Small Business

High Time for Tea in America


In a coffee society like the U.S., how do you turn people on to tea? If you're specialty tea outfit Republic of Tea, the answer is: sip by sip. "Our purpose is to get people to slow down their lives," says Ron Rubin, the company's chief executive and self-proclaimed Minister of Tea. "Our message is about lifestyle, health, and well-being. Coffee is all about speeding up, and tea is about slowing down."

"The problem in our country," he explains, "is that after the Boston Tea Party, this country became a coffee nation. We are trying to change that as best we can."

As revolutions go, the Republic of Tea's beverage mutiny has been quite successful. Originally established in 1992, the company has created one of the fastest-growing and most-lucrative high-end tea brands in the country. Unlike many mass-market outfits, the Republic of Tea scours the planet's tea-growing gardens, farms, and estates for leaves, and sells only the highest-quality premium products. "We don't negotiate on price," says Rubin. "We want only top quality."

SKYROCKETING SALES. Each year the company launches a slate of innovative brews. For starters, the company has introduced unique teas made from the South African Rooibos bush, as well as white tea, which is picked only two days each spring before the leaves open. The company dresses its products in packages with distinctive graphics.

Republic teas aren't cheap. They start at about $9 for a canister of 50 bags, while the more exotic and rare Imperial Republic Red Peony costs $30 for a 1.9-ounce bag of loose full leaves. Rubin says that annual sales have quadrupled since 1994, to more than $10 million. Growth has been brisk. Sold online and by mail order, the Republic's teas are also available at more than 20,000 specialty stores and restaurants, from Whole Foods Market (WFMI) to Four Seasons Hotels (FS).

The product line is constantly expanding and evolving. It began with 21 types of tea, and now boasts 180 brews (such as vanilla-coconut white tea and ginger-peach black tea) and bottled iced teas. The company has also introduced items such as honey, jam, and transfat-free stir-fry oil -- all made from tea.

BRAND IDENTITY. Clearly, Rubin is on to something. After spending decades -- if not a century -- in coffee's shadow, the market for tea in America is booming. Spurred on by its health benefits and the introduction of newer exotics such as white and red, the annual tea market is now $6.8 billion and growing. According to a study by market research publisher Packaged Facts the tea market is expected to reach $10 billion by 2010. The coffee market is $18 billion a year.

In addition to Republic of Tea, a number of other specialty outfits have entered the market. There's Tazo, based in Portland, Ore., Stash Tea in Tigard, Ore., and Honest Tea in Bethesda, Md. "I remember going to the Fancy Food Show in 1991," says Rubin, "and there were 12 tea companies. This year there were 73."

Rubin, who started Mount Vernon (Ill.)-based New Age Beverages in 1990, purchased the Republic of Tea in 1994 from Mel and Patricia Ziegler, founders of the original Banana Republic. He took the fledgling 22-month-old company, embraced its socially progressive mission, and created a distinctive and innovative brand identity. The company's cultural brand is based on the whimsical Republic of Tea -- a kind of metaphorical place of peace and tranquility which consumers will want to visit again and again.

TEA TITLES. Rubin, who calls himself a Zentreprenuer -- "an entrepreneur creates a business; a Zentrepreneur creates a business and a life" -- established a unique corporate culture that permeates all facets of the business. For starters, the company's headquarters in Novato, Calif., and its manufacturing center in Nashville, Ill., were both designed by a Feng Shui master.

Job titles are decidedly different. Rubin himself is the Minister of Tea, while the head of public relations is known as the Minister of Enlightenment. The head of marketing is the Minister of Propaganda. Even the receptionist is called the Minister of First Impressions. Members of the sales team are called ambassadors, retailers that sell the brand are dubbed embassies, and customers are proclaimed citizens. "This has helped to create an identity that separates us from other tea companies," says Rubin.

This distinctive image is most pronounced in the company's packaging, with its evocation of a faraway, inviting place. Teas are sold in recyclable tin canisters, with graphic designs unique to each type of tea, plus information about the tea itself, including the best way to prepare and serve it. The result is a very powerful brand identity that is both aspirational and accessible.

SOCIAL CONSCIOUSNESS. "They have done a very good job at creating a story of the brand," says Brian Collins, the executive creative director of Ogilvy & Mather's brand integration group. "It allows consumers to participate in the story, and tea becomes the artifact of the story. And they've done an incredible job with making the story authentic, using really beautiful design and packaging. And, above all, the product is pretty terrific."

From the beginning, the company has maintained a social consciousness. Its packaging is eco-friendly. In addition to using tin, all tea bags are unbleached and free of staples and string. Last year, Republic of Tea launched a line of five new Fair Trade-certified (as labeled by a global nonprofit organization, which ensures that farmers and workers received a fair price for their product) teas.

The outfit has made a number of alliances with like-minded companies. Its Sip-for-the-Cure line of five different green teas has contributed $484,000 of its sales to date to the Susan G. Komen Breast Cancer Foundation. A portion of its new Man Kind Tea, introduced last year, supports prostate cancer research.

FIELD TRIPS. In January, Republic of Tea began selling J. Garcia Artisan Teas, a line of five teas in limited-edition tins with art by the late Jerry Garcia of the Grateful Dead, to support art programs for homeless children. This year the company is launching a new line of wellness teas. "We are constantly innovating," says Rubin.

Of course, the Republic of Tea is only as strong as its citizens, and so each year Rubin sends a team of his "ministers" and "ambassadors" to one tea-growing region for a 10-day educational trip. Twenty-four will head to India this year. In 2005 they went to South Africa to study new herbal teas. "They come back more knowledgeable," Rubin says, all in an effort "to help lead the tea revolution." The Republic of Tea way -- sip by sip.


Steve Ballmer, Power Forward
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