Success Crafted

Teavana: The Rise Fall and Legacy of Starbucks’ Tea Retailer

Teavana’s Background and Growth

If you are a true tea lover, you have probably heard of Teavana, the now Starbucks-owned tea retailer that offers an unmatched selection of high-quality teas, tea accessories, and gifts. But have you ever wondered how Teavana became the successful company it is today?

Founding of Teavana and Andrew T. Mack’s Experience

Teavana was founded in 1997 by Andrew T.

Mack, who was passionate about tea and well-versed in the art of blending. Andrew’s experience in the food and beverage industry, coupled with his travels to exotic destinations around the world, inspired him to start his own tea business.

Teavana started as one store in Atlanta, Georgia, and quickly gained popularity among locals who appreciated the high-quality teas, impeccable service, and ambiance. Growth of Teavana through Franchise Model and SKM Growth Investors’ Investment

To fuel its expansion, Teavana adopted a franchise model, allowing it to open stores in new markets without undertaking all the risk and capital expenditure associated with opening a new store.

This proved to be a successful strategy, as Teavana quickly grew to over 100 stores in the United States and Canada by 2011. In 2011, Teavana attracted investment from SKM Growth Investors, a private equity firm, which helped it to further expand its footprint and improve capacity to serve a larger customer base.

Teavana’s success caught the attention of investors, and in 2012 the company went public, raising $102 million dollars in an initial public offering. Teavana’s IPO and Acquisition by Starbucks

In 2012, Teavana’s fortunes continued to soar as the company went public, and its shares were listed on the New York Stock Exchange under the ticker TEA.

The IPO was a resounding success, as the shares of Teavana soared on the first day of trading, closing at $27.80, up 64% from the initial offering price. In November 2012, only days after its IPO, Teavana announced that it was being acquired by Starbucks, one of the world’s largest and most recognized coffee chains, for $620 million, making it the largest acquisition in Starbucks’ history.

Teavana became a wholly-owned subsidiary of Starbucks, and the specialty tea offerings were integrated into Starbucks stores across North America, providing customers with an even wider range of options for tea enthusiasts. Teavana’s Expansion and Partnership with Starbucks

After being acquired by Starbucks, Teavana continued to expand its presence across the globe, leveraging Starbucks’ vast resources and expertise in retailing.

Teavana’s Expansion into Mexican Market and Acquisition of Teaopia Ltd. In 2013, Teavana opened its first store in Mexico, a move that signaled its desire to expand into new markets and connect with a wider audience.

In the same year, it also acquired Canadian tea retailer Teaopia Ltd., with the aim of strengthening its presence in Canada.

Synergy between Teavana and Starbucks after Acquisition

The acquisition of Teavana by Starbucks proved to be a mutually beneficial partnership, as it allowed the two companies to leverage each other’s strengths. Starbucks, with its formidable brand and resources, was able to provide Teavana with the necessary support to rapidly expand its footprint and grow its business.

Additionally, Starbucks’ expertise in retailing helped Teavana to improve its operational efficiencies and optimize its supply chain. In return, Teavana brought a new dimension to Starbucks, allowing the coffee giant to capture the growing demand for premium teas and diversifying its offerings to cater to the increasingly discerning tastes of consumers.

Teavana’s Expansion into India and Europe

Building on the success of its North American locations, Teavana continued to expand its presence, opening stores in Europe and India. In 2016, Teavana opened its first store in India, in partnership with the Tata Group, a leading Indian business conglomerate.

This helped to introduce Teavana to a new audience, while also showcasing the diversity of Indian tea culture to the rest of the world. By 2017 Teavana has over 379 stores worldwide.


The story of Teavana shows how a passion for something, coupled with a deep understanding of a niche market, can lead to the creation of a successful business. Teavana’s dedication to providing high-quality teas, exceptional customer service, and elegant store ambiance has made it a favorite among tea lovers worldwide.

Its acquisition by Starbucks has allowed it to leverage that success and expand its footprint even further into new markets while remaining true to its roots. Teavana’s Decline and Closure

Teavana, once a rising star in the specialty tea retail industry, began to experience a decline in sales shortly after Starbucks’ acquisition.

