USA: Starbucks to close Teavana shops

Starbucks announced the closure of its 379 Teavana stores by spring 2018 due to persistent underperformance. When Starbucks acquired the premium tea brand in 2012 for $620 million the company already operated hundreds of franchised operations. But while Starbucks was very successful in attracting additional customers with Teavana products to their existing Starbucks stores, it could not generate sustained business growth by shifting customers habits in tea purchasing from the local grocery store to standalone Teavana stores in the regional shopping mall.

The decision to close the Teavana stores does not affect Starbucks joint venture with AB InBev in the Ready-to-Drink (RTD) tea market. In June 2016, both companies announced that they were working together to produce, bottle, distribute and market Teavana RTD non-alcohol premium tea beverages in the United States. In February 2017, Anheuser-Busch began shipping the first products of Teavana Craft Iced Teas to select grocery and convenience retailers in New Hampshire, New York, Vermont and Missouri (, 24.7.2017). The company announced at that time that Teavana Craft Iced Teas would initially only be available in grocery and convenience stores, but select flavors would roll-out to participating Starbucks locations nationally later this summer, with plans for national grocery and convenience store availability in 2018.

“While tea has been consistently been among the fastest growing categories within Starbuck stores, maintaining Teavana as a stand-alone chain dedicated to bulk-tea and accessories proved to be a less efficient and profitable strategy for driving tea consumption and revenue. In the end, Starbucks did not have the infrastructure to dominate tea-gifting the same way they have hand-crafted beverages, and Wall Street does not have the patience for investment in long-term shifts in consumer behaviors,” wrote Charlie Cain, who served as Teavana’s Vice President of Concept Development and Franchising up until January of 2015, in Building Oz.

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