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New Year, New Beginnings. This doesn’t necessarily mean all new beginnings will be good. At least not for about 70 tea workers[1] that will enter the 2019 without a job. Redco tea company closed its factory in Little Falls, New York on December 14th. The company has been in the ownership of two brands with very long history - Salada and Red Rose Tea. Looking back, it appears this year was not a good year for running a tea business. In fact, tea might not always be a good idea, at least for those trying to make a living out of leaves.

A Turbulent Year for Tea Companies

This year has been quite turbulent for many big tea brands. It all started with Teavana, one of the most popular tea companies with a huge base of tea fans. Then, early this year came the notice from the American Tea Room about closing for good. And tea drinkers were shocked again. And the reality is even crueller. Those two big companies might made it into headlines with their closures, but there are many more that didn't gain profits and reach their targets this year. This shouldn’t be of surprise, because we all will agree, anything is possible in business. What surprises is even the big tea brands struggle to survive.

Every business starts from a scratch

It seems neither the popularity of the brand or the popularity of its creators impacts the sales of their products. Boutea, a tea company founded by a former rugby player Adam Ashley-Cooper in Australia is closing this month after two years of selling loose leaf tea. Boutea says they are forced to close due to low sales. 70 000 followers were not really interested in tea, regardless of the outstanding packaging and popularity of the founder.

Even the companies with organic products seems to fail. Rooibee Red Tea is one more company that closed after 10 years of business. And the list goes on. Some decided to close its brick-and-mortar shops and try luck with an online tea store. But, will they survive? Are tea drinkers becoming unpredictable? Or is the market over-saturated?

(Image Source: Tea Chronicles ©)

Redco tea company closed

Some of the above brands had been selling teas for more than a decade. But, Redco Tea had been in business for 60 years.[2] On the 14^th December, the company stopped all tea production in Little Falls. However, unlike Teavana and American Tea Room, Redco‘s closure is having a much bigger impact on tea workers than tea drinkers.

The license for two Redco brands, Red Rose and Salada, now belongs to Harris Tea company. Both of them where established over 100 years ago, and changed license owners throughout the history. World Tea News report that both brands “suffered during the past few years from a slowdown in sales of no-frills, tag-less, traditional bagged tea.”[3]

So, who is taking the money?

Global tea market is worth around 50 billion U.S. dollars.[4] Many companies recognized the opportunity to sell tea, but overseen the obstacles of running a tea business. Some teas might have been very exciting in the past, but failed to keep up with the fast moving industry and preferences of tea drinkers. Is there a pattern in all these closures? Did they underestimated their customers or simply had bad luck? The question is – what do tea drinkers want?

[1] https://b1047.iheart.com/content/2018-10-05-redco-tea-closing-doors-permanently/

[2] https://www.wktv.com/content/news/Tea-production-to-cease-at-Redco-Foods-after-sale-to-Harris-Tea-Company-494974621.html

[3] https://worldteanews.com/tea-industry-news-and-features/harris-tea-acquires-red-rose-brand

[4] https://www.statista.com/statistics/326384/global-tea-beverage-market-size/