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Coffee Giant Tea Shops

Starbucks Tazo Store in Seattle Will Be a Tea Drinker's Paradise

— June 25, 2012 — Lifestyle
Starbucks has taken over the coffee market, and now it just might take over the tea market as well with its new Starbucks Tazo store. Set to be launched in Seattle's University Village near the brand's headquarters, the Starbucks Tazo store is a concept shop that will offer more than 80 varieties of Tazo loose leaf tea (Tazo is the tea brand Starbucks acquired in 1999 for $8.1 million), as well as coffee shop favorites like pastries and chocolate. However, what sets the Tazo store apart from tea shops like David's Tea or Teavana is its unique blending station that allows customers to blend and create their own teas to take home.

The Starbucks Tazo store will be the company's first major foray into the global tea market, a $95 billion industry. As Business Week puts it, Starbucks is "expanding its offerings beyond coffee to win new customers and help accelerate sales growth." Although the Tazo store in Seattle will be the only location dedicated to tea for now, Starbucks will consider adding new stores if other location-based opportunities arise.
Trend Themes
1. Custom Tea Blends - The Starbucks Tazo store's unique blending station allows customers to create their own tea blends, paving the way for personalized products and experiences in the beverage industry.
2. Diversification - Starbucks' expansion into the global tea market shows the benefits of diversifying a brand's offerings to attract new customers and boost sales growth.
3. Premiumization - With the Starbucks Tazo store's focus on loose leaf tea and high-quality blends, there is an opportunity for the tea industry to premiumize and offer more sophisticated products to consumers.
Industry Implications
1. Beverage - The Starbucks Tazo store's introduction to the tea market signals a potential shift towards diversification and personalized products within the beverage industry.
2. Retail - Starbucks' possible expansion of Tazo stores and the launch of a new tea market presents a potential growth opportunity for the retail sector.
3. Hospitality - The premiumization of tea and customized blends could impact the hospitality industry, as hotels and restaurants may see an opportunity to offer innovative tea experiences to their guests.
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