Starbucks dumps tea bar concept, keeps tea

By Matthew Stern

JANUARY 27, 2016

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Starbucks has been instrumental in creating what we now know as "coffee culture" in the U.S. over the past few decades. But its attempts to create a similar space for coffee's less bold cousin, tea, have been less successful. The company recently announced that it was closing the majority of its Teavana "tea bars."

According to ABC News, Starbucks is converting the three Teavana locations in New York into Starbucks coffee shops and closing down the location in Beverly Hills. The remaining Teavana in Seattle will stay open as a place to experiment with new ideas. The 350 Teavana retail stores, which sell CPG tea and tea-related accessories and have no foodservice element, will not be affected.

Starbucks began exploring the tea-only store concept in 2012. With talk of customized tea blends and immersion in all things tea, it was clear at the time that Starbucks was looking at pioneering a "tea culture."

Shortly thereafter, Starbucks acquired Teavana, and by 2013 Starbucks had begun moving Teavana brand tea into its retail outlets to replace Tazo.

Photo: RetailWire

Around the time of the Teavana acquisition, Starbucks had planned to convert more Teavana retail outlets into tea bars, according to ABC News.

The Teavana closures echo Starbucks' actions with another of its acquisitions, La Boulange, the Bay Area-based pastry chain picked up in 2012. The company indicated it planned to roll the chain out nationwide. In mid-2015, Starbucks announced it would close all 23 of the La Boulange locations, but would continue to serve La Boulange products in regular Starbucks stores.

According to a SFGate article from the time of that announcement, Starbucks' year-over-year food sales were up 16 percent and breakfast items were up 35 percent.

Similarly, while Starbucks is turning away from the "tea bar" concept, Teavana tea itself has actually proven to be quite popular. The product recently saw a jump in sales according to the Puget Sound Business Journal. The Journal said that there has been a 12 percent spike in sales year-over-year for Teavana products, bringing in sales of nearly $1 billion.