Food and Drink

Loose Leaf Tea and 5 Star Restaurants-A Profit Opportunity

Dining at a fine restaurant is a real pleasure to most consumers but, considering the prices, the meal and service must be high quality and one that leaves an impression of value.

Value involves more that just the menu - the presentation must be perfect and the service must be attentive without being annoying. Anything less will negatively impact word of mouth advertising and repeat visits.

This is a very competitive business. There are many 5 Star restaurants and they are all competing for the same discretionary spending dollars. Perception of value and value added services are, therefore critical to success.

One area where many fine restaurants fail is the after dinner beverage – particularly if tea is the beverage of choice. There is nothing worse than ending a fine meal on a down note when the universal "tea box" is brought out and, combined with a luke warm pot of water, forces the customer to accept substandard quality. Perception of value rapidly disappears.

Some 5 Star restaurants have addressed this problem through the use of high quality loose leaf tea that presents the perfect cup of tea. Combined with the proper pot of near boiling hot water, quality loose tea and specialty tea offer the dining customer a very pleasurable tea experience. Fresh, quality tea in a variety of flavors puts the finishing touch on a quality meal and leaves the customer with a perception of value.

Is Loose Leaf Tea Popular?

Loose leaf tea has a very large following and the customer base expands every day. Specialty tea is one of the fastest growing segments of the tea industry and increases in double digits every year. Many tea drinkers are moving away from the weak, often flat taste of bagged tea to enjoy the robust flavor of a brewed cup of loose leaf tea.

Is Loose Tea a Profitable Product Line?

Because the taste and quality of loose leaf tea is so high, experience has shown that the retail price easily accommodates a price increase of $1.00 or more per cup. This profit margin increase, coupled with the fact that loose leaf tea costs only a fraction more to serve, results in dramatic increases in both revenue and profitability.

A Case Study

The fine dining market in our nation’s capital, Washington D.C. is comprised of sophisticated consumers and is very competitive. Notwithstanding this, business has suffered a down turn because of the economy and restaurant managers are looking for ways to maintain revenue and profits.

One of the many 5 Star restaurants has replaced the "tea box" with a high quality loose leaf tea line, serving dimmers and event customers with a broad line of uniquely flavored specialty tea. During the time the new line has been offered, pots of tea sold has increased 600% over the old tea line and profits have increased even more because of the higher price per cup. And customers love the flavor and quality of the new tea. Word of mouth referrals are up and many customers inquire about purchasing the tea for their own home.
The manager considers the new loose leaf tea line to be a true value added product.
Loose leaf tea is used more and more by fine dining establishments to increase perceived value and profits. The trend continues.