Despite Starbucks’ efforts to leverage its expertise in retailing and improve Teavana’s operational efficiency, the company continued to struggle. Ultimately, Starbucks announced its decision to close all 379 Teavana stores in the United States and Canada in July 2017 to focus on its core business.

Starbucks’ Decision to Close All Teavana Locations

Starbucks’ decision to close all Teavana locations was seen as a strategic move to streamline its operations and simplify its growth strategy. Starbucks cited declining foot traffic to shopping malls and a challenging retail environment as contributing factors to its decision to close all Teavana stores.

While the move was undoubtedly disappointing for Teavana employees and fans of the brand, it allowed Starbucks to focus more on its core business, including its coffee and food business, which accounts for the vast majority of its revenue. Simon Property Group’s Lawsuit and Settlement with Starbucks

In 2018, mall operator Simon Property Group filed a lawsuit against Starbucks, arguing that the closure of Teavana stores violated lease agreements.

Simon Property Group contended that the closures led to a decline in foot traffic to its malls and reduced the value of its properties. Starbucks denied the claims and responded by countersuing Simon Property Group for trying to block the closure of Teavana stores.

The two parties eventually reached a settlement outside of court, with Starbucks agreeing to pay Simon Property Group $75 million. Teavana’s Failure Due to Decreased Foot Traffic and Low-Quality Staff

The main reason for Teavana’s failure was the documented decrease in foot traffic to shopping malls.

As more customers opt for online shopping, traditional physical retail stores have seen a significant decline in customer foot traffic and sales. Teavana’s business relied heavily on mall traffic, and it was unable to adapt to the changing habits of modern consumers.

Another factor that contributed to Teavana’s downfall was the poor quality of staff in many of its stores. Some employees lacked the skills and knowledge to adequately serve customers and answer their questions about tea products.

The inconsistent quality of service and lack of product knowledge contributed to a decline in customer loyalty and a reduction in repeat business. Teavana’s Future and Distribution

Despite the closure of all Teavana stores, its brand continues to exist in different forms and markets.

Teavana products are still available in Starbucks stores, with a range of Teavana teas and tea accessories now sold as part of the Starbucks menu. This has allowed Starbucks to cater to the growing demand for specialty teas, with customers able to enjoy high-quality teas in Starbucks’ already-established stores without the need for a standalone Teavana location.

Teavana’s promotion and expansion plans in Asia have also been successful. In China, for example, Starbucks has opened Teavana tea bars in several cities, featuring a wide range of teas and tea-based beverages, as well as tea-brewing demonstrations and tea classes.

This has allowed Starbucks to leverage the growing demand for tea and tap into a lucrative market with billions of consumers. Despite the promising results in Asia, however, Teavana was ultimately unable to become the international powerhouse that many had expected it to be.

Some analysts believe that the company’s decline and failure were due to unrealistic expectations of its potential size and scope. The crowded and highly competitive tea retail industry, combined with the changing retail environment, proved to be too much for Teavana, leading to its ultimate closure.

In conclusion, Teavana’s rise and fall serve as a cautionary tale about the challenges that retailers face in today’s rapidly changing economy. Despite the high-quality teas and products it offered, Teavana ultimately failed to adapt to the changing consumer habits and market pressures, leading to its decline and eventual closure.

While its products continue to exist in Starbucks stores, the closure of Teavana stores is a reminder of the importance of remaining adaptable and responsive to today’s retail environment’s ever-changing demands. Teavana was once a successful tea retailer that struggled to adapt to the changing retail environment and ultimately failed.

Teavana’s decline and eventual closure were attributed to reduced foot traffic to shopping malls, poor product knowledge among some employees, and the crowded and competitive tea retail industry. However, Teavana’s brand continues to exist in different forms and markets, allowing Starbucks to meet the growing demand for specialty teas.

This cautionary tale underscores the importance of retailers to remain adaptable and responsive to the ever-changing demands of the retail industry. Retailers and businesses can learn from Teavana’s story and endeavor to stay ahead of market trends and evolution while prioritizing favorable customer experiences.

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