Every week or so when I blather on in this blog about all manner of things, I get well-meaning advice that I should really be writing about our business and our teas, but generally I don’t unless forced to. This is such an occasion.
We are announcing the closing of our associated business The Devotea LLC, which was formed in 2012 in the USA to blend our teas under licence and sell them.
For over 5 years Nicole Schwarz has juggled her career as an extremely clever person in the IT space with blending / selling / packing/travelling /writing / adding up numbers and all the other things an independent business person does.
It’s fair to say that despite tremendous support, there are four fundamental problems with our business model in any market we attempt to launch. Let me admit to them now:
ONE: We use expensive teas.
The teas we use are all orthodox, often hand rolled. We buy them in small batches and blend with them. Over the years, we have realised that this means that we are priced above what people expect to pay for blends, but conversely, those people who are willing to pay a little more for tea are often interested in exploring single origin, not blends. While we do have some single origins on offer, it’s not really what we promote or where our heart is.
TWO: Even expensive teas are too damn cheap
The fact is that a box of 100g will make up to 50 cups of tea. So any customer who buys two boxes – our most common quantity on-line and at markets etc. – doesn’t need to revisit us until they have drunk 100 cups of tea – that’s over three per day for a month. When you consider that many people don’t drink that many cups and also that they make like to purchase tea from multiple sources, that means the per customer return is not high.
THREE: We won’t lie about health benefits
There are successful small tea companies out there, and the keystone to many of them has been to blatantly exaggerate health claims. “Detox” teas, weight loss teas, calming teas, teas for digestion (that’s how PG Tips got started!). It’s not just tea companies – look at the claims about oats reducing cholesterol and then look at the science behind that one for a great example – but there are companies making claims right now that are the same claims that saw people sent to prison for fraud just thirty years ago.
FOUR: We are not channel-friendly
Over the years, we have had many opportunities to sell through channels – shops, cafés etc. while there have been some that have wholeheartedly supported our approach, we’ve often been replaced by vendors willing to either bag their tea or splash health claim exaggerations across the packets.
So, you can look at the above list and see that we are a group of people who know where we sit, ethically and professionally, and that we are to be admired. Or if you’ve got an MBA, you might see that we are a bunch of clowns who refuse to listen to the market. I’ll take the blame for both.
Nicole could not have worked harder nor invested more time, effort or resources. It’s a similar situation here in Australia.
But in Australia, we have morphed The Devotea into an informational, educational, entertainment sort of business. We put on events, mainly in our home town of Adelaide, South Australia. We enjoy them. People turn up repeatedly. It keeps things chugging along. That came about by chance, but also the good fortune that our particular collection of non-tea skills give us the opportunity. Having experienced trainers and also experienced chefs on our team, for example.
We know that there are going to be a few dozen or a few hundred people very disappointed that they won’t be able to get their favourite blend, unless they order it from Australia and pay astronomical postage. It’s the thought of you guys in that category that has kept Nicole operating longer than any sane analysis of the facts would allow.
In 2012 we expanded into the UK and the USA with great hope but not much else. The UK experiment lasted just a year, but Nicole’s efforts have been incredible and we are honoured to have taken this journey with her.
The Devotea’s USA store will close on December 31st 2017 unless all stock is sold earlier, so as a small silver lining, you can stock up and probably get a bargain at the Devotea USA store here.