Thursday, September 17, 2009
Milton Pedraza, chief executive of the Luxury Institute, a market research company in New York, said he believed that many tea suppliers had seen tea as a mass-market commodity and sold it that way, leaving space for entrants at the high end of the market.
“With the growing popularity of tea, there is an opportunity to differentiate at the top level, even in these challenging economic times,” Mr. Pedraza said. “There is consumer interest in the premium end of almost any category, and I believe a larger segment of tea connoisseurs can be developed globally. But it will take a great deal of education to help consumers to discern differences and be willing to pay a premium, so it will be a slow build.”
The global economic crisis may have dampened the appetite for high-end goods, but one small daily luxury – gourmet tea – has been posting surprisingly strong sales, prompting some tea brands to consider expanding around the world.
Their offerings have poetic names like Silver Moon, Emperor’s White Garden, Goût Russe Douchka and Sakura, Sakura!, which reflect the wide range of exotic flavors, attracting an almost religious following among tea lovers. While the rarest teas, like yellow teas, can cost $2,120 for a kilogram, or 2.2 pounds, gourmet teas cost 30 percent more than standard teas on average, making them an affordable luxury for many.
“There is definitely no crisis when it comes down to gourmet tea; our sales have been increasing every year by 15 to 25 percent ever since we started in 1987,” said François-Xavier Delmas, founder and chief executive of Le Palais des Thés in Paris.
He said the privately owned French company posted annual revenue growth of 19 percent in 2007-8, with sales of €9.66 million, or $14.2 million.
Le Palais des Thés’ experience has been similar to that of other luxury tea brands, as well as specialist retailers.
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