Brewing a new tea culture

This summerm, Chinese youngsters are rediscovering their culture’s time-honoured tradition of tea drinking as a fashionable pastime with a rising number of businesses modernising the way the beverage is consumed.

Casual spaces for tea lovers to gather and savour the beverage are mushrooming.

Last June, health food restaurant chain Element Fresh launched Vital Tea, positioning its new ‘tea cafe’ as an alternative to coffee shops and teahouses.

“Everybody loves the cafe experience, but not everybody likes coffee – certainly not every day,” says Frank Rasche, chief executive of Element Fresh.

The company believes tea consumption outside the home has been dominated by either expensive and formal teahouses or cheap and convenient ready-to-drink teas that lack the quality of freshly brewed leaves.

To remedy the situation, the company opened the chain and invited aficionados to enjoy freshly brewed concoctions in a relaxing environment.

Vital Tea offers a wide selection of fresh herbal and flower teas, tea lattes and carbonated iced teas.

Although the company refused to disclose annual revenue figures, it noted that in less than a year, it was able to open seven stores in Shanghai.

Its expansion plans include 10 new stores in the city this year and several hundred stores in other cities across the country.

“There is no reason why the size of this category in the long term should be less than that of the coffee shop [category],” said Echo Shi, brand manager of Vital Tea.

The tea cafe segment is expected to grow significantly in coming years, supported by a strong tea-drinking culture and new lifestyle habits of the younger generation.

The China International Tea Cultural Institute estimates there were more than 126,000 teashops in China last year.

“In the past, Chinese consumers usually had tea at home or in the office,” says Neil Wang, global partner and China president of international consultancy Frost and Sullivan. “Nowadays, a growing number of consumers, particularly young people, prefer to gather and chat over tea at exclusive tea shops.”

Entrepeneur Li Hui and his business partner Pu Pengtao co-founded Ten Plus (Shiyiqu in pinyin), a large, quiet tea cafe in Beijing’s eastern Hepingxiqiao area where customers relax, unwind and sip varieties of Chinese teas.

The tea cafe is decorated with contemporary furniture made by local artists drawing inspiration from traditional Chinese elements.

“We started the business to attract the young generation, to get them involved in this traditional culture, because today’s young people don’t like old things such as tea,” Li says

The salon organises evening tea-tasting parties three times a week. For 50 yuan (around Bt250), customers get the chance to enjoy five to six types of tea. What’s more, while at it, they can buy tea-related accessories and books, attend calligraphy classes and take guzheng lessons.

The business is progressing well, and revenue grew 30 per cent last year, Li says.

The tea industry revenue is projected to grow at an annual rate of 7.1 per cent to $27.5 billion in 2020, according to business intelligence firm IBIS World.

Tea consumption in China – 2 million tons in 2015 – is expected to increase 5 to 8 per cent on average annually till 2020, according to Frost and Sullivan.

To make the most of the tea craze, Martin Papp, a US national, set up Papp’s Tea in April last year. The Beijing-based company specialises in tea-related services. Its first venture was a contemporary tea cafe for urbanites looking for new drink experiences.

“We wanted to be fun, hip and energetic and show people that even though tea is an ancient drink, it has the potential to be the coolest, most fashionable beverage,” Papp explains.

To his surprise, he soon had to reassess his business model to become a supplier of loose tealeaves and teabags to local food enterprises that shared his dream of adopting a modern approach to the drink.

“Our main purpose now is to support other local food-and-beverage brands that want to have a good selection of tea blends,” Papp says.

For him, it is only a matter of time before F&B entrepreneurs realise the need to offer casual, comfortable spaces for tea aficionados, just as the new-age coffee shops do.

The company also trains clients so that they can also create their own original and contemporary tea products, including alcoholic tea cocktails.

The tea distributor has already secured a dozen supply contracts from restaurants and cafes in China, including health food restaurant chain Moka Bros and Japanese style diner Hatsune.

The deals have enabled Papp’s Tea to generate monthly revenues of 200,000 yuan, and sales are gradually increasing, he says.