Tapping Tea for Private Label in Foodservice
With tea growing in popularity as a meal accompaniment, should foodservice establishments create tea house brands? Linda R. Villano, co-founder of SerendipiTea, explores the benefits and challenges of developing private label tea programmes in foodservice.
By Linda R. Villano
The vast majority of foodservice establishments, regardless of the cuisine, theme, format or monetary value of average sale, have two items in common — coffee and tea. In most locales, despite geography, coffee has always taken precedence over tea but the gap has been rapidly closing the past few years. Consumers’ awareness of and increasing knowledge about tea is fueling the dramatic rise in tea consumption and in response, foodservice operators are focusing more closely on their tea menus and are looking to their suppliers for more education and guidance when making selections. In addition to offering a well-rounded, well-represented tea menu, private labelling or branding the tea being served as their own might be a consideration.
How does one go about private labelling or branding a tea line for foodservice? First determine whether loose-leaf tea (served in teapots or by cup using filters, infusers or strainers) or tea bags will be used. Loose-leaf tea can easily be branded or re-branded. If satisfied with your current tea supplier start there. If private labelling is not an option then branch out and seek reputable suppliers who are flexible, reliable and are open to private labelling. Some suppliers might provide permission to re-brand their tea as your own. Others might even apply your customized labels or white labels (void of the supplier company’s name and information) to all packaging. There will likely be additional cost for these services, be sure to inquire.
Many known companies are firm about their own brand identity being maintained and even identified but there are suppliers with strong brand recognition who are willing to share the credit through co-branding. For example, labelling on packaging or printed menus might read: XYZ Tea by XYZ Tea Company packed for ABC Café/Coffeehouse/Eatery. Some suppliers may hand over the reins entirely so that you are able to re-brand and rename all the tea selections as your own. This process should be simple and straightforward: tea is ordered as per usual then presented on a printed menu, ideally, as the exclusive line of said food establishment. This is the best scenario as there is no extra monetary investment, no extra labour, nor is there need for extra materials such as printed labels.
PL Challenges with Tea Bags
Private labelling tea bags, on the other hand, presents numerous challenges. But with the increase in tea consumption it has become an easily realized project as many manufacturers now offer this option. Unless operating a multi-unit establishment with high tea sales, branded tea bags might not be cost-effective. Such an undertaking is a commitment, and the feasibility and logistics should be weighed seriously.
- COST: There will be high minimums, especially when printing custom tags. Instead, you might explore white tag (generic) and tag-less quotes, but do know that minimums will still be high for the average sized restaurant/café/eatery. Also consider that in many cases there may be hefty down-payments then balances due upon receipt. Even if terms are extended these costs could be prohibitive.
- STORAGE: Should private label tea bags fit your model, be sure to inquire about minimum runs per tea type and storage options. It is quite common for co-packers to require that entire runs be shipped upon completion. Restaurants, cafés, teahouses and all other foodservice locales often order supplies weekly if not daily. This practice is not only to ensure that fresh ingredients are being used but also because in the foodservice industry space is often an issue. Is your physical location able to accommodate the inventory?
- VOLUME: Sure, purchasing supplies in bulk is great but margins in most foodservice operations are slim. Do your tea sales justify the high upfront expenditures? How long will it take to move through stored inventory? How long before any profit is realized?
- BENEFITS: Determine whether private labelling is a vanity project or a sound business decision. How will branding tea bags benefit the operation? Do these benefits justify the costs?
Is there truly any benefit to branding this one item on the working menu? Perhaps there is for a high-volume café, coffeehouse or tea shop but probably not for a free-standing restaurant or eatery. However, if there is a retail component to the business, either bricks and mortar or website, and other menu items are branded and being sold, then adding privately labelled tea (loose leaf or tea bags) to the mix makes good sense.
Having such options encourages customers to return to your location, either physically or online, for repeat sales. And in tourist areas, especially where gifts are purchased for “back home,” it behooves you to brand all saleable items – gift recipients should find you, not your tea provider, for repeat purchases.
If there is no clear added value, then private labelling the tea might not be a good idea. Instead, it may very well benefit both you and a supplier with a brand name and a prominent or even a growing reputation to be featured on the tea menu. Your supplier might provide a discount in exchange for the menu recognition. An example would be as follows:
ABC Eatery’s Tea Menu
By “XYZ Tea Company”
Black Tea Name
Green Tea Name
Oolong Tea Name
White Tea Name
Finally, keep in mind that without a brand identified or if the tea line is promoted as your own, it is likely that guests who enjoyed the tea served will inquire about the supplier and where to purchase. Do let staff know if you are willing to divulge the supplier if your establishment doesn’t resell. With a known tea company identified on the menu, your guests are able to easily find the selection they so enjoyed by contacting that company directly or by visiting that company’s website – a win-win for both you (happy guest) and your tea supplier (potential for additional sales).
To brand or not to brand? In the end, as with all business decisions, the “bottom line” will most likely be the “bottom line.”
Linda R. Villano co-founded SerendipiTea in 1995 with Tomislav Podreka. With a passion for all things tea, she oversees all aspects of the business including client consulting, concept and design, staff training, sourcing and product development (recipe creations). Linda is also a published illustrator and writer. Her illustrations appear in Tomislav Podreka’s book, SerendipiTea: A Guide to the Varieties, Origins and Rituals of Tea, and in addition to her blog she writes regularly about tea for trade publications.