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Why are the big tea shops closing down? Teavana is old news. Here comes the announcement about American Tea Room, another big tea company, suddenly closing for good. In November 2017 American Tea Room closed its three tea bars in Los Angeles, but kept the online tea shop business, only to announce three months later that their tea story is finished for good. Teavana and American Tea Room had a very different concepts and prices, yet they couldn't survive. What does it mean for small tea retailers? Are consumers changing its habits or were some of these tea dreams way up in the sky?

Why are big tea shops closing down when tea is more popular than ever?

When shops like Teavana and American Tea Room fail to survive after years of being in business and successfully establishing a brand, the small tea shop owners might feel a speck of doubt for the future of their own efforts. On the other hand, there might be an opportunity to finally expand the business and find new loyal customers searching for another brand to satisfy their thirst for tea. But, is that so easy?

(Image Source: Tea Chronicles ©)

Spreading tea, spreading joy, spreading health

Fifteen to twenty years ago a new tea trend appeared in the West - from the United States to Europe, tea shops offering flavored teas started popping out, luring curious customers with intense scents and unique blends. They all offered similar products and everything that came along - from extreme health benefits to creative stories about the tea origin and interesting myths. Tea was becoming popular, posh drink for all those that wanted a healthy, but fun and colorful life full of scents and flavors. Every trendy person started drinking tea and sharing their newly found love with others. That's when Teavana was born. American Tea Room appeared only a few years later with a different idea - spreading the quality tea and creating tea drinking habits among more serious drinkers and those willing to pay a bit more.

The Question of Concept and Prices

While Teavana tried to follow the fast-tea concept, American Tea Room had a quite opposite approach with its tea paradise lounge ambient and pricey menu. The idea of having a tea room sounds alluring, but with the ever-changing tea trends this might be more difficult than ever. With the expansion of internet and the simplicity of buying online, tea drinkers have a wast universe of choices for a very affordable price. Next fact that shouldn't be neglected is that tea is becoming a drink for solo drinking. Slow gongfu brewing in tiny teapots is slowly replacing the habit of drinking in company, while the luxurious and pricey tea parties still seem to be reserved for prestigious locations, glorious scones and cakes accompanied by a simple loose leaf tea with a generic name.

Where exactly did things go wrong?

Finally, there is DAVIDsTEA, big Canadian tea seller that announced possible sale and store closures after twenty years of business. Are they next?

There are certainly a lot of factors that contribute to the success of a tea business, and with the fast-changing trends and demanding and knowledgeable drinkers, tea shops need to be fast in detecting the right time, right place, right teas and the right concept.

Was it the wrong location for offering a tea lounge concept? Was it the service? Or was it because they offered loose leaf tea that these days one can easily find online for a more affordable price?

We would love to hear your opinion.