New options help the brand grow in Brazil, despite the pandemic and the impoverishment of the population
Tea Shop, a brand that emerged in Spain three decades ago and has been in Brazil for just 10 years, is launching new franchise models to expand its presence in the country. Present in 16 states and in more than 40 operations, the brand only operated through stores or mall kiosks. With the pandemic and the economic crisis, the Tea Shop CEO in Brazil, Michel Bitencourt, responsible for bringing the brand to Brazil, decided to face the bad news with courage and an outside-the-box thinking: “we created the six to nine square meters kiosk, the Tea Express (cart for shopping malls and shopping centers), the Córner Tea Shop and the Tea Moments, options ranging from R$ 10 thousand to R$ 500 thousand of investment,” explains the entrepreneur.
“As a result, during the two years of the pandemic we did not close any stores. What’s more, with an investment in our website, our revenue leaped 13%,” says Michel.
The franchise for a conventional Tea Shop store can cost up to R$500,000, an amount that few Brazilians have available at a time of weak retail sales. This is where betting on more economical models proved to be a success. “The quality of the products remains the same, even better. But now, with an investment starting at R$20,000, it is possible for a franchisee to set up a Tea Shop corner inside an existing establishment, such as a clothing store, bringing a tea-loving audience to the place. “This is very interesting, since the change in the tea consumption behavior in Brazil over the past 15 years has considerably increased due to a series of factors,” says Bitencourt.
“In this way, we circumvent the issue of the impoverishment of the Brazilian population during the pandemic. Apart from politicians and public servants, who did not have their incomes affected, the other Brazilians, employees of private, self-employed companies, not to mention those who lost their income, caused sales of all goods to fall. But, at the head of an operation such as the Tea Shop, exercising the role of manager, we cannot stop. Our role is to face the situation, however adverse it may be, and work to seek solutions,” he explains.
“We already had some projects designed, but the pandemic only accelerated the process, which made us put the new models into operation more quickly. Moreover, people are more concerned about how health and tea, which are not medicines, can help maintain good health. And Brazilians are learning that drinking tea is good in itself. They can drink it just for pleasure, despite the fact it has no specific function,” he explains.
Other formats
A Tea Shop mall store costs, on average, R$500,000. A 12 square meter kiosk will cost about R$250,000, as they are created with expensive, robust materials such as high-quality wood, marble and glass. In order to diversify things, six to nine meter kiosks have been created as well as Tea Moments, a model in which the partner becomes a Tea Shop representative in their region, with an investment in the business starting from R$ 10 thousand. “It’s a very smart way we’ve found to grow in smaller cities in the countryside of Brazil and it’s been very successful, because one can have an extra income and resell our products to coffee shops, bakeries, emporiums and restaurants in the region,” he explains.
“The consumption of tea in Brazil is not just a necessity or a health benefit. Now, tea lovers started to consume it for pleasure and the doors of consumption have widened a lot. Hot tea, iced tea, smoothies, ingredients for cooking, harmonization, cosmetics line… tea is available at all times of the day,” the executive recalls.
The war
The thorn in the side of the Tea Shop’s continued growth, which has been keeping many people awake at night, is the continuation of the conflict between Russia and Ukraine. “Usually, in retail, sales performance in the second half of the year is always better, thanks to Black Friday, Christmas and the 13th wage. However, this year, we are a little fearful because we will have an election in Brazil, the World Cup and the intensification of geopolitical tensions, mainly between China and the USA. If it wasn’t for that, I would risk to say that we would hit our goals once again. But I’d rather be realistic and deal competently with the demands,” concludes Bitencourt.
Tea Shop in Brazil
There are more than 40 stores in 16 states – São Paulo, Rio de Janeiro, Brasília, Belo Horizonte, Porto Alegre, Curitiba, Salvador, Fortaleza, Recife, Goiânia, Cuiabá, Vitória, Florianópolis, Maceió, João Pessoa, Santos, Gramado, Balneário Camboriú, Niterói, Vila Velha, Londrina, Caxias do Sul and Canoas.
Tea Shop worldwide – More than 100 stores in five countries: Italy, Portugal, Argentina, Spain and Brazil. (read the story about the creation of Tea Shop: insert a link to the interview with the Tea Shop CEO)
