990 will reach 70,000 kg by the end of 2001. Hence, regardless of the negative predictions of the first customers, the tea business flourishes. Consumption in Spain is still very low when compared with the U.K., for instance, where 37 million Britons drink tea every day, and 76% of the total population does so regularly. Other EU citizens such as Germans, French or Italians drink considerably more tea than Spaniards. However, even though Spain remains mostly a coffee country - almost 99% of its population prefers coffee - since 1990, tea consumption in this country has notably increased. While in 1990, Spaniards drank approximately 1,000 tons of tea, by 2002 this figure is expected to rise to 2,500 tons, i.e. it will have almost tripled in 11 years. East West Company market share has also increased from less than 1% in 1990 to 3% in 2000, and by the year 2002 they expect to obtain 4% of the market. Their percentage of the market share is much higher if we consider only the market of high quality loose leaf tea.

The Development Of A Spanish Tea Culture
Spaniards love everything that is sweet or citrus flavored: orange, lemon, tangerine, vanilla or any kind of berry; scented teas make up 80% of total sales.

When it comes to drinking tea, British consumers are quite different from Spanish ones. While Britons take tea for granted and usually drink the same type, Spaniards are very curious and like to try new things, being mostly attracted to everything that is exotic and different. U.K. consumers, for instance, prefer strong, bitter tea with milk. Spaniards, on the other hand, love everything that is sweet or citrus flavored; orange, lemon, tangerine, vanilla or teas containing any kind of berry are a roaring success. Scented teas make up 80% of sales vis-à-vis 20% of pure teas. But not only the types of tea consumed in Spain are different, the way it is drunk also differs from other European countries. Here it is savored with considerably more sugar but rarely with milk or cream; green gunpowder tea with fresh mint is also quite popular. And despite what one might think, women consume only slightly more tea than men do, the proportion being around 60% female/40% male according to the personal experience of The Tea Shop.

Spanish consumers are now much more sophisticated than they were in the recent past. Only think that Spain entered the EU in December 1985 and that until then, the Spanish market had been notably closed to foreign goods, being mostly supplied by local manufacturers. Tariffs on imported products were relatively high and the standard of living quite a bit lower than it is today. Not only that, people used to travel far less than they do today, and coming into contact with other cultures has obviously opened up their minds. In a way this has also influenced the way in which Spanish people perceive tea nowadays. Quality and supply have dramatically increased for most products. El Corte Inglés supermarkets, an old reference for The Tea Shop, now offer around 30 types of tea of different trademarks, mostly British. Besides, tea is not only consumed in teabags anymore. Rather, high quality loose leaf teas are becoming more and more popular. And the number of fancy coffee shops that also offer a wide menu of gourmet teas and coffees has rapidly expanded all over the country.

The amount of information that has appeared in the media about the health benefits of tea has positively influenced the way Spanish people perceive it, inducing them to consume more. This success is partly due to the 1998 FAO tea campaign conducted by the U.K. Tea Council. During that year, their activities were limited to Barcelona and Catalonia. Within this program the U.K. Tea Council tried to promote a tea culture in Catalonia through a series of exhibitions, tastings and events in which The Tea Shop of East West Company actively collaborated. A number of articles have also appeared in national newspapers, dramatically increasing the interest of Spanish consumers in the world of tea and its benefits. As a result of these efforts, green and Puh Erh tea (known as red tea in Spain), have become rather popular, especially Puh Erh tea, due to its beneficial weight-loss properties.

The Tea Shop Looks At The Future
The Tea Shop is slowly opening new lines of business such as distribution to top-of-the-range restaurants and hotels. there are even plans to repeat the positive Spanish experience in Italy.

Eleven years after Sundmalm opened his first shop in Spain, the market has finally started to blossom. But still much remains to be done. “It can take between two to three years for a tea business to prosper and to establish a faithful clientele. A tea shop in Spain has always been and will continue to be a lot of hard work,” he stresses. Now The Tea Shop is slowly opening new lines of business such as distribution to top of the range restaurants and hotels. There are even plans to repeat the positive Spanish experience in Italy, but this is subject to finding the right associates - people who share the same passion for tea as Sundmalm’s associate tea specialists do here. Growth is expected in medium and large cities since only there can fancy teashops thrive.

In Spain, tea still remains a gourmet product for minorities and people with exquisite palates. “A tea shop will not survive here if you are not a true professional with a profound knowledge of the market,” comments Sundmalm. “We continue with our plan of opening one or two shops per year and, to tell you the truth, so far we do not see any really serious competitor in our specialized arena.” That is not surprising, since only fancy supermarkets, coffee roasters, herbal shops, or delicatessen stores carry similar products. But who can compete with a company whose motto is “only tea, only tea, only tea”?

Thanks to its entrepreneurial spirit and commitment to quality, the volume of The Tea Shop of East West Company is large enough to guarantee fresh tea to every client. In fact, fresh tea is delivered weekly to each store. No wonder the clients keep coming back for more.

Tea & Coffee - March/April 2002


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